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but not, it has been held, by permission of the referee alone.20 A motion for the discharge should not be granted until disposition has been made on the specifications to the objections 21
The right of the bankrupt to discharge must be decided by the judge, not by a referee; 22 but the judge may refer the hearing upon the objections to a referee, either in his official capacity or as a special United States commissioner, to take the evidence and report his findings and recommendations.28 The burden of proof is upon the objecting creditors to support their specifications.24 The evidence in the decision must be confined to the specifications of the objection ; 25 but all the allegations set forth in a specification need not be proved when there is sufficient evidence to establish a ground for refusing the discharge.26 When objections are dismissed, the bankrupt may be allowed costs against the objector ; 27 but it has been said that this will not be done when the opposition was not frivolous or vexatious.28
amendment after the original time to file specifications has expired. Re Gift, 130 Fed. 230; Re Johnson, 192 Fed. 356.
20 Re Kaiser, 99 Fed. 689. - 21 Re Randall, 159 Fed. 298. In the Eastern District of New York, it has been held to be the duty of the creditors to bring the discharge to a hearing. Re Fritz, 173 Fed. 560. See Re Lockwood, 240 Fed. 159. That a petition may be dismissed for want of prosecution, when no specifications of objections have been filed and the bankrupt takes no proceedings for a year; Re Lederer, 125 Fed. 96; Re Shrimer, 228 Fed. 794. Where, upon an appeal from an order denying a discharge, there was no opposition by the creditors, the abandonment of the opposition was held to be entitled to weight and to be considered, but not conclusive. Re Hammerstein, C. C. A., 189 Fed. 37. A local rule (S. D. N. Y.) was held to be valid which provided that “if the first meeting of creditors is not called and the examination of bankrupt at such meeting begun, carried on and completed before the petition for discharge is filed, the referee is directed to certify such facts to the court, and thereupon, upon notice to the bankrupt, an application to dismiss the petition for discharge may be made." •Re Wolliwitz, C. C. A., 192 Fed. 105; but that, when
specifications of objections have been filed, the only remedy of the creditors is to set the matter down for a hearing upon the petition and objections. Re Wolff, 132 Fed. 396, and that objections may be disregarded when the objector. does not appear upon the hearing of the application for a discharge. Re Chase, 186 Fed. 408.
22 Re Elby, 157 Fed. 935. Where the objection is that the bankrupt has made a false oath with reference to an exemption, the hearing thereupon should be postponed until his right to an exemption has been decided. Re Meikleham, 236 Fed. 401. Where the recovery of a judgment is essential to the enforcement of a creditors' claim against a surety, Re J. L. Philips & Co., 224 Fed.
to enforce the bankrupt's waiver of an exemption, Re Mitchell, 175 Fed. 877; H. S. Meinhard & Bro. v. Pincus, C. C. A., 200 Fed. 736; the discharge may be postponed until such judgment has been obtained, provided of course that the creditor acts with due diligence. But it has been held that a sub-contractor who has intervened in the bankruptcy proceedings against a contractor is not entitled to a stay of the discharge until he can prosecute his claim to judgment,
as to enable him to enforce a mechanic's lien under the State statute., Re Goodrich, 192 Fed. 746.
23 General Order XII, Re Kaiser, 99 Fed. 689; Re Meyers, 100 Fed. 775; Re Gillardon, 187 Fed. 289. In the Western District of Kentucky, it seems to be the custom to refer the objections and specifications to the referee, no matter how frivolous they may be. Re Daugherty, 189 Fed. 239. But this extraordinary practice is not the rule in most districts. The referee has no jurisdiction to hear such an application unless there has been a special reference to him. Re Taylor, 188 Fed. 479; Re Randall, 159 Fed. 298; Re C. H. Kendrick & Co., 226 Fed. 980. The previous taking of testimony by the referee upon the subject is an irregularity; Re Goodhile, 130 Fed. 782, but such testimony may be allowed to stand as if subsequently taken, provided that both parties were then represented. Ibid.
Where an application for a bankrupt’s discharge was referred to the referee, as special master, to hear the facts and report his conclusions, and specifications of objection filed by creditors were not sufficiently specific, it was held to be the master's duty merely to report back to the court that nothing had been filed with him in the way of objections requiring the taking of testimony. Re Hendrick, 138 Fed. 473. The bankrupt's attendance before the referee on hearing of objections to his application for discharge demanded by creditors was held to be indispensable. Re Shanker, 138; Re Curle, 217 Fed. 688; even when he had removed from the district. It has been held that
the referee has power to rule upon the sufficiency of the specifications, and that he should exclude evidence offered in support of specifications that are clearly defective. Re Kai. ser, 99 Fed. 689. Contra,
Re Knasxzak, 151 Fed. 503. See supra, $ 639. Objections to the admission of evidence which were not taken before the commissioner or referee may be disregarded. ' Re Magen, 218 Fed. 692. No exceptions to the report are required, International Harvester Co. v. Carlson, 217 Fed. 736; Re Hughes, C. C. A., 262 Fed. 500. See Re Pierce, 210 Fed. 389. The referee's finding of fact upon conflicting evidence will usually be confirmed. Re Harr, 143 Fed. 421; Re Wheeler, C. C. A., 165 Fed. 188; Baker v. Bishop-Babcock-Becker Co., C. C. A., 220 Fed. 657;. Re Rowe, 240 Fed. 165; Re Lcally, 255 Fed. 358; Cf. Re Cohen, 201 Fed. 188. But see Re Lenweaver, 226 Fed. 987. When confirmed by the district judge, they will very rarely be disturbed upon appeal. Boyd v. Arnold, Loucheim & Co., C. C. A., 149 Fed. 187. See McDonald v. Campbell, C. C. A., 151 Fed. 743. As to the form of the report, see Re Rivkin, 206 Fed. 218; Re Mogen, 218 Fed. 692; Re Lenweaver, 226 Fed. 987; Re Rowe, 240 Fed. 165; Re Troutman & Jesse, 251 Fed. 930. Supra 8 392.
24 Re Wetmore, 99 Fed. 703; Re De Leeuw, 98 Fed. 408; Re Idzall, 96 Fed. 314; Re Hirsch, 96 Fed. 468;
Re Dews, 96 Fed. 181; Re Freund, 98 Fed. 81; Re Cornell, 97 Fed. 29; Re Corn, 106 Fed. 143;
Upon the death of the bankrupt pending his application for a discharge the proceedings should be continued after notice to his personal representative, or if none has been appointed to his widow and next of kin.29 The insanity of a bankrupt, which arises pending the proceedings and prevents his examination by his creditors, is not a bar to his discharge.30 After a discharge had been refused upon the merits, a second application at a subsequent term was denied, although in the meanwhile a grand
Re Gaylor, 106 Fed. 833; Re Hamilton, 133 Fed. 823; Re Walder, 152 Fed. 489; Troeder v. Lorsch, C. C. A., 150 Fed. 710; Re Griffin Bros., 154 Fed. 537; Re Main, 205 Fed. 421; Re Cohen, C. C. A., 206 Fed. 457; Re Johnson, 215 Fed. 747; Re Braun, C. C. A., 239 Fed. 113; Re Garrity, C. C. A., 247 Fed. 310; Horner 6. Hamner, C. C. A., 249 Fed. 134. But when they have made out a prima facie case, such as the existence of assets and their disappearance a short time before the institution of the proceedings in bankruptcy, the burden is shifted to the bankrupt, who must then explain the facts which are peculiarly within his knowledge, or else his discharge will be refused. Re Meyers, 96 Fed. 408; Rė Wood, 98 Fed. 972; Re () 'Gara, 97 Fed. 932; Re Ablowich, 99 Fed. 81.
But see Re Idzall, 96 Fed. 314. They are not obliged to prove the truth of the allegations in their specifications beyond a reasonable doubt.
Re Greenberg, 114 Fed. 773; Troeder v. Lorsch, C. C. A., 150 Fed. 710; Re Delmour, 161 Fed. 589; Re
Atlas, 219 Fed. 783; Re Garrity, C. C. A., 247 Fed. 310; Re Lally, 255 Fed. 358. It has been held that a ruling of the referee denying an exemption because of a concealment of property in violation of the Code of Georgia A. D. 1910, $$ 3377, 3380 was not res adjudicata against the right of a discharge. Re Frosteg, 252 Fed. 199. For circumstantial evidence held to be sufficient, See Re Reed, 191 Fed. 920.
25 Re Bouck, 199 Fed. 453; Re Felts, 205 Fed. 983; Re Newmark, C. C. A., 249 Fed. 341. A creditor who had filed specifications only in his capacity as
a creditor of an individual partner was mitted to offer evidence as to defects in the books of the firm, although he was also a firm creditor. Re Smith, 16 Fed. 465.
26 Re Magen, 218 Fed. 692.
27 Re Miers, 193 Fed. 288; Re Amer, 228 Fed. 576; Re Whitney, 250 Fed. 1005.
28 Ibid. 29 Re Blaesser, 230 Fed. 528. 30 Re Miller, 133 Fed. 1017
jury had refused to indict the bankrupt upon a charge of the same offense that had been held to be a bar to his discharge.31
8 656. Grounds for refusing discharge. A discharge in bankruptcy will be refused if the applicant has “(1) committed an offense punishable by imprisonment as herein provided; or (2)
31 Re Royal, 113 Fed. 140.
$ 656. 1“ (a) A person shall be punished, by imprisonment for a period not to exceed five years, upon conviction of the offense of having knowingly and fraudulently appropriated to his own use, embezzled, spent, unlawfully transferred any property or secreted or destroyed any document belonging to a bankrupt estate which came into his charge as trustee. (b) A per. son shall be punished by imprisonment for a period not to exceed two years, upon conviction of the offense of having knowingly and fraudulently (1) concealed while a bankrupt, or after his discharge, from his trustee any of the property belonging to his estate in bankruptcy; or (2) made a false oath or account in, or in relation to, any proceeding in bankruptcy; (3) presented under oath any false claim for proof against the estate of a bankrupt, or used any such claim in composition personally or by agent, proxy, or attorney, or as agent, proxy, or attorney; (4) or received any material amount of property from bankrupt after the filing of the petition, with intent to defeat this act; or (5) extorted or attempted to extort any money, or property from any person as a consideration for acting or forbearing to act in bankruptcy proceedings. (c) A person shall be punished by fine not to exceed five hundred dollars, and forfeit his office, and the same shall thereupon become vacant, upon con
viction of the offense of having knowingly.(1) acted as a referee in
case in which he is directly or indirectly interested; or (2) purchased, while a referee, directly or indirectly, any property of the estate in bankruptcy of which he is referee; or (3) refused, while a referee or trustee, to permit a reasonable opportunity for the inspection of the accounts relating to the affairs of, and the papers and records of, estates in his charge by parties in interest when directed by the court so to do. (b) A person shall not be prosecuted for any offense arising under this act unless the indictment is found or the information is filed in court within one year after the commission of the offense." 30 St. at L. 544-554, $ 29. See supra $ 506t. There can be no indictment for a concealment of the assets when they were not concealed after the appointment of the trustee. U. S. v. Young & Hol. land Co., 170 Fed. 110. Larceny against the objector, not accompanied by any act made a crime by the bankruptcy law, is no ground for a denial. Re Wolf, 159 Fed. 299. A discharge cannot be denied because the bankrupt has violated a State statute, civil or criminal, unless his act is one forbidden by the bankruptcy law. Re McClellan, 204 Fed. 482. A discharge may be denied because of a false statement in the verified schedules of the bankrupt, Re Becker, 106 Fed. 54; 140 Fed. 728; Re Garrity, C. C. A.,
with intent to conceal his financial condition destroyed, concealed, or failed to keep books of account or records from which such condition might be ascertained ; 2 or (3) obtained money or
247 Fed. 310, and of a false statement in an affidavit upon a motion to dismiss the proceedings, Re Young, 140 Fed. 728; but not for a false statement in verified
answer, which was filed too late for its consideration by the court, Re Young, 140 Fed. 728; nor for false statements in the testimony of the bankrupt in insolvency proceedings, which were by stipulation read in evidence in the proceedings in bankruptcy, Re Goldsmith, 101 Fed. 570; nor for a false oath in other bank. ruptcy proceedings, in which the petitioner for the discharge was not the respondent, Re Blalock, 118 Fed. 679; criticised in Remington on Bankruptcy, $ 2531. The fact that the false testimony related to the existence of property, which could not have been recovered by the creditors, does not relieve the bankrupt, Re Becker, 106 Fed. 54; Re Royal, 112 Fed. 135; Re Conroy, 134 Fed. 764. But see Re Chamberlain, 180 Fed. 304. A subsequent correction or retraction of the false testimony does not obviate the objection, Re Wolf, 156 Fed. 543; Re Marcus, 192 Fed. 743; Re Doyle, 199 Fed. 247; except in so far as it tends to show that the untruth was inadvertent. Re Marcus, 192 Fed. 743; Re Doyle, 199 Fed. 247. Nor is it obviated when, after the creditors had discovered the fraudulent omission from the schedules, he amended the same, Re Eaton, 110 Fed. 731; Re Breiner, 129 Fed. 155; although this may be considered as a circumstance tending to prove good faith, Re Wolf,
156 Fed. 453. Evasive, Re Cohen, 149 Fed. 908; Re Fanning, 155 Fed. 701; and disrespectful, Re Fanning, 155 Fed. 701; answers upon the bankrupt's examination were held to be no reasons for refusing a discharge. The fact, that a grand jury has refused to indict the bankrupt for perjury, Re Royal, 113 Fed. 140; or that he could not be conyicted criminally, Re Gaylord, C. C. A., 112 Fed. 668; for a false statement under oath in the bankruptey proceedings will not prevent the denial of discharge because of the same.
2 Re Helfgoth, 245 Fed. 358; the mere failure to keep books is insufficient, unless it appears that this
done with the intent to conceal his financial condition. Re McCrea, C. C. A., 161 Fed. 246; Re Tanner, 192 Fed. 572; Re Brown, 199 Fed. 356. It has been said that the burden of proof is upon the creditor to show that the failure of the bankrupt to keep books was done with the intent to conceal his financial condition, Re Garrison, C. C. A., 149 Fed. 178; but where a bankrupt, who has had considerable business experience fails to keep any books whatever from which his financial condition can be ascertained; it may be presumed that he did so in order to conceal the same. Re Bragasa, 103 Fed. 936; Re Alford, 135 Fed. 236; Re Amsten, 249 Fed. 256.
The keeping of misleading books, Re Feldstein, C. C. A., 115 Fed. 259; or books without any entries con. cerning alleged debts, upon which