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office to ascertain whether that took place at any time in the morning. The morning passed without any such petition being filed. The offices were closed, and the time came when it was apparent that nothing more could be done that day, if any one contemplated proceedings, and word was sent to Mr. Joseph to that effect. The significance of this depends upon the principle that the filing of a petition in bankruptcy acts as an injunction or a caveat, as the law terms it. It is notice to the world that bankruptcy proceedings are pending, and anybody who takes the property of the bankrupt after such a petition is filed takes it subject to whatever may take place in the bankruptcy proceedings. Of course, the filing of a petition does not make a man bankrupt. He may have a defense, and if he puts in a defense, and it is decided he is not a bankrupt, then any proceedings that a person takes in reference to his property are not affected by the bankruptcy; but, on the other hand, if the proceeding results in bankruptcy, then anybody who has taken the property or interfered with it after the filing took place holds it subject to the adjudication in bankruptcy, and to the effect of the proceedings in bankruptcy, which would be an explanation of why Mr. Joseph wanted to know whether any bankruptcy petition had been filed here on that Saturday morning. After ascertaining that there had been none filed, and that the office was closed for the day, he stayed at this store, according to his own statement here, from about 11 until after 2. I think some of the evidence is that he stayed there longer that day, and during that day what took place is substantially this, as shown by the evidence on this trial: The silks, satins, and romaines in the place, substantially-some of them, at all events; I don't know but all of them-were packed in trunks by Feinman, and taken away and taken to Baltimore that night. They were intended, as I understand it, to be applied on account of Mrs. Korn's indebtedness. There remained some 50 or 60 pieces of piece goods. Some of these were complete, and a number of them had had a portion cut from them, and used in manufacturing garments, but a large portion of which remained on the piece; woolen goods, I think, principally. The question arose what was to be done with those goods. Joseph had stated, according to Mr. Gilroy, that it was necessary to put some of this property away, in order that he (Joseph) should be able to accomplish a settlement with the creditors; the idea being that after the failure took place-after it became known that there was a failure-if he had some property with which to make propositions of settlement, he could accomplish his object. The question was what was to be done with these piece goods, and Joseph said "Who are your spongers," and Gilroy said "Altschul," or the Perfect Sponging Works, the name under which he did business, and Joseph advised that these goods be sent there. They were thereupon packed, and a truckman called in, and they were sent there, and it also appears that during this day various people in the place took away smaller quantities. Mr. Von Praag says he took away a silk dress. Mr. Hardin took away a suit of clothes, and there were various other people there who took out rolls under their arms, of comparatively small amounts. On this same day it seems that in the
morning Mr. Gilroy had sold a lot of made up garments, amounting to about $1,200, to a man named Taylor, and on Monday morning they were taken away, and the result was that on Monday morning, the petition in bankruptcy was filed and the receiver in bankruptcy was appointed, and when the receiver in bankruptcy reached the store there was substantially nothing left of the assets of that store, except, as I understand, goods in process of manufacture, cloth which had been cut up, and was in process of being made into garments, which I think some of the witnesses said were worth about $4,000. All the piece goods, all the unmanufactured goods, and apparently all the manufactured goods were substantially gone. This took place on Monday, the 21st, and I think there is some evidence in the case that there was some telephonic communication that day between Joseph and Altschul, and that Altschul that day-it is for you to say whether it occurred that day--announced that he had a bill against Gilroy & Bloomfield of $157 for previous work done as a sponger-a legitimate bill-and he informed them that that must be paid before those goods would be allowed to go out, and at all events it occurred that $150 in cash was paid him before the goods were given out. That was the condition of things on Monday. That was what the receiver, when he went down there, found. Those goods were delivered by Altschul upon order subsequently, and the story of the plaintiff's witnesses in respect to that is substantially this: Cohen, who was a clerk in the firm of Gilroy & Bloomfield-Cohen testified that Joseph sent for him on Wednesday, and asked him to come down to the office, and when he got there Joseph said he wanted to see Gilroy, and the result was that Cohen went to Gilroy in East Orange, and got him to come over to New York. They went to the Cosmopolitan Hotel, and sent for Joseph, and they had an interview there with Joseph, and Joseph said he wanted an order for these goods that had been sent to Altschul, to be used for the purpose of accomplishing this proposed settlement. Thereupon Gilroy wrote on a card an order for them, and gave it to Joseph. This order is dated March 19, 1904, and reads as follows:
"The Perfect Sponging Co.-Gentlemen: Please deliver to bearer the goods sent you for examination. "Gilroy & Bloomfield, "Per Louis K. Gilroy."
It is written on the back of one of their business cards. Gilroy says that Joseph suggested that he date it back on the 19th, which was the date the goods were sent to the Perfect Sponging Company's place, and Cohen says that he saw the card written and delivered, but he didn't hear the conversation between them, and is not able to identify this as the card, except that he saw a card delivered on that day. Now Joseph denies that he ever received that card, and he denies that he sent Cohen over to Orange, or asked Cohen to get Gilroy to come over here. He says Cohen came to see him, and asked him if he couldn't bring about the payment of some commissions that were due Cohen from the firm of Gilroy & Bloomfield, and he said he didn't see how he could. Thereupon he testifies Cohen went away, and went over to Orange in his own interest, and got Gilroy to come
over to the Cosmopolitan Hotel, and sent for Joseph, to endeavor to accomplish his purpose of getting these commissions settled. Joseph says there was no talk at that interview about giving any order of this kind, and that this order was not given to him there, and he never did receive this order, or take any action under this order. He also calls as a witness Altschul, who says that this order was given to him at his place of business on the 21st of March, the date on which he produces a receipt for the goods. He produces a receipt for goods received on the 21st, that is Monday, March 21, 1904, having entries of nine or ten different lots of goods, which he apparently delivered to different teamsters, and for which he took receipts, and which has at the end of the receipt "Gilroy & Bloomfield, Two cases of cloth, Richard Smith." Mr. Von Praag is also called as a witness, and testifies that he purchased from Feinman certain goods which had been put in two cases, evidence from which you would be justified in drawing an inference that these goods were those sent to Altschul, but which the other side claim were the other goods which were taken off in a trunk to Baltimore. Von Praag produces certain checks given to Feinman, which he says were in payment of these goods, and which checks are dated before the 23d-the 22d, I think. That is to say, gentlemen, if you believe the evidence of Joseph, of Altschul, and of Von Praag, this order was given on the date it bears date, the Saturday, on the same day the goods were sent to Altschul. It was given to some truckman, a man who signed his name here as Richard Smith, so that he could go and get them on Monday the 21st, and he did go and get them Monday the 21st, and they were thereupon sold to Von Praag in such season that he would draw his check in payment on Tuesday the 22d, and all this had taken place before Wednesday the 23d, which is the date on which Gilroy and Cohen say this order was first given. Altschul's own testimony is that the goods were delivered on this order, and he produces this order.
Gentlemen, it is a pretty material point in this case which of these stories is true. If that order was not given until Wednesday, everybody knew that the bankruptcy proceedings had taken place, and that a receiver had been appointed at that time, and if Mr. Joseph and Mr. Gilroy on Wednesday gave this order, and under it took possession of those goods, whether they were intending to give them to Mrs. Korn ultimately, or to hold them for the purpose of forcing a settlement with their creditors, or concealing them for their own advantage, in any way they were doing an illegal act. A receiver had been appointed and had qualified, and the property of this bankrupt estate had then passed to him. The title to it had then passed to him, and no person having knowledge of the condition of affairs had any right to take any property of that firm at that time, or do anything else with it except to hand it over to the receiver. So, as I say, it becomes important for you to determine whether in fact this order was given on the 19th, and was received and the property obtained under it before the bankruptcy occurred, or the parties had knowledge of the bankruptcy, or whether it was issued on Wednesday the 23d.
Upon that point you will notice, in the first place, that, if Gilroy's
story is true, the plaintiff has produced in this case all the corroborative evidence that he can; that is, it is for you to say whether they have not done so. Gilroy says he made this card out at the Cosmopolitan Hotel that Wednesday, and that the only persons present were Joseph and Cohen, and Cohen corroborates Gilroy's story in his testimony, and says he gave Joseph the card, and he went away with it. Joseph says it is not so; that he didn't give it to him at the time or at any time. Now, gentlemen, it is for you to say, under those circumstances, whether, if Joseph's evidence is true, he has produced all the evidence to corroborate his statement that he might produce. If a party to a cause has in his control and can produce in support of his position evidence which in the opinion of the jury he could produce if his story was true, and he omits to do so, the jury is justified in drawing the inference from such omission either that there is no such evidence that can be produced, or, if it was produced, that it would not be favorable to that side. Somebody had that card between the time when Gilroy surrendered it and Altschul received it. Richard Smith, Altschul says, was the teamster who brought this card and delivered it to Altschul, and to whom this property was surrendered. Now, gentlemen, it is a fair question for you to ask in this case why Richard Smith is not called, if he exists. If he exists and has gone away somewhere, where has he gone, or what search has been made to find him? Is it probable that with Von Praag and Altschul friendly to Joseph no such person can be found? This matter was investigated only a few days after the thing occurred. The receiver had the parties up under examination on Thursday of the same week in which he was appointed-three days after he was appointed-and it has been the subject of repeated investigation since. Mr. Joseph is an experienced attorney. He knows the importance of this case. He said on the stand that he said to Feinman that this is a case not only relating to a claim of money against him, but affecting his professional reputation. He is represented here by counsel of experience, and it is for you to say whether he did not know before this trial the importance of supporting his evidence that he never received that paper on Wednesday and if you find that he is not corroborated in the respects in which in your opinion he might have been corroborated if his statement is true, you may give such weight to the omission to produce such evidence. as in your opinion such omission ought to receive. You should indeed not give too much weight to the consideration of evidence not being produced. A case should be decided mainly on the actual evidence, but you have a right in passing upon the truth of such a case to take into consideration not only the actual evidence that is in the case, but the omission to produce evidence, if in your opinion it might have been produced, to corroborate the party whose evidence is under consideration.
In addition to this evidence about the goods there is evidence about the cash. Gilroy says he gave Joseph $300 on Saturday, the 19th. He says that Joseph said he needed some cash and some goods in order to accomplish the settlement, and that this $300 was given to Joseph for that purpose. Joseph says it was paid to him by Korn, or paid to
him by Gilroy for Korn, or something of that sort, in payment of his. professional services up to that time. Gentlemen, if that is true-if that was paid to him by Korn or for account of the Korns-in payment of his professional services up to that time, the plaintiff in this action cannot recover for that amount. Joseph says that he was never paid anything further by anybody in this case except that he was reimbursed in the sum of $12 by Mr. Gilroy for a little payment he had made to a bookkeeper, I think it was, some employé, and that he was paid $100 later by Altschul, which took the form of a loan, as I understand, and that there were no other cash payments made him at all. Gilroy says he subsequently paid him $250 or $300 to be added to this sum he had previously paid him to make up the fund for settlement with the creditors, and that still later, after he got in the payment from Taylor for about $1,200 worth of goods, he turned over $650 more to Joseph. You will recall the dates of these last two payments which Gilroy says took place certainly after these bankruptcy proceedings occurred and after the receiver was appointed. If his testimony in that respect was correct, those were payments which Gilroy had no right to make, and which Joseph had no right to accept, because both of them knew that that money belonged to the receiver, and they had no business to do anything else with it but turn it over to the receiver. It is for you to say, gentlemen, if you should find in this case against the defendant, in the first place, what was the value of those goods, which are alleged in the complaint to have been worth $4,500, and how much money in fact was advanced by Gilroy, if any, and to base your verdict, if you find one for the plaintiff, upon the actual value of the goods at the time they were turned over, and the actual amount of money paid to Joseph, deducting from it the first $300, if you find that that $300 was paid to him by Korn for a fee, and was not transferred to him by Gilroy as a fund with which to settle with creditors.
Now there is alleged in the answer here as a defense that there was an investigation made. I think there is an order put in evidence. There has not been much said about it by counsel in summing up, but a proceeding was taken in this court to compel the Korns and Gilroy and Feinman and Joseph, I think, to pay back to the receiver or to the trustee, one or the other, this property, or portions of it, and it resulted in an order, which as they say, exonerated Mr. Joseph; that is, an order was entered which refused to direct that Mr. Joseph pay over anything, and that was subsequently modified, and the matter sent back again to the referee. You see this has been a matter of a good deal of examination.
I charge you, gentlemen, as to the effect of that order, that it is not a bar to this suit. Ordinarily, of course, if a man is sued in a lawsuit, and there is a judgment recovered in that case, he cannot sue again for the same thing. The first judgment determines the question. But this was a summary proceeding, based upon the theory that there was clear and conclusive proof that the parties proceeded against in this case had property in their possession. In those cases, where the proof is perfectly clear and substantially decisive, the courts of bankruptcy exercise a summary jurisdiction in such cases, and order that property