Court Opinion

ID: 6226657
Source: CourtListenerOpinion
Date Created: 2022-02-17 01:24:19.561263+00
Date Added: 2024-06-11T08:57:40.198003
License: Public Domain

Blatchford, J.
I am unable, on the evidence, to concur in the conclusion that the bankrupts are shown to have had in their possession or under their control, at the time the petition in bankruptcy was filed, any of the moneys which they drew out of the assets of their firm before such petition was filed. Therefore the prayer of the assignee’s petition, in respect to such moneys, must be denied.
From which decision an appeal was taken by the assignee to the United States circuit court. ■
Blumensteel & Ascher, for appellant. That upon the report and opinion of the register that the bankrupts each had the sum of $3,300 which they had concealed from the assignee and refused to deliver over to him, the assignee was entitled *418to the order as prayed for; that the manner in which the bankrupts sought to account for the fund in question was unreasonable and manifestly untrue ; that there was no obligation to believe the testimony of the bankrupts, where its truth was unreasonable, unless corroborated, and cited Salkey agt. Gerson (11 N. B. R., 520) and the cases therein cited.
Richd. S. Newcombe, for respondents. The order of the district court was correct and should not be interfered with. There was no evidence to support the opinion or the report of the register. The bankrupts answered all questions put to them in reference to any disposition of their property. That before the prayer of the petition could be granted it was necessary for the assignee affirmatively to prove that- the bankrupts had concealed the funds and property sought to be reached. Salkey agt. Gerson, relied upon by appellant, does not apply. The authorities leading judge' Blodgett to that decision were English cases based upon section 260 of 12 and 13 Victoria, which is much more comprehensive than our section 26 of the bankrupt law. But the decision in Salkey agt. Gerson was based upon the theory that it.appeared, to the satisfaction of the court, that the property in question was still in the control of the bankrupts, in some manner growing out of their' refusal to explain, but nothing of the sort here appeared.
Johnson, J.
This is a petition by the assignee of the bankrupts to review and reverse an order of the district court made November 25, 1876, denying the prayer of the petition of the same petitioner presented to the district court on the 8th of December, 1875. This petition asked that the bankrupts might be ordered to pay over certain money alleged to be in their hands, and might be attached and punished for contempt if they did not obey such order.
An order was made upon this petition, to which the bankrupts had filed an answer, referring it to one of the registers *419to take proofs upon the issues raised by the answer of the bankrupts in respect to the moneys alleged to be in their hands. Upon this order voluminous proofs were taken and reported to the district court.
Upon these proofs the parties were heard, and on the 10th of June, 1876, an order was made reciting that the bankrupts had received between the 1st of January, 1874, and the 16th of July, 1874, the day of their failure, from the assets of the firm, the following sums, viz.: Joseph Mooney, $7,147.05, and Isaac Mooney, #$8,421; that neither of them had accounted for such sums received by him, and requiring each of them to show, on oath, what he did with the money, and fully account for the same, and it was referred to the same register to take the proofs and report the testimony, with his opinion. A voluminous examination was reported by the register, with his opinion that each of the bankrupts had in his hands, at the time of the filing of the creditors’ petition for the adjudication of bankruptcy, the sum of $3,300, and advising their commitment as for contempt in not paying the same to the assignee. Upon the presentation of this report to the district court, the order was made which is now under review.
I have carefully examined this mass of testimony, and I do not see any ground for fixing any particular sum of money as being unaccounted for by the bankrupts. According to their testimony it was all expended before the filing of the petition against them.
The account which they have given of the way in which the money was spent was undoubtedly subject to criticism, and was not calculated fully to satisfy the judgment, but did leave suspicions behind it as to its entire truthfulness. It has, however, been passed upon by the district judge, who has not been himself able to pronounce that the bankrupts have not complied with the order of the court, by making all the disclosure which is in their power. It certainly may be true that they have told all they are able to tell; and it is *420not claimed that any further examination is likely to'yield any further results. The bankrupts have answered all the questions put to them. If their answers are true, they have obeyed the orders of the courts.
The district court has not felt it to be its judicial duty to declare them untrue and to proceed to punish the bankrupts on that basis. In reviewing a decision of the district court on a question of fact, and especially upon one of this nature, it is for the petitioner to satisfy the court that a wrong decision has been arrived at (In re How, 6 N. B. R., 10). The proposition to be made out must be, that a reasonable man would not be able to give credit to the relation given by the bankrupt, but would be satisfied of its substantial untruth. It would require a very clear case to make that out, in the face of a decision of the district judge sustaining the bankrupts’ story; or, putting it at the lowest, not discrediting their story, so as to feel it right to act judicially on the basis of its willful falsity. As the question is stated by judge Drummond, In re Salkey & Gerson (11 N. B. R., 520), did it or did it not satisfactorily appear that the bankrupts had not made a full disclosure % And to this question the district court has answered in the negative. With this decision it seems to me my duty to concur, unless I am satisfied that the district judge ought clearly to have decided the other way. The Case of Salkey & Gerson (11 N. B. R., 423 and 516) was much stronger than this now before the court. The district judge in that case held the bankrupts not to have made a full disclosure, and committed them. Eight months before their failure they had bought goods to the amount of $35,000, had not paid for them, and had remaining only $6,000 worth, at their own valuation. They gave no account whatever as to what had become of them. Tet judge Drummond, when the bankrupts were brought before him on habeas corpus, thought it proper, while holding that the power of the district court was complete, and that there was no relief to be given on habeas corpus, to send the parties back before the. register *421who had charge of the case, and order that upon their further examination he might report whether the bankrupts had made a full disclosure of what they knew. The English cases which were cited (In re Bradbury, 78 Eng. Com. Law, 14; S. C., 14 Com. B., 15; Ex parte Nolan, 6 T. R., 118; Ex parte Perrott, 2 Burron, 1122,1215, and Ex parte Lord, 16 M. and W., 462) are founded upon statutes conferring expressly upon the commissioners, if, in their opinion, the examination of the bankrupt is unsatisfactory, the power to commit him. I do not think our statute is as broad as the English statutes, and therefore the decisions founded upon them are not entirely safe guides as to the powers to be exercised under our statutes. The application to this court upon review to reverse the order of the' district court in this matter made and entered November 25,1876, is therefore denied, and the clerk will certify this order to the district court. -