In re Schnabel, 17080.

• Decision Date: 03 July 1945
• Docket Number: No. 17080.,17080.
• Citation: 61 F. Supp. 386
• Parties: In re SCHNABEL.
• Court: U.S. District Court — District of Minnesota

61 F. Supp. 386

In re SCHNABEL.

No. 17080.

District Court, D. Minnesota, Fourth Division.

July 3, 1945.

G. Halvorson, of Minneapolis, Minn., for bankrupt.

Joseph C. Vesely, of Hopkins, Minn., for objecting creditors.

NORDBYE, District Judge.

This matter came on for hearing on petition of the bankrupt for review of an order of the Referee denying his discharge.

The Referee has succinctly stated the question presented for review as follows: "That the question presented for review is whether, in a no-asset case, discharge can be denied where the Referee is satisfied that the bankrupt has committed an offense punishable by imprisonment, to wit, the offense of having knowingly and fraudulently made a false oath in or in relation to his bankruptcy proceeding, in this: that in his original petition in said proceeding bankrupt declared under oath that Schedule A, annexed to his petition, contained a full and true statement of all his debts, and so far as it is possible to ascertain, the names and places of residences of his creditors, and in his oath to said Schedule A declared that said schedule is a statement of all his debts, when in fact, at the time the bankrupt signed and made oath to his said petition and schedule, and for some time previous thereto, bankrupt had numerous creditors, whose names and addresses he well knew, as well as the amount of his indebtedness to each of them, all of which bankrupt knowingly, deliberately, intentionally, and wilfully omitted from his said petition and schedule, without any justification or excuse therefor."

Referee Heisey, with commendable care and industry, has set forth his views in the findings of fact and conclusions of law and an extended memorandum. There is naught to be gained by amplifying that which he has so fully and painstakingly stated. Suffice it to say that when a bankrupt deliberately and intentionally makes a false oath in his petition and schedules with reference to his creditors and knowingly, intentionally and wilfully omits from his petition and schedules numerous creditors without any justification or excuse, there should be only one rule which should guide a bankruptcy court in passing upon an objection to his discharge predicated upon such false oath, and that is, that the objections to the discharge must be sustained. This is not a situation where mistake, ignorance, inadvertence or misunderstanding has occasioned the false oath. The Referee has found the falsity in the petition and schedules to be deliberate, intentional and wilful. It cannot be gainsaid, therefore, that the bankrupt wilfully and intentionally committed perjury. That fraud has been perpetrated on the Court on account thereof seems self-evident.

The following are the findings of fact, conclusions of law, and memorandum of the Referee:

"Findings of Fact

"1. On August 8th, 1944, bankrupt signed and made oath to his debtor's petition and to Schedule A annexed thereto which oath was authorized by the Bankruptcy Act and was taken by bankrupt before and administered to bankrupt by a competent officer duly authorized to administer same under the Bankruptcy Act.

"2. On August 14th, 1944, said petition, with said Schedule A annexed thereto, so signed and sworn to by bankrupt, were duly filed in the office of the Clerk of United States District Court for the District of Minnesota, Fourth Division.

"3. On August 14th, 1944, said District Court duly referred above entitled proceeding to the late Horace H. Glenn, then Referee in Bankruptcy.

"4. On August 14th, 1944, Referee Glenn duly entered an order, adjudging petitioner a bankrupt under the Bankruptcy Act.

"5. In bankrupt's original petition in this proceeding, he declared under oath that `the schedule hereto annexed, marked Schedule A, * * * contains a full and true statement of all his debts, and, so far as it is possible to ascertain, the names and places of residence of his creditors * * *' and in his oath to Schedule A annexed to his original petition, bankrupt declared that `said schedule is a statement of all of my debts. * * *.'

"6. At the time bankrupt signed and made oath to his debtor's petition in this proceeding and to Schedule A thereto annexed, and for some time previous thereto, he had the following actual creditors in addition to those shown in Schedule A annexed to his original petition:

"(1) Dr. H. E. Drill, of Hopkins, Minnesota, to whom he owed $117.00

"(2) Kokesh Hardware Company, of Hopkins, Minnesota, to whom he owed $10.00

"(3) Len Milbert, of Hopkins, Minnesota, to whom he owed $70.00

"(4) Eldoro Johnson, of Hopkins, Minnesota, to whom he owed $26.00

"(5) Reuben (R. G.) Guttormson, of Minneapolis, Minnesota, to whom he owed $1,000.00

"(6) Harold Leitzow, to whom he owed $70.00

"(7) Dr. I. H. Picha, of Hopkins, Minnesota, to whom he owed $4.00

"(8) Gately Clothing Company, to whom he owed $19.00, and

"(9) Albin Alberg, to whom he owed $57.00.

"7. At the time this bankrupt signed and made oath to his debtor's petition in this proceeding and to Schedule A thereto annexed he well knew that the persons and firms whose names and places of residence appear in Finding 6 hereof, to which reference hereby is made, were then and for some time previous thereto had been his creditors.

"8. At the time this bankrupt signed and made oath to his debtor's petition in this proceeding and to Schedule A thereto annexed he knowingly, deliberately, intentionally, and wilfully, omitted therefrom the listing and the names and places of residence of nine of his creditors whose names and places of residence appear in Finding 6 hereof, to which reference hereby is made, said omission by him then and there being inexcusable and unjustifiable.

"9. On September 8th, 1944, bankrupt signed and made oath to and thereafter filed a petition to amend Schedule A, annexed to his original petition, to include in said original Schedule A the names and places of residence of eight of his creditors, mentioned in Finding 6 hereof, to which reference hereby is made, originally omitted therefrom as aforesaid.

"10. On September 21st, 1944, Horace H. Glenn, then Referee in Bankruptcy, made an order authorizing the amendment prayed for in bankrupt's petition mentioned in Finding 9 hereof, to which reference hereby is made.

"11. The listing by bankrupt in his original Schedule A annexed to his original petition, of all of his creditors, together with their places of residence, was a material matter in and in relation to this bankruptcy proceeding and bankrupt's omission in that regard, as stated and found in the foregoing Finding, to which reference hereby is made, was a material matter in and in relation to this bankruptcy proceeding.

"12. Bankrupt's declaration under oath in his original petition that the Schedule thereto attached, marked Exhibit A, contains a full and true statement so far as it is possible to ascertain, of the names and places of residence of his creditors related to a material matter in this bankruptcy proceeding and bankrupt's said declaration under oath was wilfully false and contrary to his oath and was known and believed by bankrupt to be untrue at the time he signed and made oath to his original petition and original Schedule A thereto annexed.

"13. Bankrupt in the premises stated in the foregoing Findings, to which reference hereby is made, knowingly, deliberately, and intentionally practiced and perpetrated deceit upon the United States District Court for the District of Minnesota and upon the Referee in Bankruptcy to whom above proceeding was referred.

"14. Bankrupt's acts and conduct, in the premises stated in the foregoing Findings, to which reference hereby is made, dishonestly interfered with and disrupted the due and proper administration of the affairs involved in above bankruptcy proceeding and in the estate of bankrupt, and impaired the lawful functions of the Referee in Bankruptcy to whom above proceeding was referred.

"15. Bankrupt, in the premises stated in the foregoing Findings, to which reference hereby is made, knowingly and wilfully suppressed and concealed material information and facts which the United States District Court and the Referee in Bankruptcy were legally entitled to know and which the bankrupt was required by law to furnish said Court and Referee.

"16. Bankrupt, in the premises stated in the foregoing Findings, to which reference hereby is made, deliberately, wilfully, and knowingly deprived his creditors, whose names and places of residence he omitted from his original Schedule A, of the right to notice of and participation in above proceeding and bankruptcy estate.

"Conclusions of Law

"1. On August 8th, 1944, bankrupt committed an offense punishable by imprisonment as provided under the Bankruptcy Act in that he knowingly and fraudulently made a false oath in and in relation to this proceeding under the Bankruptcy Act in this, to wit, that on the date aforesaid the bankrupt subscribed to a declaration under oath in his original debtor's petition in this proceeding that the schedule annexed to said petition, marked Schedule A, contained, so far as it was possible to ascertain, the names and places of residence of his creditors, whereas, in truth and in fact, bankrupt deliberately, intentionally, wilfully and contrary to his oath omitted from such schedule certain material matter, to wit, the names and places of residence of at least nine of his creditors which then and there were and for some time previous thereto had been well known to him and to each of whom he then and there was and for some time previous thereto had been indebted in amounts ranging from $4.00 to $1,000.00, as he then and there well knew.

"2. Bankrupt, having demonstrated his dishonesty as aforesaid, should be granted no favor.

"3. Bankrupt, by virtue of the premises aforesaid, is not entitled to be discharged in this bankruptcy proceeding from his obligations.

"Dated April 10, 1945.

"Geo. A....