239 F. 766 | D.N.J. | 1917
The special master, to whom was referred the objections to the bankrupt’s discharge, has recommended that the discharge be denied for two reasons, viz.: (1) Because he finds that the bankrupt, with intent to conceal her financial condition, failed to keep books of account or records from which such condition might be ascertained; and (2) because she obtained property on credit upon two materially false statements in writing, made by her for that purpose. Bankruptcy Act, § 14b, els. 2 and 3. He has also found that the objection, based on the alleged concealment of assets, has not been sustained by the evidence. I have not felt called upon to consider the correctness of the latter conclusion, both because no exception has been filed to it, and because I think it clear that the bankrupt must be refused a discharge on the first ground upon which the special master’s recommendation is based.
In the early part of November, 1909, the bankrupt purchased from a concern, by which both she and her husband had been theretofore employed, the stock and good will of a dry goods store in the city of Newark, and, as part of the purchase price, gave certain promissory notes, amounting in the aggregate to $8,000, signed by her and in
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This conclusion makes it unnecessary for me to decide the interesting question whether, under the circumstances of this case, the bankrupt can be visited with the consequences of the acts of her husband in making materially false statements in writing for the purpose of obtaining, and upon which he did obtain, property for her on credit.' Unquestionably, if he were the bankrupt, he should be denied a discharge. He not only made such statements, in which he omitted altogether the indebtedness of $8,000 incurred in the purchase of the business, but it admits of no doubt that he did so intentionally, knowing that they were untrue. Gilpin v. Merchants’ National Bank, 165 Fed. 607, 91 C. C. A. 445, 20 L. R. A. (N. S.) 1023 (C. C. A. 3d Cir.). If the special master’s conclusion — that the bankrupt should also be denied a discharge because of those false statements — is based on the theory that the evidence shows that they were made with her actual knowledge and consent, I would have great difficulty in agreeing with him. While the suspicion that such was the fact is strong, there is no sufficient evidence to establish it. If, however, that was not the fact, it may be that a denial of a discharge to her simply on the ground that her husband, who was in sole and complete control of her business with her full consent, intentionally made the false Statements, knowing them to be such, cannot be easily reconciled with the decisions of the Circuit Court of Appeals of this circuit in Gilpin v. Merchants’ National Bank, supra, and the Circuit Court of Appeals of the Fourth and Fifth Circuits, respectively, in Frank v. Michigan Paper Co., 179 Fed. 776, 103 C. C. A. 268, 30 L. R. A. (N. S.) 623, Peck Co. v. Lowen
The bankrupt will be denied a discharge, because of the failure to keep proper books and records.'
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