In re Rhutassel

• Decision Date: 23 September 1899
• Citation: 96 F. 597
• Parties: In re RHUTASSEL.
• Court: U.S. District Court — Northern District of Iowa

96 F. 597

In re RHUTASSEL.

United States District Court, N.D. Iowa, Central Division.

September 23, 1899

F. H Harriman, for bankrupt.

John M Hemmingway, for creditors.

SHIRAS District Judge.

Upon the filing of the petition for discharge in this case, the Bank of Hampton objected to the granting a discharge to the bankrupt upon the ground that the debt due the bank, and which now exists in the form of a judgment, was created by false pretenses and fraudulent representations with respect to his property on the part of the debtor; and it is further prayed that the court, if a discharge is granted, will find and adjudge that the discharge is not effective as against the claim of the bank, because of its fraudulent origin; and the creditors further ask that the testimony in support of the objections to the discharge be taken before the referee or some other proper party residing in the county wherein the debts were created.

Under the provisions of the bankrupt act, there are certain matters inhering in the conduct of a bankrupt which will defeat the granting of a discharge; and there are other matters inhering in or connected with the character of certain claims which except them from the effect of a discharge, if granted. To defeat the right to a discharge, it must be shown that the bankrupt has committed an offense punishable by imprisonment under the provisions of the act or, with fraudulent intent to conceal his true financial condition, and in contemplation of bankruptcy, destroyed concealed, or failed to keep books of account or records from which his true condition might be ascertained. Section 14 of bankrupt act. The effect of a discharge, when granted, is declared in section 17 of the act, which provides that a discharge shall release a bankrupt from all his provable debts, except taxes; judgments in actions for fraud, or obtaining property by false pretenses or false representations, or for willful and malicious injuries to the person or property of another; claims not duly scheduled by the bankrupt, unless the creditors had notice or actual knowledge of the pendency of the proceedings; and debts created by fraud, embezzlement, misappropriation, or defalcation of the debtor while acting as an officer or in a fiduciary capacity. The facts set forth in the specifications filed in opposition to the petition for discharge do not show that the bankrupt has committed an offense punishable by imprisonment, under the provisions of section 29 of the act, or that with fraudulent intent, and in contemplation of bankruptcy, he has destroyed or concealed, or failed to keep, books of account or records from which his financial condition might be ascertained. The specifications therefore fail to show a reason for refusing the discharge, and the only remaining question is whether the court will hear and determine the proposition touching the effect of the discharge upon the debt due the bank, upon the hearing of the petition for discharge. As a matter of pleading, the petition presents only the question whether the bankrupt is entitled to a discharge, and does not tender any issue touching the effect of the discharge, if granted, upon particular debts or claims. In opposition to the petition, creditors are entitled to aver and prove any matter which the act declares shall bar the granting of a discharge, but it would certainly be no ground for refusing a discharge if it appeared that there were claims in existence which a discharge would not bar or release. The right to a discharge is one thing, and the effect of it, when...