197 F. 109 | S.D.N.Y. | 1912
The bankrupt proposes a composition of 40 per cent. He owes about $75,000 to 80 creditors, 58 of whom, having claims of about $56,000, have consented in writing to the composition. Of these, one-half in number, representing claims of nearly $40,000, have waived cash payments and indorsed notes (as proposed), and in lieu thereof have agreed to take the, bankrupt’s un
From the record it is obvious that the composition is for the best interest of the creditors and should be confirmed unless barred because the bankrupt has committed acts within the inhibitions of the Bankruptcy Law (Act July 1, 1898, c. 541, 30 Stat. 544 [U. S. Comp. St. 1901, p. 3418]).
Two objections only need be considered: (1) That the bankrupt, with intent to conceal his financial condition, failed to keep books of account or records from which such condition might be ascertained; and (2) that he obtained property on credit on a materially false statement in writing made by him to the objecting creditor for the purpose of obtaining credit from that creditor.
This loan was entered in the bankrupt’s books and appears on the trial balance of August 1, 1911. The bankrupt kept, at his place of business, a memorandum of the collaterál, the amount and due dates of the payments on account, and that record, it is apparent, was in no way concealed. I suppose the Bankruptcy Act is not an academic statute, and that the court should always seek to ascertain whether or .not the bankrupt really meant to conceal his true financial condition by failing to keep true books of account or records. Without detailing all the facts and circumstances (with which the contesting parties are fully familiar), I conclude that not only has the objecting creditor failed to show the intent to conceal, but that it affirmatively appears that there was no intent to conceal financial condition by failure to keep books of account or records from which such condition might be ascertained.
The bankrupt did not, then nor thereafter, need the favor of the objecting creditor. He was getting much more lenient consideration in other quarters, and when the subsequent sales were made, the able and farseeing representative of the objecting creditor was not relying on the written statement of the bankrupt, but was willing to take a chance on his own judgment, and, besides, he wanted back some of the bankrupt’s business which the latter had been giving to competitors.
I am not keen to discover technical grounds upon which a bankrupt may escape the consequences of wrongful acts; but in this case the previous course of the objecting creditor toward the bankrupt, the form of the typewritten summary, the addendum in the handwriting of the objecting creditor’s representative, the small amount of the goods delivered to Cohen and charged against the bankrupt, the information as to the bankrupt’s condition from other and reliable quarters, and, in brief, the whole situation, negative the claim that the objecting creditor relied on the paper which the bankrupt signed at the instance of the representative of the objecting creditor.
In view of the reasons already stated, it is unnecessary to indulge in an extended analysis of the figures in the statement complained of, and especially as I am not satisfied that the bankrupt submitted this statement to obtain a general line of credit.
Objections disallowed, and composition confirmed. Submit order on one day’s notice.