112 F. 135 | E.D.N.C. | 1901
The referee after hearing, on September xo, 1901, the petition for discharge, under district rule 8, ¡upon* objection to such discharge, certified the record to the judge, ■'and the cause was heard at Wilmington, October 4, 1901. The following fact's appear: Jacob H. Royal was duly adjudged a bankrupt • on his own petition, filed April 29, 1901. At the time the petition :-was'filed and adjudication made the bankrupt had to his credit in the ■'bank of Clinton $109.38, which amount was not included in the • schedules filed, or afterwards accounted for or surrendered to the trustee' in bankruptcy. The referee in his report says :
•; : “The evidence in the ease does not satisfy the referee that the failure .■to include this item was with fraudulent intent, because if it had been in- \ eluded in the schedules there would not have been sufficient property' to ^■¿iake up the personal property exemption to which the bankrupt is entitled under the constitution. The referee is of the opinion that the omission to •' schedule this $109.38 was. by inadvertence, and that, under the circumstances, is not sufficient to bar the discharge. He therefore recommends that ■ the discharge be granted.”
■ The referee states other objections to discharge were abandoned, .‘and in the argument counsel insisted, on the first and second objections—First, that the bankrupt had made a false oath, in that he failed • to.include in his schedules the $109.38 balance to his credit in bank; • ■secondly, that he has fraudulently and knowingly concealed from ■•the trustee the said amount which was omitted from his schedules of • assets, and which appears to have been to his credit in bank at the time he filed his petition in bankruptcy. There is no evidence or • suggestion that since the matter has been called to his attention the . bankrupt has paid, or offered to pay, to the trustee the amount omitted from the schedules. The objections filed are in compliance with ■ general order 32 of the supreme court. r8 Sup. Ct. xxxii.
The statute (Bankr. Act 1898, § 14b) provides that upon the hearing the discharge shall be granted, unless he (the bankrupt) has (1) committed an offense punishable by imprisonment, as herein provided, or (2) with fraudulent intent, to conceal his true financial condition, and in contemplation of bankruptcy, destroyed, concealed, or failed to keep books of account or records from which his true condition might be ascertained. Objections to discharge under the second clause in the foregoing section were filed, but not pressed on the argument, and are presumed to be abandoned.
The offenses by a bankrupt punishable under the bankruptcy act fare (1) knowingly and fraudulently concealing while a bankrupt, or faft.er his discharge, from his trustee, any of the property belonging .„to fifis. estate in bankruptcy; or (2) making a false oath or account rin, .or in relation to, any proceeding in bankruptcy (Bankr. Act, § l'dgb-, cl's. I, 2), and a contempt of court (section 41, Id.).
.The filing of á petition.in bankruptcy is, as a rule, a.deliberate act. ¿Under some circumstances, when, pressed, to the wall,—which does not seem to. have been the case in the present instance,—haste is' nec
It is not deemed necessary to enter into a dissertation on the meaning of the words “knowingly” and “fraudulently,” as used in the statute, or the distinction, not noted by the referee, between their use and with “fraudulent intent,” which does not appear in this connection in the statute. = They are adverbs, regularly derived and well understood; they are thus used in the statute. If the item of the amount in the bank was “inadvertently” omitted from the original schedules, the “inadvertence” vanishes when the subsequent proceedings are considered, and the persistent neglect of petitioner to Correct the error, if it was an error due to inattention, oversight, or excusable negligence. One charged with a misapplication of funds might with better grace claim, as an excuse or defense, inadvertence in the/rush of business, and still retain that for which he has failed to account, This court cannot concur in the very optimistic view taken by the referee, but must conclude' the sum of $109.38 was knowingly omitted from the schedules filed with the petition, and was knowingly and fraudulently concealed from the trustee after the petitioner'was adjudged a bankrupt.
The ground stated by the referee is not sufficient. The bankruptcy act contemplates that a petitioner shall schedule and surrender his entire estate,—all his property, real, personal, and mixed,—and provides specifically how the exemptions shall be set aside or allotted to the bankrupt. To permit the bankrupt to omit from his schedules cash on hand, or any other property, on his claim that he would boe ál-
: The assets scheduled are, nominally, nearly $14,000, according to petitioner’s valuation, and the personal property exemption in North Carolina is $500. This court, having no information as to what'has been realized on the assets, cannot understand why, if it (the deposit in bank) had been included in the schedules, there would not have been sufficient property to make up the personal property exemption to which the bankrupt is entitled under the constitution. If this were true, it would not justify a false oath to the petition, knowingly made, which this view seems to admit inferentially, or knowingly and fraudulently concealing from the trustee while a bankrupt property belonging to the estate.
The action of the bankrupt in this case was a palpable violation of the statute (Bankr. Act, § 29, els. 1, 2), in knowingly and fraud'ulently concealing while a bankrupt from his trustee property belonging to his estate in bankruptcy, making a false oath in relation to a proceeding in bankruptcy,—an abuse of the process of the court which amounts to a contempt punishable as a crime, and good ■ground for refusing a discharge. The attention of the grand jury should be directed to such matters.
It is therefore considered, ordered, and adjudged that the recommendation of the referee be not approved, the petition be dismissed, and the discharge refused.