Case Name: In re HOPE
Court: United States District Court for the Western District of Michigan
Jurisdiction: United States
Decision Date: 1926-06-02
Citations: 18 F.2d 958
Docket Number: 
Parties: In re HOPE.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 18
Pages: 958–959

Head Matter:
In re HOPE.
District Court) W. D. Michigan, S. D.
June 2, 1926.
Eldred & Gemuend, of Ionia, Mich., for bankrupt.

Opinion:
RAYMOND, District Judge.
Specifications of grounds of objections to bankrupt's discharge have been filed in this matter. The specification relied upon is that bankrupt knowingly and fraudulently made a false oath in the bankruptcy proceedings, in that on the 1st day of October, 1925, he made the usual oath to schedules annexed to the petition in bankruptcy filed in this court, and that in the schedules he omitted to list among his assets an undivided one-half interest in 31 head of cattle, of the value of $300.
Testimony has been taken, from whieh it appears that in the spring of 1924 bankrupt became a tenant under a five-year written , lease of a farm owned by Charles Spaulding. Shortly after the lease was made, cattle were purchased and 10 heifers were > raised. In 1925 a contagious disease appeared among the cattle, which rendered many of them worthless. In the late summer and early fall of 1925, controversies arose between the landlord and tenant, whieh resulted in negotiations between the bankrupt and Mr. Spaulding to terminate the lease. Mr. Spaulding was an indorser upon notes given for the purchase price of the cattle. Bankrupt was not liable upon these notes. Mr. Spaulding testified that, 'at the date of filing the petition in bankruptcy, bankrupt was the owner of a half interest in the cattle, and that the 10 heifers hereafter referred to were delivered to bankrupt in settlement for his interest therein.
Bankrupt testified that his understanding was that he was to become the owner of a half interest in the cattle when the purchase price was fully paid from the pro- ' needs of the farm. He claims that, as a result of the loss of cattle, the indebtedness on the cattle- and other personal property exceeded by $3,800 the value of personal property on the farm, and that at the time of filing the petition in bankruptcy he believed he- had no interest whatever therein. It is also the claim of bankrupt that in the latter part of October, 1925, Mr. Spaulding delivered to him the 10 heifers in consideration for his agreement to vacate the farm immediately and his consent to the termination of the lease.
It has been repeatedly held that a false oath, to constitute sufficient ground for denial of discharge, must have been knowingly and fraudulently made. In other words, there must have been present a willful intent to defraud. It is evident, from testimony in this case, that the relations' between bankrupt and his landlord at the time of filing the petition in bankruptcy were in a confused state. Controversies had arisen, and it is not difficult to understand that the bankrupt may have honestly believed, on October 1, 1925, the date on whieh the oath was administered, that he had no interest whatever in the cattle, because of the in-, debtedness still existing, and which it was claimed greatly exceeded the value of the property. If his statement is true that the heifers which were received by him several weeks later were to compensate him for the surrender of the lease, the oath taken on October 1st would bear no relation thereto. The evidence discloses that no creditor appeared at the first meeting of creditors, held October 26, 1925, and no examination of bankrupt was had. At that time the transaction in regard to the heifers had been consummated, and if creditors had then appeared and examined the bankrupt, all the facts in connection with the transaction would undoubtedly have been fully developed.
In the case of Woods v. Little (C. C. A.) 134 F. 232, the following language is used, which seems to the court to be applicable to the facts in the present case: "Without discussing in detail the particular facts and circumstances of" this case, we are of opinion the failure of the bankrupt to return in his schedules the interest complained of, is not necessarily attributable to a fraudulent purpose. Indeed the question of whether he had such an interest as passed under the bankrupt law was not easy of solution. The question of his right to discharge is a close one, but on the whole, we incline to the opin- ' ion a discharge should be granted." See, also, In re McCrea (C. C. A.) 161 F. 246, 20 L. R. A. (N. S.) 246, In re Wetmore (D. C.) 99 F. 703, and In re Hamilton (D. C.) 133 F. 823.
An order discharging bankrupt will be entered.