Court Opinion

ID: 8828820
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:56:25.236299+00
Date Added: 2024-06-11T17:04:51.673165
License: Public Domain

WATKINS, District Judge.
The above-named bankrupts having filed their petition for a discharge in bankruptcy, certain creditors, through their counsel, appeared and filed objections to such discharge. The numerous specifications of objections need not be recapitulated in this opinion. The issues raised by the said petition for discharge and specifications of objections thereto were by me referred to I. H. Hunt, Esq., of Newberry, S. C., as special commissioner, to take the testimony on such issues as are raised therein, and report the same to this court with all convenient speed, together with his conclusions of fact and his recommendations thereon. The said special commissioner, after hearing testimony and arguments, of counsel, has filed an unusually elaborate, thorough, and able report, wherein he has considered and discussed at length both the law of the case and the facts in issue.
I have carefully gone over the report and the testimony, which, including the exhibits submitted, was quite voluminous. The thorough and comprehensive briefs submitted by counsel for objecting creditors were entitled to and have received extended and careful consideration by the court, but I am unable to find in any of the objections assigned sufficient reason to deny the discharge. Both the findings of fact and conclusions of law of the special commissioner are approved and cpnfirmed. The report of the special commissioner is so thorough and convincing that no useful purpose could be served by an additional discussion in this opinion of the issues involved, further than to add to the authorities cited the case of Sherwood Shoe Co. et al. v. Wix, 240 Fed. 692, 153 C. C. A. 490. That case arose in this district.
The referee filed an elaborate opinion, recommending the denial of the discharge, because of the intention of the bankrupt to conceal his financial condition by failure to keep books of account or records from which such condition might be ascertained. The testimony revealed a much stronger case against the bankrupt upon this ground than in the instant case, but the report of the referee was disapproved by Judge Johnson, and the discharge allowed. In re Wix (D. C.) 236 Fed. 262. Affirming this opinion, the Circuit Court of Appeals said:
“Analyzing this statutory provision, it is clear that its sole purpose is to condemn a design on the part of a bankrupt to conceal his financial condition by either (a) destroying his books of accounts or records, or (b) concealing them, or (c) failing to keep them. It cannot be construed to require any particular system of bookkeeping, nor can it he construed to require the Keeping of books at all. (Italics ours.) The books kept may be so faulty and deficient as to in fact deceive creditors as to the bankrupt’s financial condition, yet. if they have been so kept with no purpose to conceal such condition, the inhibition of this statute does not apply. Congress emphasized this construction when by the amendments of 1903 it struck out the word ‘fraudulent’ before the word ‘intent,’ ‘true’ before the words ‘financial condition,’ *148and the words ‘and in contemplation of bankruptcy’ following the words ‘financial condition.’ ”
As indicated above, the report of the special commissioner so conclusively answers and disposes of the specifications of objections as to render it unnecessary and even unwise further to extend the record by an elaborate opinion. It should be added that at the hearing before the special commissioner bankrupts’ attorneys moved to dismiss the specifications of objections on the ground that the specifications were not served upon the bankrupts, and because the specifications were improperly verified. These objections, however, were not specially urged before me, and I' deem it Unnecessary to pass upon them, since the case will be disposed of upon its merits in favor of the bankrupts.
It is conclusive to my mind that the discharge should be granted, and an order will be entered accordingly.