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STRELLOW v. SCHLOSS.

(District Court, M. D. Pennsylvania.

December 21, 1906.)

No. 83.

Bankruptcy — Insolvency—Liability oj Bankrupt tor Debts op Business Conducted in His Nahe.

One Sehloss, an alleged bankrupt, was the manager and apparent head of a store conducted under the name of the “Sehloss Department Store,” and goods wore ordered for and came shipped to it in that name. Ho had printed and used billheads with that name upon them, kept the bank account of the business in his own name, and on one occasion made a statement showing his financial condition when, ordering goods for the store. Held, that .he could not avoid liability for the debts contracted in the business on the ground that another was the real party in interest, and he was merely an employé, where such fact was not stated to nor known by the «’editors, nor defeat bankruptcy proceedings on the claim of solvency where the concern was insolvent.

In Bankruptcy. On rule for new trial.

R. R. Grambs and R. W. Rymer, for the rule.

Edward W. Thayer, opposed.

ARCHBARD, District Judge.

The respondent contests the proceedings, and asserts his solvency, and this was the issue tried. It depends upon whether he is personally liable for the merchandise which went into the store at Clarks Summit, Pa., of which he was the apparent head. He claims not to be, because he was merely a manager of the store, without any interest beyond his salary, and that, so far as it is made to seem otherwise, he was the dupe of Okell, who imposed upon his inexperience and used him for his own ends. The jury apparently believed this and found in his favor, but unfortunately it is not sustained by the evidence, or there are at least other things which control. Upon his own admission he knew that the store was run as the “Sehloss Department Store,” and that goods were ordered for and came shipped to it in that name. This could refer to no one but himself, and he thus gave it the sanction of his name. It is undisputed, also, that he used letter and billheads in the business of the store with this designation on them, the bill for printing which he acknowledged as his own; that a bank account was opened and carried on in his own individual name, in which the money received from the sae of goods was deposited, and on which he drew checks to pay for things that went into the store. It was also clearly shown that in one instance at least, when in New York ordering goods, he made a detailed statement with regard to his financial standing, the only possible occasion for which was that he was the owner of the store.

It is of no avail against this that, as he says, he protested to Okell when goods came charged to him individually. He did not send them back, neither did he take pains to repudiate the other use of his name. And even if it be accepted as evidence that Okell was the real party in interest, that goods which were shipped to the store were diverted,unopened and in bu’k to the place which Okell had opened at Carbondale, it was not only with the knowledge and connivance of Sehloss, but by *908his active assistance, that this was done. And the same is true with regard to the goods that were carted down to Scranton. Combining and conspiring with Okell, in this way, to cheat and defraud the creditors of the Clarks Summit store, as he confessedly did, instead of relieving him from liability, it all the more fastens it upon him, and he is fortunate to escape simply with civil responsibilty.

Taking this view of the case, as I am compelled to do, it would be a travesty on justice to let the verdict stand, and the rule for a new trial is made absolute.

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