Court Opinion

ID: 5443939
Source: CourtListenerOpinion
Date Created: 2022-01-08 18:07:32.643197+00
Date Added: 2024-06-11T08:30:51.550096
License: Public Domain

Paterson, J., dissenting.
I dissent. As the motion was made upon the pleadings, all the aiverments of the answer are taken as true. It is therefore admitted that proper books were kept of all the mercantile transactions of the firm; that the omissions complained of were made in good faith, without any intent to deceive or defraud any one, and that no creditor of the firm was injured or defrauded thereby; that the partners honestly supposed it was not necessary to enter in their books accounts of moneys which they had borrower on their promissory notes before commencing business, and which constituted their capital stock.
How, conceding that some notes or memoranda of this borrower money should have been entered in the books, the question is, Did the failure to make the entries, under the circumstances shown, necessarily deprive the appellant of all right to a discharge from his debts? I am unable to see any good or sufficient ground for holding that it did. The statute was intended to be beneficent in its scope and purposes. In passing it, the legislature evidently thought that the best interests of the state and of its citizens would be promoted, if one who had become insolvent while endeavoring honestly and fairly to carry on some business could surrender his property to his creditors, and then be discharged from his debts, and permitted to commence his business *404life anew. Many restrictions were thrown around the proceedings, but they were intended mainly to hinder fraudulent and dishonest debtors in their efforts to escape from the just claims of their creditors.
An examination of the section of the insolvent act deferred to will show that the keeping of books is made a condition of discharge only in case of merchants and tradesmen. It will also be seen that while many grounds for denying the discharge are specified, all but two of them are based upon the fraudulent and wrongful acts of the debtor. The exceptions are, the failure to keep proper books of account by the merchant or tradesman, and an application for discharge made within three years next after a prior discharge. Each case must depend upon its own peculiar circumstances. In In re Graves, 24 Fed. Rep. 551, the court said: “No fraud or dishonesty is charged, and it would seem not to be the policy of the courts to keep a young man under the harrow for years, when the only accusation against him is, that he failed to insert in his cash-book the items of his daily sales”; and it was held that although his cash-book was imperfect, inartistic, and inaccurate in a strictly commercial sense, it was not so improperly kept as to justify the court in withholding the discharge.
McFarland, J., concurred in the views expressed by by Mr. Justice Paterson.
Rehearing denied.