In re Schenck

• Decision Date: 01 July 1902
• Docket Number: 2,217.
• Citation: 116 F. 554
• Parties: In re SCHENCK.
• Court: U.S. Court of Appeals — Ninth Circuit

116 F. 554

In re SCHENCK.

No. 2,217.

United States District Court, D. Washington.

July 1, 1902

Roberts & Leehey, for bankrupt.

Gray &amp Tait, for creditors.

HANFORD District Judge.

After studying the testimony in this case with patience, I am unable to escape from the conclusion that the bankrupt has deliberately transferred his property with an intention on his part to either retain it for himself or give his family the benefit of it, in fraud of the rights of his creditors. From the examination of the bankrupt, it appears that his affairs are in a state of confusion, but upon being plied with questions he disclosed facts which can be put together and which, when connected, make as plain a case of deliberate, intentional fraud as could well be made without a confession. To begin with, Mr. Schenck believes that his legal liabilities upon contracts guarantying the value of mining stock which he and another person sold are not just debts. Such obligations constitute a considerable part of his liabilities, and that thought had a tendency to relieve his conscience, and furnished a motive, in addition to the natural desire which any person who has been possessed of a fortune has, to wish to save something from the wreck for the benefit of his family. In the next place, besides having a motive, the testimony of his late associate, Mr. Bacon, shows that he had a disposition to transfer property, so as to give his family the benefit of it, and deprive his creditors of their rights against it. I refer to that part of Mr Bacon's deposition reciting a conversation showing that Mr. Schenck contemplated going into bankruptcy, and that with that idea in mind, he proposed to transfer property directly to his daughter, and was deterred from doing so by being warned that such a proceeding would probably get him into trouble. Among the transactions of Mr. Schenck shown by his own testimony, I find that, within a period of less than one year from the date of filing his petition, he advanced $750 to his youngest son, to enable him to go to Alaska, and procure an outfit for engaging in mining operations in that country, which was to be repaid to him if the young man met with success in his venture. Although he expected the amount advanced to be a loss if the venture proved to be a failure, it was nevertheless a debt legally due to him, and it should have been listed in his schedule of assets, but was omitted. In ...