In re Phillips

• Decision Date: 15 April 1924
• Docket Number: 648.
• Citation: 298 F. 135
• Parties: In re PHILLIPS.
• Court: U.S. District Court — Southern District of Ohio

298 F. 135

In re PHILLIPS.

No. 648.

United States District Court, S.D. Ohio, Western Division.

April 15, 1924

P. H Rue, of Franklin, Ohio, for bankrupt.

Patrick Gaynor, of Franklin, Ohio, for objecting creditor.

HICKENLOOPER District Judge.

This cause comes up for hearing on specifications in opposition to the granting of a discharge to the bankrupt. The specifications insisted upon are as follows:

(1) That said bankrupt has not given the correct amount of property owned by him, nor the correct amount of the value of said property.

(2) That the action in which the undersigned obtained the judgment against said bankrupt in the common pleas court of Montgomery county, Ohio, as shown and designated in the schedule of debts filed by said bankrupt herein, was an action for injuries to the property of the undersigned and to his wife, whereby he lost her services and companionship, and caused by the willful operation of an automobile by said bankrupt in the village of Miamisburg, Montgomery county Ohio, in violation of the laws of the state of Ohio and the ordinances of said village.

Section 14b of the Bankruptcy Law (Comp. St. Sec. 9598) provides:

'The judge shall hear the application for a discharge and such proofs and pleas as may be made in opposition thereto * * * and discharge the applicant unless he has * * * (4) at any time subsequent to the first day of the four months immediately preceding the filing of the petition transferred, removed, destroyed, or concealed, * * * any of his property, with intent to hinder, delay, or defraud his creditors. * * * '

This last-quoted subdivision of section 14b is the only subdivision thereof even remotely bearing upon the allegations, if such they can be called, of the first specification. Nor does it seem intended by this specification to charge the commission of any of the offenses punishable by imprisonment under the Bankruptcy Act, which is made a reason for refusing the discharge under subdivision (1) of section 14b, unless it be, inferentially, the concealment of assets from the trustee under section 29 (Comp. St. Sec. 9613).

The first question for consideration, therefore, is whether this specification sufficiently states any ground for refusing the discharge, for it is almost elementary that the discharge may be refused only for one or more of the reasons specifically stated in section 14b as justification for such refusal. If no such justification exists, the discharge will be granted as a matter of course. Likewise it has been established by repeated decisions that 'Specifications must be clear and unequivocal, and contain specific averments of facts; they should be pleaded with greater particularity than complaints in civil actions.' 1 Collier on Bankruptcy (13th Ed.) 498, and cases there cited.

'The allegations must be specific, and of such a character that their sufficiency may be met by demurrer, or by exceptions analogous to those allowed in equity. ' Troeder v. Lorsch, 150 F. 710, 711, 80 C.C.A. 376, 377 (C.C.A. 1).

'It is evident that the specifications of objection should point out or specify what property was concealed, and when, with some reasonable degree of certainty. ' In re Agnew, 225 F. 650, 654 (D.C.N.Y.).

See, also, In re Ruhlman, 279 F. 250, 252 (C.C.A. 2).

Does the first specification in the instant case meet these conditions? The bankrupt has filed a demurrer to the specifications which, considered as a demurrer or as a motion to dismiss, tests the sufficiency in law of the allegations made. Clearly, by any of the rules laid down, the first specification is wholly insufficient to sustain an objection to the discharge.

'The rule is the facts relied on to prevent a discharge must be pleaded with sufficient certainty of detail as to apprise the bankrupt of the charge he has to meet and to enable the court to understand the issue to be examined and determined by it. ' Remmers v. Merchants'-Laclede National Bank, 173 F. 484, 486, 97 C.C.A. 490, 492 (C.C.A. 8).

Here no facts are pleaded-- no detail set out. The bankrupt and the court alike are left to speculate upon the exact nature of the charge and the evidence which must be produced to meet it. By no rule of pleading or reason could any such specification be sustained as good against demurrer. Such demurrer or motion to dismiss must be sustained.

We come, then, to a consideration of the second specification. Here it is urged that, unless this specification be sustained, the only debt scheduled will be one which is not dischargeable under the Bankruptcy Act, and inasmuch as any voluntary bankrupt must have at least one dischargeable debt before he can file a petition in bankruptcy, this condition will not be met, and the petition itself must be dismissed. Even if we concede that the debt upon which this specification is founded is the only debt of the alleged bankrupt and that it is not dischargeable, yet we cannot accede to the position taken by the objector. This exact point was decided in favor of the granting of a discharge in In re Tinker, 99 F. 79 (D.C.N.Y.), and inferentially in In re Carmichael, 96 F. 594 (D.C. Iowa), In re McCarty, 111 F. 151 (D.C. Ill.), and In re Gara, 190 F. 112 (D.C. pa.). In these...