George II. Allen, appellee, on Jаnuary 23, 1926, filed bis voluntary petition in bankruptcy in the District Court of the Southern District of Iowa. The order of adjudication was entered on January 26, 1926. In due time a petition for discharge was filed by the bankrupt. Appellant, a creditor, filed specification of objection to the discharge. The court directed that the petition of thе bankrupt for discharge with the specification in objection thereto be referred to a special master. The master recommended that the objections be overruled, and that tho discharge of the bankrupt be granted. Exceptions were filed by appellant to the master’s report, and thereafter the сourt set the cause for hearing and permitted appellant to again introduce its testimony in support of tho objections to the discharge of the bankrupt. At the conclusion of the hearing the' court overruled the objections and granted the bankrupt his discharge. This appeal is from that order.
Appellee has filеd a motion to dismiss the appeal on tho ground, first, that the transcript of the record was not filed within the time fixed by the rules of this court; second, that the citation in this ease was not issued sixty days before tho second term of this court after tho appeal was taken.
The order of the District Court granting the discharge was entered on October 13, 1928. The petition for appeal and assignment of errors wore filed on October 20,1928; the appeal was allowed on October 22, 1928; the appeal bond was approved on November 28, 1928; the citation was signed and issued September 27, 1929; the transcript of the record was filed in this court on October 11, 1929. The rules of this сourt provide that it shall be the duty of the appellant to docket the case and to file the record thereof on or before the return day. Paragraph 5 of Rule 14 provides that “all appeals and citations must be made returnable not exceeding sixty days from the date of the signing of the citation.” The return day of аn appeal is thus fixed as sixty days from the time that the citation was signed. In this case the citation was signed, as above stated, on September 27, 1929. . The transcript of the record was timely filed, fourteen days thereafter. There is no provision in the rules of this court which requires the citation to be signed and issued sixty days before the secоnd term of this court after the appeal was taken. There seems to be no merit in the motion to dismiss the appeal.
Appellant urged that tbe discharge should bo denied because, first, the bankrupt obtained an extension of credit upon a materially false statement made by Mm in writing; second, the bankrupt transferred and concealed Ms property with intent to hinder, *210 delay, and defraud Ms creditors; third, the bankrupt with intent to conceal his financial condition failed to keep hooks of account from which such condition could he' ascertained. This last objection has been abandoned inasmuch as this point was not pressed either in apрellant’s brief or oral argument.
The transactions with which we are here concerned took place prior to the amendment to the Bankruptcy Act of May 27, 1926, 11 USCA § 32. The application for the discharge and the objections thereto were filed prior to the amendment, but the court below considered the easе and entered its order subsequent thereto.
The amended act, 11 USCA 1 note, provides: “The provisions of this amendatory Act shall govern proceedings, so far as practicable and applicable, in bankruptcy cases pending when it takes effect; but as to proceedings in eases pending when tMs Act takes effeсt, to which the provisions of this amendatory Act are not applicable, such proceedings shall be disposed of conformably to the provisions of said Act approved July 1, 1898, and the Acts amendatory thereof and supplementary thereto.”
The statute contemplates that the amendment should, where possiblе, be applicable to actions pending at the time of its passage. The uniform rule of decisions has been that petitions for discharge should be considered in the light of the law existing at the time the court enters its order. Parrish v. City National Bank of Kearney (C. C. A. 8)
The first objection to the discharge is the alleged act of obtaining an extension of credit on the faith of а false statement in writing made on July 28, 1924. The bankrupt’s note at appellant’s bank for the sum of $6,000’ fell due at that time. In connectioh with the renewal of this loan the bankrupt filed with the bank a financial statement, and, thereafter, the note was renewed for a period of one year, and the bank was also given as security a third deed of trust on some farm property.
The issue presented here has to do with that portion of the financial statement in which the bankrupt set out his liabilities. The items were as follows:
Accounts owed by me...................
Notes owed by me without security.. $10,045
Notes owed by me with security ’ (other than real estate or chattel mortgages)............... 15,000
Mortgages owed by me on farm property.................... 57,500
Total Liability............... $82,545
The schedules filed in the bankruptсy proceeding on January 23, 1926, showed that the bankrupt owed to creditors holding securities $61,530.78, to unsecured creditors covering accounts and notes $9,778.07, and for taxes $730, or a total indebtedness of $72,-038.85. The evidence further showed that substantially all of the outstanding indebtedness at the time of bankruptcy was owing at the time the financial stаtement was made and delivered to the bank. It will be seen, therefore, that the financial statement disclosed the bankrupt’s indebtedness to be greater by $10,506.15 than the amount of his obligations, as set forth in the schedules filed eighteen months later.
As we understand appellant’s position, it is not contended that the bankrupt fraudulently understated- thе total of Ms liabilities in this financial statement. It is not contended that his debts were greater than $82,545, the amount of the obligations as shown by the statement. Appellant’s contention is that the bankrupt’s statement that he owed $25,-045, exclusive of debts secured by real estate or chattel mortgages, was materially false because he owed debts of tMs nature in a greater sum. This position is thus set forth in appellant’s brief.
“At that time, (July 28, 1924) the bankrupt in his financial statement represented that in the items designated accounts owed, notes unsecured, notes not secured by land or chattel mortgages, he owed an aggregate total of $25,045.00. In truth and in fact, as set up in the statement оf facts, at that time the bankrupt owed, exclusive of the $6000 due the appellant in those three classes of in-, debtedness and exclusive of real estate mortgage indebtedness, the aggregate sum of $27,-747.12, and making a total indebtedness in those three classes of $33,747.12.”
*211 To support this contention the appellant states that аll of the unsecured items shown in the schedules in bankruptcy were outstanding in July, 1924, that is, $9,778.07, and that to this sum should have been added certain items aggregating $24,102, making the amount of unsecured debts something over $33,000. The debts claimed to have been omitted from this group are the following: People’s Savings Bank, $10,000; Grimes Saving's Bank, $1,045; Seibert estate, $1,-307; Valley Savings Bank, $5,750; Farmеrs’ Savings Bank, $0,000.
The record has been carefully examined to ascertain the situation with reference to these five items on July 28, 1924, at the time the financial statement was executed. The obligation due to the People’s Savings Bank was secured by what is referred to as a “collateral deed” to certain real estatе. A prior incumbrance on this real estate was foreclosed, and thereafter the bank loan was unsecured. An effort has been made to determine from the record when this foreclosure took place. The bankrupt testified that this “mortgage was foreclosed a year ago last February.” The record is not clear as to whether this testimony was given in the hearing before the master in September, 1926, or when the ease was presented to the court in October, 1928. But if the witness so testified before the master, and that assumption is more favorable to the appellant, then the foreclosure took place in February, L925. So that at the timе the financial statement was made the bank hold a deed to this real estate as security for its loan. If it be assumed that this item was by the bankrupt omitted from the list of his obligations unsecured, or secured by “other than real estate or chattel mortgages,” it does not follow that the inference of fraud must' be drawn. It would only mean that the bankrupt regarded a deed to real estate given as security for a loan as a mortgag-e. That was not only the practical effect of the transaction, but is also the law of the situation. The bankrupt was not called upon to draw nice legal distinctions in the grouping of his debts, so long as he acted truthfully and honestly, and therе is absent even an intimation that the debt due the People’s Savings Bank was entirely omitted.
The note off $1,045 due the Grimes Savings Bank was indorsed by a third person. The note of $1,307, due the Seibert estate is shown as an asset of that estate by an inventory filed February 25, 1924. Whether this note was outstanding in July, 1924, and whether it was an obligation of the bankrupt, are mattеrs the record leaves in doubt. The attorney for the estate testified that the bankrupt’s wife’s interest in the estate was sufficient to meet her obligations to the same, thereby leaving an inference that this was not a debt of the bankrupt, but an obligation of his wife. However, the presumption will be indulged that this sum was owing by the bankrupt. The obligation of $5,750 due the Valley National Bank also bore the indorsement of third parties. The obligation of $6,-000 to appellant was secured, so it is claimed, by the assignment of the life insurance policy. These four obligations, aggregating $14,-102, should have been reflected in the list of debts without real estate security. Adding this sum to the amount of similar obligations taken from the schedules in bankruptcy the result will be a total of $23,880.07. The bankrupt showed a greater amount of debts of this class in the financial statement, and, consequently, there is no reason to believe that any of these items were omitted from that statement.
It may be that some one, or more, of these items was not properly classified in that statement, but it is not regarded as particularly significant whether a debt was therein designated as “without security,” “with security other than real estate or chattel mortgages,” or secured by “mortgages on farm property.” This is especially true, where, as here, there is no claim that the demands listed did not include all outstanding obligations. Fraud is hardly to be imputed to the fact that the bankrupt placed some of these items in the wrong class. Error and inaccuracy in the designation of the character and status of the obligations fails to support the charge of making “a materially false statement” for the purpose of inducing the extension of credit. The statute has reference to a statement, materially false in fact, deliberately made for the purpose of deceiving. Aller-Wilmes Jewelry Co. v. Osborn (C. C. A. 8)
Neither the special master nor the court below made any finding as to whethеr the financial statement was false, but concurred in holding that credit was not extended in reliance thereon. In view of the conclusion reached it is unnecessary to consider this matter.
Another objection urged to the discharge of the bankrupt is that he transferred *212 and concealed certain of his property with , the intеntion of hindering, delaying, or defrauding his creditors. The amended statute requires such an act in order to be a valid objéetion, to have been committed within twelve months 'immediately preceding the filing of the petition, while the prior act limited the period to four months. The first of the two aets relied on here was the sale by the bankrupt оf certain personal property.' The seeond- aet relied on was the borrowing of the entire loan value of a life insurance policy while the policy was pledged to appellant.
The appellee was a farmer, and on Novémber 13, 1924, fourteen months prior to bankruptcy, he sold certain persоnal property consisting of farm implements, stock, and grain, to his brother for about $2,609. Substantially all of this sum was applied on his debts. One witness testified that the value of this property was about $3,409. Inasmuch as the property was sold more than a year befo.re bankruptcy, it would be necessary to show a continuing concealment into the period of twelve months prior to the time of the filing of the petition. In re James (C. C. A.)
It was also contended that the bankrupt barred his right to a discharge by a transaction with reference to a life insurance policy, This policy was issued by the Register Life Insurance Company for the sum of $10,000, and was issued on the life of the bankrupt, The policy was, prior to January, 1924, deIiverеd to and orally assigned to- appellant bank as collateral security for the bankrupt’s indebtedness. An officer of the bank handled this transaction, and it seems that the direetors of the bank knew nothing about the policy being in the institution. The bankrupt being pressed to meet a demand at the bank, asked for the policy that he might surrender the same or obtain a loan thereon. The officer to whom the policy was delivered had sev©red his connection with the bank and the policy could not be located. Thereupon the bankrupt, at the suggestion of appellant, made an affidavit that the policy was lost, and aP°a the filing of this instrument the insurunce company delivered a duplicate policy on which the bankrupt borrowed the full amount °f the loan value. The money thus realized, about $115, was delivered to appellant bank in payment of an overdraft and interest, This transaction occurred in 1924, more than eighteen months prior to bankruptcy. It involves no element of withholding аssets duriag th® one-year period, in fact, it is devoid °i an7 suggestion of concealment of property at any time. The transaction, no matter what interpretation is put upon it, can in no event amount to a valid statutory objection to the discharge of the bankrupt. This 'was the interpretation placed upon this matter by both the master and the court, and no other finding would be possible under the evidence,
The language of'the statute indicates and the courts'have uniformly held that the bankrupt is entitled to have the act liberally construed in his favor. He is entitled to a discharge, unless the evidence clearly shows that he has committed one or morе of the acts named in the statute as precluding the right to be discharged. The burden of proof is upon the objecting creditor to establish the faet that the bankrupt has been guilty of cfc. conduct as should foreclose to him the relief sought. Bank of Monroe v. Gleeson (C. C. A. 8)
' The appellee’s motion to dismiss the appeal is overruled, and the decree below is affirmed.