Knetzer v. Larkin, 84
| Decision Date | 29 December 1949 |
| Docket Number | Docket 21451.,No. 84,84 |
| Citation | 178 F.2d 532 |
| Parties | KNETZER v. LARKIN. |
| Court | U.S. Court of Appeals — Second Circuit |
Sidney Paymer, Jamaica, New York, for appellee.
Leo Blatt and I. Robert Bassin, Jamaica, New York, for appellant.
Before L. HAND, SWAN and FRANK, Circuit Judges.
On her own petition, Frances J. Larkin was adjudicated a bankrupt. The trustee for her creditors objected, on six grounds, to her being discharged of her debts. The referee overruled the Trustee's objections, but the District Court reversed the Referee and denied a discharge to Mrs. Larkin. She now appeals from the order of the District Court.
In Specification 6, the Trustee charged that Mrs. Larkin had failed to explain satisfactorily what had happened to large sums of money she had received shortly before bankruptcy. Such a failure is, of course, a bar to discharge. 11 U.S. C.A. § 32, sub. c(7). A Referee's findings may be upset only when they are "clearly erroneous", General Order 47, 11 U.S.C.A. following Section 53, when he alone has an opportunity to see and hear the witnesses. Morris Plan Industrial Bank v. Henderson, 2 Cir., 131 F.2d 975, 976-977. But we believe that, in dismissing Specification 6, the Referee clearly erred and that the District Court must therefore be affirmed.
Mrs. Larkin lived with Bertram E. Reed as man and wife — although they had gone through no marriage ceremony — for about sixteen years until, in January, 1944, he left her. During the last nine of those years, they lived in a house which Mrs. Larkin owned on Aberdeen Road in Queens County, New York. After Reed left, Mrs. Larkin decided to sell the house. On April 3, 1944, a Mr. Pohl agreed to buy it; he gave her $1,500 as a binder. Shortly after, Pohl, claiming to find some defect in the house, demanded his money back. Failing to get it, he brought suit. Mrs. Larkin then arranged to sell the property to Eve Abrams; on July 21 title was taken and payment made. The total payment was $7,497.24, covering the house and some personal property, but, to protect Eve Abrams against Pohl's claim, $2,800 of the payment was put in escrow. Mrs. Larkin received, then, $4,697.24. This, added to other money she had, gave Mrs. Larkin at least $5,653.24 in cash on July 21. Six days later, she paid $2,545.46 for another house on Grand Central Parkway. Title was taken in the name of Janet Schramm, Mrs. Larkin's daughter. On September 1, 1944, Janet Schramm deeded the house to Mrs. Larkin, and on October 18, Mrs. Larkin conveyed the property to her brother, Michael A. Dombek.
Although Mrs. Larkin admits that she had $5,653.24 in cash on July 21, she claims that she did not have enough money six days later to pay for the Grand Central Parkway house. She asserts that she borrowed the needed funds from her brother, Dombek. Since he had supplied the funds, her explanation continues, it was only reasonable for her to turn the house over to him a few months later.
Between July 21 and July 27, Mrs. Larkin had a number of expenses. But she would have been nearly or wholly able to pay for the Grand Central Parkway house herself if she had not — so she says — given $3,000 to Bertram Reed during that week. Mrs. Larkin at one point said she gave Reed the $3,000 to satisfy a mortgage on the Aberdeen Road house. But this was after the house had...
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