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Home > Journals > Michigan Law Review > MLR > Volume 46 > Issue 7 (1948)

 

Abstract

Problems of jurisprudence and bankruptcy are raised by Maggio v. Zeitz, a recent decision of the United States Supreme Court. The facts were these: In April, I942, the Luma Camera Service was adjudged a bankrupt. Defendant was its principal officer. The bankrupt's books showed a large and unusual merchandise shortage for November and December, 1941. Despite defendant's denial, the referee and district judge were satisfied that defendant had extracted the property from the estate before bankruptcy. But there was no evidence that defendant retained the goods or their proceeds. Relying on a presumption of continued possession, the referee ordered defendant to return the property or the proceeds, set at $17,500. The turnover order was affirmed by the district court in December, 1943. The circuit court of appeals affirmed, and the Supreme Court denied certiorari. Defendant did not obey the order, and in a contempt action he reiterated his inability to comply and his denial of the taking. But he was committed for contempt of court in June, 1945; he would-stay in jail, said the order, until he produced the property or $17,500. The primary basis of committal was the presumption of continued possession. The circuit court of appeals again affirmed, but stated that the presumption was fictitious and that the court knew that defendant could not comply with the order. On certiorari, the Supreme Court reversed and remanded to the district court for further proceedings. Justice Jackson, for the majority, stated that while the basis of the turnover order is res judicata, present possession is in issue in the contempt proceeding, and rigid application of the presumption of continued possession is unwarranted. Justices Black and Rutledge felt that the entire proceeding was illegal, and wanted the case dismissed. Justice Frankfurter dissented.

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