In re Sandow
| Decision Date | 05 November 1945 |
| Docket Number | No. 80.,80. |
| Citation | 151 F.2d 807 |
| Parties | In re SANDOW et al. |
| Court | U.S. Court of Appeals — Second Circuit |
George W. Wollins, of New York City (Murray M. Cowen, of New York City, of counsel), for bankrupt-appellant.
Isador Goetz, of New York City, for appellee.
Before L. HAND, CHASE, and FRANK, Circuit Judges.
The bankrupt produced no books and records of any kind from which his financial transactions could be ascertained. He testified that he had kept none; and the referee held that his failure to do so was justified and granted his application for a discharge. The district judge denied the discharge and it is from this order that the bankrupt has appealed.
The referee reached his conclusion apparently because he believed the bankrupt was a small wage earner who was under no obligation as a condition upon his discharge to keep and preserve any books or records which would disclose his financial status. The opposite conclusion was reached by the district judge apparently because he believed that the bankrupt had incurred his debts in conducting businesses which in kind and extent ordinarily required the keeping of books and records of account and that his failure to do that was not shown to have been justified as the statute requires. § 14, sub. c(2) of the Bankruptcy Act, 11 U.S. C.A. § 32, sub. c(2).
The record presents the all too frequent situation of a bankrupt uncertain and confused as to the number and amount of his debts and as to what has become of such property as he may have had. There is no dispute as to the facts so far as they did appear and those which need mention will now be stated.
On October 18, 1943, the appellant was adjudicated a bankrupt on a voluntary petition filed that day. His schedules showed debts of about $42,000 and about $15,000 of them were contingent. No assets were disclosed. No books or records of any kind were ever produced. All but one of the obligations from which he sought a discharge grew out of three business ventures, in which he and at least two others participated as part owners, in the City of New York during about two years ending in December 1941. They were so-called milk bars owned in the names of three corporations formed by the bankrupt and his associates and called respectively 1544 Broadway Corporation, Metropolitan Farms and Metro Milk Bar. Books of account were kept for all of these corporations by an accountant but none of their records or books were produced by the bankrupt. There was some evidence that some of them had been taken to a lawyer's office and that some had been thrown away after they had been wet in a flooded basement where they were stored after the milk bars proved unsuccessful. However that may be, the record is barren of proof that the bankrupt made any effort to preserve or produce any of such books or records. He owned one-third of the stock and was the president both of Metropolitan Farms and of the Metro Milk Bar, but was inactive in their affairs except as he personally endorsed or guaranteed some of their obligations and signed their checks as president when such checks were made out by someone else and presented to him for signature. He worked on the premises of 1544 Broadway Corporation for a salary of $30.00 a week, was its treasurer and had some investment in it, the nature and amount of which were not shown.
The issue presented by this appeal is whether the district judge not only had to accept the referee's findings of fact unless clearly erroneous, as he is by General Order 47, 11 U.S.C.A. following section 53 required to do, but had also to adopt, contrary to his own judgment, the referee's conclusion that on those facts this bankrupt's failure to produce any books or records of account was justified, unless it can be demonstrated that the conclusion was "clearly erroneous."
We have held that our power to review a referee's findings of fact is subject to the same limitation as that which is imposed upon the district judge. Morris Plan Industrial Bank v. Henderson, 2 Cir. 131 F.2d 975. But after findings of fact not clearly erroneous have been made...
To continue reading
Request your trial
-
O'Hearn v. Gormally (In re Gormally)
...his or her records, the burden shifts to the debtor to justify their absence. See In re Cacioli, 463 F.3d at 235 ; In re Sandow, 151 F.2d 807, 809 (2d Cir.1945) (“The statute puts the burden squarely upon the bankrupt who produces no financial records to produce at least a satisfactory expl......
-
Burchett v. Myers
...produce such books or copies thereof. White v. Schoenfeld, 2 Cir., 117 F.2d 131; In re Sandow, D.C.S.D.N.Y., 59 F. Supp. 782, affirmed 2 Cir., 151 F.2d 807. There was no showing of justification for the failure to keep adequate books or records in this case. While the bankrupt had only a se......
-
In re Goldstein, Bankruptcy No. 90-11473S
...under no duty to keep them," or that her failure to maintain books and records was justified under the facts of the case. In re Sandow, 151 F.2d 807, 809 (2d Cir.1945). See also Office of the Comptroller General of Bolivia v. Tractman, 107 B.R. 24, 26 (S.D.N.Y.1989); In re MacPherson, 101 B......
-
In re Young
...958 F.2d at 1231. The Second Circuit Court of Appeals described the standard for whether a debtor has shown justification in In re Sandow, 151 F.2d 807 (2d Cir.1945) (applying Section 14(2) of the Bankruptcy Act). The court stated: If [the debtor's transactions] were such that others in lik......