Duggins v. Heffron

• Decision Date: 03 June 1942
• Docket Number: No. 9952.,9952.
• Citation: 128 F.2d 546
• Parties: DUGGINS v. HEFFRON.
• Court: U.S. Court of Appeals — Ninth Circuit

128 F.2d 546 (1942)

DUGGINS v. HEFFRON.

No. 9952.

Circuit Court of Appeals, Ninth Circuit.

June 3, 1942.

Lyle W. Rucker, of Los Angeles, Cal., for appellant.

Earl E. Moss, of Los Angeles Cal., for appellee.

Before DENMAN, STEPHENS, and HEALY, Circuit Judges.

DENMAN, Circuit Judge.

This is an appeal from an order of the district court of July 14, 1941, denying to appellant his discharge in his voluntary bankruptcy proceeding commenced October 15, 1938. The findings of the referee, confirmed by the district court, on which the order was made, are as follows:

"That by reason of said findings of fact and conclusions of law this Court now finds that the said bankrupt committed the following acts punishable by imprisonment as provided in Section 29 of the Bankruptcy Act, 11 U.S.C.A. § 52, to-wit:

"1. That said bankrupt knowingly and fraudulently, and with the intent to hinder, delay and defraud creditors, concealed from the trustee of his estate the above described real property, by conveying and causing the same to be conveyed to Harriet M. Duggins, his wife, as her separate property, and by permitting the record title to said real property to remain in the name of his said wife and by his failure to list said real property in his verified schedules in bankruptcy, and by his failure to reveal the facts concerning his ownership of said property and the holding of the same in trust for him by his said wife at his first meeting and in his testimony before the Referee.

"2. That the said bankrupt knowingly and fraudulently made a false oath in relation to a proceeding under the said Bankruptcy Act in that he did not list any of the said above described real property in his schedules, to which he made oath, but omitted the same therefrom and stated therein that he did not own any real property."

It appears from the record of the hearing before the referee on the issue of the bankrupt's right to discharge that "Oral and documentary evidence was introduced and the matter submitted to the court on briefs, and the court being fully advised in the premises, now makes the following findings of fact." The record nowhere shows any oral or documentary evidence which was introduced at the hearing for the discharge of the bankrupt. This requires us to affirm. Federal Surety Co. v. A. Bentley & Sons Co., 6 Cir., 51 F. 2d 24, 26, 78 A.L.R. 1041; Krauss Bros. Co. v. Mellon, 276 U.S. 386, 390, 48 S.Ct. 358, 72 L.Ed. 620; United States v. Copper Queen Consolidated Mining Co., 185 U.S. 495, 496, 497, 498, 22 S.Ct. 761, 46 L.Ed. 1008.

There is evidence in the record of various hearings held in connection with the examination of the bankrupt for the determination of the extent of the property owned by him at the time his petition was filed, and it is agreed by counsel that this testimony may be here considered in considering the validity of the findings. This does not give us the testimony, oral and documentary, heard by the referee and upon which his findings were based. However, it is sufficient to sustain both the findings.

In a suit by the trustee against the bankrupt, Heffron v. Duggins, 9 Cir., 115 F. 2d 519, considered by us on appeal, it was found that the bankrupt on or about April 16, 1926, transferred certain property to his future wife without consideration and with intent to hinder, delay and defraud his existing and future creditors. It was held that despite the finding that the transfer was made without consideration and with such intent, the trustee was barred because for more than three years, the statutory period of limitation in California, the creditors in question had sufficient knowledge which, if pursued, would have disclosed the fraudulent acts.

The fact that in this bankruptcy proceeding the bankrupt gave testimony that he had sold the property to his wife for a valuable consideration, which the finding in that suit necessarily held false, was sufficient to constitute reasonable grounds for believing that there was an existing concealment of the existence of the bankrupt's equitable ownership of the property, and hence to transfer to the bankrupt the burden of proof that he had not concealed the existence of such ownership in his failure to list his equitable title in his schedules.¹

It appears from testimony so stipulated to be considered by this court, that on November 15, 1938, the bankrupt testified that his wife still owned the property which at that time he falsely claimed he previously had transferred to her for a valuable consideration. Such ownership in the wife, after the filing of his petition, does not sustain the bankrupt's burden of proof. Instead, it is sufficient to sustain the finding that the concealment had continued during the entire period from the transfer to the hearing in question, that is,...