In re Underhill
| Decision Date | 10 February 1936 |
| Docket Number | No. 205.,205. |
| Citation | 82 F.2d 258 |
| Parties | In re UNDERHILL. |
| Court | U.S. Court of Appeals — Second Circuit |
Benjamin F. Levy, of Elmira, N. Y. (Arthur F. Gotthold, of New York City, and Benjamin F. Levy, of Elmira, N. Y., of counsel), for appellant.
Andrews & Andrews, of Owego, N. Y. (George L. Andrews, of Owego, N. Y., of counsel), for appellee.
Before MANTON, AUGUSTUS N. HAND, and CHASE, Circuit Judges.
Appellee was adjudged a bankrupt February 9, 1933, and a trustee of his estate was appointed. Appellant filed a claim for $51,000, and now appeals from his discharge in bankruptcy pursuant to an order entered therefor June 12, 1935. She bases her claim on the failure of the bankrupt to keep books of accounts or records from which his financial condition and business transactions might be ascertained; also, that a trust agreement, dated July 15, 1932, was executed with intent to hinder, delay, and defraud his creditors within section 14b (2), (4) of the Bankruptcy Act, as amended by Act May 27, 1926, c. 406, § 6, 44 Stat. 663, 11 U.S.C.A. § 32 (b) (2, 4).
The bankrupt had traded extensively in the stock market, buying and selling securities on which he eventually lost heavily. He had been appointed trustee in two estates created by relatives, which amounted to more than $300,000, in which he was named as remainderman. He had withdrawn large sums from these estates for his personal use. By an order of the Surrogate's Court, after an accounting, he was surcharged for these appropriations. Although the bankrupt had a college education and had had banking experience as an officer of several banking institutions, the appellee testified in these proceedings that he had kept no books of account as to these estates, nor for his personal matters.
The bankrupt testified that prior to October, 1930, his net worth was from $350,000 to $500,000. This was the best definite estimate he was capable of giving. The schedules in bankruptcy show $190,000 liabilities owed to banks, investment houses, and individuals. He attempts to excuse his failure to keep books of account, testifying he was a "poor business man," after admitting his business experience and education. For books of account, he substituted certain records and asked the court below to accept them as a substitute for a set of books. These are income tax reports which do not show assets and liabilities. He did not prepare or show an inventory of his assets or his liabilities and the income tax reports are of little value. No bank deposit books were submitted for, as he says, "it was not necessary to have a bank book," and he says he never had one. No duplicate deposit slips were produced. Although some canceled checks were produced, it is impossible to say whether all he had were exhibited. Some were to cash or to a bank direct and he was unable to explain many of them. His check books with some notations on the stubs were of little value. Many stubs were not filled out. The bank accounts were of little assistance in unraveling the business transactions of the bankrupt. The item of $50,000 borrowed from the appellant does not appear either as a deposit or otherwise through his bank accounts. Much was left to the bankrupt's admittedly poor memory. While some brokerage monthly statements were produced, they are not sufficient. Some items of receipts by the bankrupt remain unexplained as to whether, where, and how they were expended.
The second specification relied on was a violation of clause (4) of section 14b, Bankr.Act, as amended, 11 U.S.C.A. § 32 (b) (4), providing that at any time subsequent to the first day of the twelve months immediately preceding the filing of a petition, if a bankrupt transfers, removes, destroys, or conceals or permits to be removed, destroyed, or concealed any of his property with an intent to hinder, delay, or defraud his creditors, he may not obtain a discharge.
By a trust agreement, executed on July 15, 1932, within a year prior to the filing of this petition, the bankrupt attempted to transfer substantially all the property which he possessed or had in his control, to trustees for the purposes specified, that is, to secure the...
To continue reading
Request your trial
-
O'Hearn v. Gormally (In re Gormally)
...section] is to make the privilege of discharge dependent on a true presentation of the debtor's financial affairs.” In re Underhill, 82 F.2d 258, 260 (2d Cir.1936). For a plaintiff to successfully object to a discharge under Section 727(a)(3), the plaintiff must show that: “(1) the debtor f......
-
In re Tauber
...nor is there any rigid standard of perfection in record-keeping mandated by § 727(a)(3). Meridian Bank, 958 F.2d at 1230; In re Underhill, 82 F.2d 258, 259-60 (2d Cir.), cert. denied, 299 U.S. 546, 57 S.Ct. 9, 81 L.Ed. 402 (1936); In re Zell, 108 B.R. 615, 627 (Bankr.S.D.Ohio 1989); In re S......
-
In re Henderson
...to ascertain the debtor's true financial condition or business transactions. See In re Artura, 165 B.R. at 15 (citing In re Underhill, 82 F.2d 258 (2d Cir.), cert. denied, 299 U.S. 546, 57 S.Ct. 9, 81 L.Ed. 402 (1936); Shiboleth v. Yerushalmi (In re Yerushalmi), 393 B.R. 288, 297 (Bankr. E.......
-
Walz v. Smith (In re Smith)
...creditor may have been dissatisfied with the records produced did not mean they were insufficient. Id. at 815-16 ; see also Underhill, 82 F.2d 258, 259 (2d Cir.), cert. denied , 299 U.S. 546, 57 S.Ct. 9, 81 L.Ed. 402 (1936) ("the law ... does not require that [records] shall be kept in any ......