The New York herald., 1868-05-06
NEW YORK CITY.
THE COURTS.
UNITED STATES DISTRICT cuuaT--M BANKRUPTCY.


The Profits of the Insurance brokerage Busi-
pess-A Bankrupt Refused HIS Discharge
and Declared by the Judge to Have Sup
pressed His Property and Sworn Falsely
Curious Revelntions-Important Decision.
IL Before Judge Blatchford
Judge Blatchford yesterday morning rendered a
most important decision in the case of Robert q.
Rathbone The specifications for trial in this In
Opposition to the discharge OF the bankrupt are the
hfth, seventh and eighth With regard to these
1udge Blatchford did not think there was any
evidence to sustain the averments Of the nth
specification, namely, that the bankrupt is entitled
TO the two lots In Sixty street. New York AS
10 the seventh specification the evidence shows that
the bankrupt is not ana never the owner OF any
one OF the life insurance policies mentioned In the
specification. The eighth specification is 'that the
business of Rathbone, Brothers Co, brokers, %C.,
IN Broadway, New York, was started ana pulIt w
sTperysion S to the present time, the net profits
whereof are now about $4,000 per year; tnat sau
bankrupt Processes to receive only about one-tenti
OF the annual profits of said business as clerk and
In lieu of salary, which amounts TO about $4,000
per annum while ms said ycnase we epIssens far ooS
8 one-fifth interest In said business with about
per year all q M which e nose
Are in the hands Of said bankrupt and shonld
enure to the benefit Of his said creditors.n The
bankrupt sets forth in his inventory Of assets no
hssets whatever except his personal clothing of the
value Of 500. The decision then goes into review
OF the business transactions OF the bankrupt ana
pne Halsey under the firm name Of Robert @. Rath-
bone which failed and on which an assignment fol-
lowed In 1851 the bankrupt became clerk to Aaron
$4,000 per year. On the 1st OF November, 1S63 took
Into the business with him as partners Henry 9.
Seward, Theodore H. Knox and William O. Greig,
the bankrupt continuing with the firm as clerk In
this firm Aaron H. Rathbone was interested In
ara threetentSs, Knox Knox twosentSs and Greig S%
two.tenths: Greig paid $4,000 to Aaron II.
the firm. The profits Of the Arm were on an average
435,000 per year. About the 1st OF October, 1865,
Knox withdrew from the firm, selling out his two
tenth interest to the wife OF the bankrupt for 4000
which she paid to Knox. Since that time she has
claimed and received twotenths Of the profits OF the
business although she has not personally rendered
any services In the business. The profits since she
came into the firm have averaged $s5Ooo per year.
At the time the bankrupt's wife went into the
firm written agreement was made between the firm
nnd the bankrupt under which the bankrupt has
profits of the business as a salary or compensaton
Tor his services. Thus he and his wife together re-
ceyed out OF the profits OF the firm to the making OF
vices OF the bankrupt three-tenths OF such profits
being share amounting to $40, 500 per year.
wife paid to Knox for the privilege OF receiving the
two-tenths share In the S35, 900 profits per annum
may have been her own individual money inherited
by her from deceased relatives is impossible not to
see through their thin disguise whereby the bank
ner In the frm receiving for his personal eXert0ns
IN the business threetenths OF the profits, being the
sum OF $10,500 per annum, the manipulation being
attempted to be efiectedby putting onetenth In the
shape Of salary to himself and two-tenths in
the the shape OF an interest owned by his wife.
The firm had no benefit from any services,
or money, or capital, or property OF the
wife. The money paid by the firm to the wife for
the two-tenths was paid to her, In fact, trustee
Tor her husband, certainly against his creditors
and there can be no difficulty of Its being reached
py the assignee IN bankruptcy for the benefit OF
those creditors. The firm paid the entire threeenths
which the bankrupt and his wife received solely for
the personal services OF the bankrupt. The firm re-
ceved no other consideration for the three but
alone earned the twotenths which went To the wife,
and 1t must be regarded gift by him to her In
fraud OF his creditors and rs property held by her In
trust for him. She has II now. She owns q house
at Fort Washington, for which she paid sll 900,
and two lots In SiXty-third street, and the per.
sonal property and furniture in the house. The
bankrupt resides with her, and they and their
children have been supported out of this income
OF $40 900 year In style OF living shown by the
evidence as to servants horses and carriages en-
tirely inconsistent with any honest and fair dealing
debts, not barred by limitation, and nearly all in
judgment, amount to over $50, 900. The eighth spe
cihcation Is substantially proved and the facts up
IN It and shown by the testimony to exist bring this
case within several OF the grounds for withholding
discharge set forth In the twenty ninth section.
He has wifully sworn falsely in the afiidavit an
nexed to his inventory In stating that he has no
assets; lie has concealed his property derived from
profits in the firm in which he is and has been really
a partner by covering them up In the hands Of his
WIFE, and he has been guilty OF fraud in not deliver
ing such property to his assignee bankruptcy
law which should admit OF o discharge in such o
case as this would not be likely to remain long the
statute book. The discharge is refused.
- Mr. John II. White for the bankrupt; Mr.. II. p.
DISCHARGES IN BANKRUPTCY.
out OF over Loo petitions fled in the Southern
District OF New York only 800 final discharges have
been granted by Judge Blatchlord.