Putnam patriot., 1912-05-31
Refuses ArnoId's Petition
Will Not Give Discharge

cree in Bankruptcy, Andrew J Bowen of WuHmanuc, in the ease ol Efnes' M. Arnold, of this city, who petition. ed inc court for a discharge from bank ruplcy The decision @as handed down last Saturday. The petition is denied. .s.,,. IN THE DISTRICT g9iii 9f iH TINTED STATES FOR TILL DIa srRlGF 3F lJasEtIlaAle fetbeHaster4E aEa LIST Al ARNOLD. 4.sak4fat. fa Bankrupt A1 To fhe HoaaraHit James y. iia4'3 t''- tfict Judge:
 talren .l. Bowen, Helesee Ha Bank tppfev In charge 5f tms Hf9eeeatHs as epeeiaI Master do hereby eertft-
 That l haze given t6e notice of tas hearing On She application af the HahA+ rapt for a discharge as directed bs aA order dated fine tenth day of 9ete5ela 1911. herein as appear hF ae eeft Heale of mailing and the certificate oi puiiiz ration filed herewith and made a part hereof.
 That r. E. Siblcy, Everett E. Brown and Mary L. Warren by tAelf Attorneys z. l.. Torrey and E. 5. Harvey appeared in opposition te the discharge of said bankrupt and filed specifications Of oh 5eetions to said discharge on November %. 1911. and exceptions and answers were duly filed to sand objections by the Attorney for the bankrupt, C. L.. scaris
 That t appears from the pleadings herein, and filed herewith, that two issHas were raised as follows:
 l. Specification does not raise an issue that can be met became 1t does not specify the books and records the bankrupt failed 10 keep therefore he asks that it be dismissed.
 2. The denial of specification alteg ing tbe conveyance of twenty tracts Of land to certain creditors with intent to hinder, delay of defraud creditors.
 That under issue decision was reached when the bankrupt was asked fl his books would show the investment Of certain money.
 This was objected to by the bank rupt s Attorney because fl had not been decided that the books are Iu issue. See Evidence Schedule |. F. 1l.
 Following some of the early decisions and especially in re Peek A. |. h' ?. =, held that the said specification should Ea diamisaed on the ground that where ii is alleged that the bankrupt falieu ta keep books from which bis hhaheiai condition can be ascertained the par tieulars in which the failure consists should he set up. Some text writers including Remington appear to have taken this view. but some decisions are not in line herewith, and especially q late ease of Magen Brothers Company, reported in 27 A. E. k. 129. This case was decided by fhe |. <. Circuit Court of Appepls. 3d Circuit Practically the same language was used in atieglng the objection as that used III this ease, and fl was held sufficient. but another reason for granting the notion was lne evident ncurrectuess of the ohlecton inasnueh as many books appeared ln evidence, and one hundred or more hanks are disclosed by the schedules flied by the bankrupt ill compliance with the law.
 Counsel for creditors moved that they be allowed to amend and although oe lection was made thereto, the motion was allowed and an exception taken See Evidence Schedule C pp. 7, ls, l9 The motion Co amend was allowed on the principle that Il would have been an amplifeation of what already appears because in certain department of hls business the bankrupt did fail to keep books in a way in which his financial condition in that department could have been aseertained, and that department
 
 testimony was admitted on the ground that it is the duty of a special master te take and report the evidence, and return the same with his rulings and exceptions connected herewith as part of bis report and record In re Lipset A. b R. D. 32. In re Knaszak IS \. k, R. r 1ss.
 This practice avoids delay and cum brous and awkward proceeding et run ning to the District Court Tor Ill struetions, and then to have the ease remanded for farther evidence. Error' in the procedure of Special Master can best be detected if the whole ease can be reviewed in its entirety at ont sitting of the Court. ar An amendment may he filed as',4 stage of the proceedings, ana ip ;.lon, .ba ponkr--f-rcY tout, the eNlueh' .,'e a.s- faken may be considered an ".saiad as conditions warrant.
 | find that the bankrupt went the bad on an average of 5000 or mol each month for a period of ten year and that he failed to keep books in il department of his business where pa ticipating or cooperative notes wel used. Here 1t was where eNeessi' rates of interest and profit well divide among his customers. lf books had be, kept herein it would have disclosed tbe bankrupt aud all others his 6nanei condition, and alsa disclosed the he where he sank his customers money, b unfortunately like the slukjug of q Titanic the hole even is not left
 show a loss \ NIT. Baker aud othe were allowed to bay stocks and ke the profit sharing accounts and [ bankrupt had way of satisfying e toners when a pool was closed. < Evidence, Schedule 6, pp. 5, 6. Tn, profit sharing accounts always pa 9Ge (see Evidence Schedule C. D. l0l. a in some cases lSec (see Evidence, Sch,
 nle A, pp. !, S,l These excessive su
 called profits were allowed when he u sinking beneath the waves of bal ruptcy.
 Creditors have right to know fl
 paid out their money when he clai he was only dividing profits If leak was at this point his books wo have revealed it to himself as well to creditors.
 On the principle that every one presumed to intend the natural eor quenees of his own acts, l hold that intended to conceal his financial t ditions by this failure to properly k, books.