In re James

181 F. 476 | 4th Cir. | 1910

PRITCHARD, Circuit Judge

(after stating the facts as above). It is insisted by counsel for appellant that, inasmuch as the petitioner had concealed a portion of his property more than four months next preceding the filing of the petition, he thereby became exempt from the provisions of the bankruptcy law relating to the concealment of the property of the bankrupt, notwithstanding the fact that he continued to keep the property in question concealed until within the four months’ period next preceding the filing of the petition. The purpose of the bankruptcy law is to secure fair treatment for both creditor and debtor, and ample provision is made by which an honest debtor may, upon compliance with the provisions of the law, secure a discharge from his debts, and thus be enabled to start life anew.

The question naturally arises as to whether the petitioner in this case has complied with the law, or, on the other hand, whether he has done that which the law forbids.

The referee finds the following facts as respects his conduct:

“ * * * (6) That on or about the 25th day of October, 1907, and before the bankrupt made the deed of assignment of all his property for the benefit of his creditors to one Robert James, he, without the knowledge of the said Robert James, or any other person except his son, hid in a swamp in Onslow county, on land leased by him, five caddies of tobacco, worth about 20 cents a pound, one case of gun shells, two trunks of shoes and dry goods, and a case of dry goods, with intent to hinder, delay, and defraud his creditors. That on or about the 25th of October, 1907, and before the bankrupt made the deed of assignment of all his property for the benefit of his creditors to one Robert James, he, without the knowledge of the said Robert James, or any other person except his son, hid, secreted, or concealed at one W. R. Sholer’s house one barrel of boots and shoes, valued at about $50, with intent to hinder, delay, and defraud his creditors. That on or about the 25th day of October, 1907, and before the bankrupt made the deed of assignment of all of his property for the benefit of his creditors to one Robert James, he without the knowledge of the said Robert James, or any other person except his son, hid, secreted, or concealed in the Hardy Kenan house on the Burton place two barrels of flour, one bale of homespun, one large box of notions, two cases of shoes, four boxes of gun shells, two packages of snuff, two buckets of snuff, three rolls of wrapping paper, and two sacks of coffee, all of the value of about $416.25, with intent to hinder, delay, and defraud his creditors. That on or about the 5th day of January, 1908, one H. G. Swinson discovered the whereabouts of the property concealed in Onslow county, when the bankrupt voluntarily disclosed the hiding place of all the property concealed by him, except two trunks and their contents and one lot of tobacco, which were stolen or taken from the hiding place, without the bankrupt’s knowledge or consent.”

Subsection 4 of section 14 of the bankruptcy law provides that it shall be the duty of the judge, upon the petition of the- bankrupt made in accordance with the provisions of the act, to grant a discharge, unless petitioner, “at any time subsequent to the first day of the four months immediately preceding the filing of the petition transferred, removed, destroyed, or concealed, or permitted to be transferred, removed, destroyed, or concealed any of his property with intent to hinder, delay, or defraud, his creditors.” Thus it will be seen that a debtor who conceals his property with intent to hinder, delay, or defraud his creditors during the four months’ period is not entitled to a discharge. It is the manifest purpose of this provision- to prevent dishonest and unscrupulous debtors from imposing upon the public.

The findings of fact by the referee show that within the four months’ period the property of the petitioner was concealed, and that such concealment was fraudulent and with intent to hinder and delay the creditors of the petitioner in the collection of their debts. While in the first instance the act of concealment was more than four months next preceding the filing of the petition, nevertheless it is undisputed that the concealment was continued until within the four months’ period, with the consent and acquiescence of the petitioner, and for a fraudulent purpose, thus bringing this case clearly within the purview of the statute. To hold otherwise would be to open wide the door for the commission of fraud by those who may be actuated by a desire to evade the payment of their honest debts. Suppose that, in this instance, there had been no discovery of the concealed property until the day of the filing of the petition for a discharge and it had then been discovered that the property had been concealed and that fact had been made to appear, would the judge, under such circumstances, be justified in granting a discharge ? We think not. A bankrupt, in order to be entitled to a discharge, must come into court with clean hands, and show that his conduct has been that of an honest, upright man. But, under the circumstances of this case, it cannot be reasonably insisted that a court of justice should, by its decree, proclaim to the public that one who concealed his goods for the purpose of defrauding his creditors had dealt fairly with his fel'lowman, and that such an individual is entitled to the benefits of an act intended to promote honesty and fair dealing.

We have carefully considered the briefs filed by the appellant, but are of opinion that the cases relied upon are not applicable to the case at bar. Tor the reasons hereinbefore stated; the judgment of the lower court is affirmed.