IN RE TOWNSEND.
that in this case, on the facts as conceded, the bankrupts are entitled to their discharge." Judge Blatchford has, In re Sheldon, expressed an opinion on this subject, but it was obiter dictum, as the proceedings all commenced before the twenty-second of June, 1874, aud consequently were not governed by that law. Judge Gresham, U. S. district judge for Indiana, has taken the Bame view of the case as Judge Blatchford. On the weight of the authorities (as far as I can inform myself) I shall follow Judge Drummond's opinion, and conclude that the act of June 22, 1874, altogether repealed the provisional clause of 5112 in both of the Revised Statutes, and that, as a necessary result, if there had (in this case) been any assets to entitle the bankrupt to a discharge, there must have been 30 per cent. of the claims proven against his estate upon which he is liable as a principal debtor, without regard to the time they originated; and if, as in the present case, there are no assets, then it is requisite to have the assent of one-third in value and one-fourth in number of his creditors to assent to his discharge, no matter when the claims of these creditors arose. By this repeal the creditors whose debts were contracted before the first day of January, 1869, whether they have proven their claims or not, are "entitled" to the same 8tatu8, as to giving or withholding their assent to a discharge of the bankrupt, as all the other creditors. As the law now stands, after the repeal of the provi8ion afore8aid, the bankrupt has to have- 30 per cent. of the proven cla.imB only, and, therefore, creditors who have not proven their claims cannot add them to swell the aggregate of the bankrupt's liability, but they are, in general terms, without any words of restriction as contained in the repealing act, let in to give or withhold their assent to the bankrupt's discharge where there are no, or not sufficient, assets. The exact wordil, showing no restriction in the repealing act, are as follows: "Without the assent of at least one-fourth of his creditors in nUJ;llber, and one-third in value." Thus it will be seen that upon this construction of· the law the bankrupt has not the requisite amount in value of creditors assenting to his dis-
charge to entitle him to it, the deficiency being, as before shown, $1,954.29. A strong effort has been made by certain creditors to prevent the discharge of the bankrupt. Elaborate specifications have been filed, each one of which has been denied or answered, The grounds for opposing the discharge, without reciting in detail the specifications and answers, are substantially as follows: First. That the bankrupt has "wilfully sworn falsely" in his affidavit annexed to his original petition and Schedule A thereto, in that he omitted to set forth certain debts of the Wilmington Rolling Mill Company, amounting to $37,500, which he had assumed, and many other debts to the creditors unknown. As to this specification the court takes leave to say that it considers there is no evidence whatever, in all the transactions brought to its notice, of any wilful false swearing within the meaning of the provisions of the bankrupt act; that the evidence conclusively shows that the indebtedness named in this specification was that of the Wilmington Rolling Mill Company, not that of the bankrupt; as it was proven in the case, and not successfully refuted by the creditors, that the ultimate liability for the payment of this $37,500 depended on the successful prosecution of the rolling mill business, from the which, for this consideration, had been company to the bankrupt. The last clause of the first specification, in these words, viz., "and many other debts to the creditors unknown," is faulty by reason of its generality and want of precision. Second. Specification charges wilful false swearing, in that he did not embody in his Schedule B all his assets and property. On an examination of the evidence, this court thinks the bankrupt should have returned articles of property which he omitted, but under such circumstances as to negative any idea of wilful false swearing or fraud on provisions of the bankrupt act. He should have returned his household goods, though it was very natural that a former exemption of the same propertj' under execution by the sheriff,
IN BE TOWNSEND.
his wife's property, should have induced the mistaken belief that they belonged to her. This was a mistake on his part, for the law had not been so altered in favor of married women as to secure these household goods to her, although purchased for her by a relative. So he should have produced whatever choses in action he held, however worthless, at the time he considered them. He should have returned in this Schedule B any real estate standing in his name, no matter to what extent it may have been covered with judgments against him. He should have returned his gold watch, wearing apparel, etc., etc., and have relied on the exemption under the United States and state laws, which are liberal in their provisions. I shall then order the bankrupt's schedules, in reference to the matters above stated, to be amended so as to comply with the law. Third. False swearing by the bankrupt that "he had no books, deeds or papers relating to his business at the time of filing his petition. There may be more stringent reg uire· ments made of some bankrnpts than of others in the matter of books to be kept by them." Considering the wide range of capacity 'of those entering into and failing in busin1:Jss who are entitled to the benefits of the bankrupt law, it must needs be that there are many very honest men who are not professional book-keepers themselves and have no means to employ them; but as it is an essential feature of the bankrupt law that a free discharge must depend upon a free discovery of assets and delivery of the same to the: assignee, books of accounts, i. e., written evidence of all the credits and liabilities of the business engaged in, must be kept, and the production of some books of account of this nature must be made, to enable the bankrupt to obtain a discharge. The degree of accuracy and particularity required will depend, in a great degree, on the circumstances of each case. Books which show an honest attempt to throw auch light on his business transactions as will make them reasonably plain of themselves, or capable of being made plain by explanation, are sufficient, within the meaning and intention the bankrupt lal7.
Now, the books produced in this hearing by the bankrupt have been at the service of the creditors of the Wilmington Rolling Mill Company, or his individual creditors, since the time of his filing his petition in bankruptcy; and in this con· nection it may be well to give a short statement of the bankrupt's relations with the company. Finding the business not a remunerative one, they entered into articles of agreement with the bankrupt, the contents of which articles of agreement, proven by parol, (they having been lost,) established these facts: The rolling mill company were, by certain trustees named in the articles of agreement, to deed the whole real and personal estate of the company, fixtures and appurtenances, to the bankrupt, on consideration that he would assume one-half of the indebtedness thereof. In pursuance of this agreement he gave to the trustees of the company his judgment bond for the payment of $37,500, which was duly entered against him; and thereupon he was placed in the possession of the real and personal estate, fixtures, etc., etc., with the distinct understanding and agreement between himself and the trustees of the creditors of the company that if he succeeded in his business, to the extent of paying off the indebtedness of $37,500 entered against him, he was to be entitled to all the profits over and above that sum he could make, and be absolute owner of the real and personal estate conveyed to him; and also that if, after his best efforts to succeed, he should fail in the business undertaken, he should turn over to the company, and the company should accept, real estate and personal estate they had sold and posall sessed him of, and should then satisfy the judgment entered against him. In point of fact, the creditors took out execution on this judgment, and levied on and sold all the real and personal property they had before transferred to the bankrupt. It is evident to the court that the bankrupt in good faith tated the redelivery of all the property put into his hands by the company. So much as bearing on the question of books: The company had, of course, a set of books kept in the usua,l manner, and
IN BE TOWNSEND.
with ordinary accuracy and particularity. Mr. Townsend, succeeding to the business, took up and continued the same books. His final interest in the concern was a contingent one, and, as it proved in the end, the trustees of the company were ultimately interested in their contents. If we were disposed to be technical we might suggest the query whether these books, in any proper sense, can be called the bankrupt's books; but we waive that question. The books were, with all other property, credits, etc., turned over to the trustees of the creditors, and, upon a full and searching examination of the bankrupt, in open oourt, he has cleared up whatever might need explanation. On this point the court is fully satisfied' that the formal <>bjeotion of not keeping proper books of account has failed. Specification 4. The substance of this specifioation is the wilful concealment of property. On an examination of the -evidence submitted, the court does not think this specification is sustained. Specification 5. The court does not think that there has been such fraud and negligence in not delivering his property to his assignee, as charged in this specification, as to prevent his discharge, if that deficiency is correcte'd by obeying the orders of the court to amend his schedule in that behalf, and he is otherwise qualified. Specification 8. Property wilfully omitted. This specification is answered by the order of this court requiring of the bankrupt to amend his schedules in that behalf. Under this speci.fication we observe that there was no such wilful omission as should deprive the bankrupt of a discharge, if otherwise entitled to it. Specification 7. Proper books of account not kept. This specification is already disposed of by the remarks heretofore made. Specification 8. Is indefinite, uncertain, and faulty in .all respects. It does not specify properties or moneys oon.cealed, times, places, or any circumstances, such as demand .an answer.
Specification 9. This specification has already been can· sidered. Specification 10. Alleging that the assent of Williams, one was of no avail, as he was of the creditors of the at the time non compos mentis, was withdrawn. The bankrupt cannot receive his discharge now. The application will, therefore, be indefinitely continued, to allow him to obtain the requisite number in amount and value of his creditors, and to conform to the order of the court now made that he shall amend his schedules, referring to his ownership and possession of property, as above indicated, and in order that he may claim the exemption allowed him under the state and United States laws. The court considers him entitled to a discharge on his compliallce with the matters of form made necessary by the acts of congress, and shall so order when they are comnlied with.
ONDERDONK .,. FANNING.
(Circuit Oourt, E. D. New York.
EQUITY-PRACTlCE--MoTION TO ATTACH FOR
May 17, 1880.)
A patent for a lemon-squeezing machine was soil! to O. by b'., the inventor, who thereafter still made and sold machines a little different. A suit for infringement being brought, and a temporary injunction granted against F., he devised an improvement on O. 's machine, and obtained a patent for it. A motion to attach F. for contempt of the injunction being made, held, that the question between two patents, raised by this second invention, could not be brought up by this motion, although the device was made after the injunction was issued, and the issuing a patent for it forbids the calling it a mere colorable device to avoid the patent of 0., without a hearing had and decision made upon that question.
Foster, Wentworth ct Foster, for plaintiff. E. H. Brown, for defendant. BENEDICT, D. J. This is a motion for an attachmem against the defendant to punish an alleged contempt in making and selling a certain form of lemon-squeezers, the making