¶11. Bankruptcy (§ 409*) — 'Acts in Fraud or Creditors — Failure to Keep Account Books.
¶2Where the business of a bankrupt was that of mining promoter, not requiring elaborate accounts, and he had no employes and each of his mining deals was separate and complete in itself, and he relied entirely upon pocket memoranda, noting upon them the deposits and withdrawals from his bank account, having his bank book balanced each month, such records and memoranda were sufficient as respects the riglfts of his creditors ; they disclosing substantially the state of his financial affairs.
¶3[Ed. Note. — For other cases, see Bankruptcy, Dee. Dig. § 409.*]
¶42. Bankruptcy (§ 414*) — Fraudulent Transfers.
¶5Suspicious circumstances are not enough to show a fraudulent transfer ' of property by a bankrupt.
¶6[Ed. Note. — For other cases, see Bankruptcy, Dec. Dig. § 414.*]
¶7Appeal from the District Court of the United States for the Southern District of New York.
¶8In the matter of Oliver O. Howard, bankrupt. From an order denying a discharge, the bankrupt appeals.
¶9Reversed and remanded, with instructions to grant a discharge.
¶10The bankrupt petitioned for his discharge. Two creditors objected to the granting of the application and filed specifications charging in substance:
¶11(1) That the bankrupt with intent to conceal his financial condition failed to keep books of account.
¶12(2) That the bankrupt fraudulently transferred and concealed his assets and continued to conceal them up to the time of the bankruptcy.
¶13(3) That the bankrupt fraudulently transferred and concealed property within four months of the bankruptcy.
¶14(4) That the bankrupt made false oaths.
¶15The application and objections were referred to a special master, who personally heard the bankrupt, his wife, and another witness, and, by deposition, two other witnesses, and filed a report finding that the objecting creditors had failed to substantiate any of the specifications of objection and recommending that the discharge should be granted. †
¶16*400• The ^District Court heard' the question of granting the discharge upon the report of the special master; found that the first specification of objection was established, and denied the discharge.
¶17Rounds, Hatch, Dillingham & Debevoise (R. S. Rounds, of counsel), for appellant. • ■ ' ’ ' ■
¶18Blandy, Mooney-& Shipman (J. S. Frank and Arthur B. Williams, of counsel), for appellee.
¶19Before EACOMBE, WARD, and NOYES, Circuit Judges.
¶23We think that the special master was right in his opinion that the objecting creditors failed to substantiate their first specification of objection. The business of the bankrupt — that of a mining promoter — did not require any elaborate accounts. The records and memoranda which he kept seem to- have been sufficient to disclose substantially the, state of his financial affairs, and that was enough. In our opinion the- evidence was insufficient to warrant a finding that the failure to keep more complete records arose from any intention upon the part of the bankrupt to conceal his financial condition. Certainly 'we think the evidence would not warrant such a findl-ing in the face of the report of the special master who saw the bankrupt upon the stand and heard his testimony at length.
¶24- We also think that the. special master was right in his conclusions with respect to the other specifications of objection. It is true, ‘as pointed. out-by thé district judge, that the evidence concerning the transfer of the Mt. Shasta mining lease from the bankrupt to his wife was not altogether satisfactory. But suspicious circumstances are not enpugh to show a fraudulent transfer, and, assuming that the doctrine of continuóus concealment applies in the case of fraudulent transfers, vie' think' that the objecting creditors failed to substantiate their charges of the fraudulent concealment o.f assets and the making .of fáfsE’oa'ths, '
¶25)i'J_The',,Qtcler d.f the District Court, is"-reversed, with costs¿ and the cause remanded, with instructions to grant the bankrupt his discharge.