Siegel v. His Creditors
Before: Belcher
Synopsis
Insolvency — Discharge of Insolvent—Debt Created by Fraud.— The fact that a particular debt of an insolvent debtor was created by fraud is no ground for refusing a discharge from other debts.
Id.—Books of Account — Construction of Insolvent Act.—The purpose of section 49 of the Insolvent Act, providing that a final discharge in insolvency may be refused when the debtor has not kept proper books of account, is to require every merchant or tradesman to so keep his books that any competent person, by an examination of them, can ascertain and determine the real condition of his affairs; and if they are so kept, though imperfect, inartistic, and inaccurate in unimportant particulars, they will be treated as proper books of account, within such section.
Id. — Accounts of Outside Matters — Propriety of Books.—Though a trader should be held to the utmost good faith and reasonable care in keeping accounts of his business as such, yet he is not required to enter in his books accounts of outside matters; and the question whether his books were “proper ” or not is one to be determined in each particular case by the facts and circumstances there shown.
Id.—Accounts of Money Borrowed—■ Repayment — Discharge of Insolvent. — A discharge in insolvency should not be denied on the ground that the debtor failed to keep proper books of account, where the only fault found with the books is, that he did not keep in them, in the name of one of his creditors, an account of certain small sums of money borrowed from him, from time to time, during a period of eighteen months, and it does not appear that there ever were any other business transactions between the parties, and the small loans were paid back within two days, and the payments entered in the bank-book kept by the debtor in bis books.
Belcher, C. The respondent filed his petition in insolvency on the twenty-first" day of May, 1890, and- was thereupon adjudged to be an insolvent debtor. In due time he.applied to the court for a discharge from his debts, and two of his creditors, Walter M. Patrick and Jacoby Brothers, opposed the discharge. The specifications of the grounds of opposition, so far as they need be stated, were, that the respondent had been guilty of fraud, contrary to the true intent of the Insolvent Act, in that on the 5th of April, 1890, he, by false and fraudulent representations as to his financial standing, induced Patrick Brothers, the assignors of said Walter M. Patrick, to sell him certain goods, of the value of ninety-five dollars, on a four-months credit, which had not expired when he filed his petition in insolvency, and that he knew said representations to be false, and made them with the intent to deceive and defraud said Patrick Brothers; and also that respondent, for eighteen months prior to the filing of his petition in insolvency, was a retail dealer in boots and shoes, and did not during that time keep proper books of account.
After trial, the court found, upon the issues raised by the pleadings, among other things, that the respondent obtained from Patrick Brothers goods of the value of ninety-five dollars, on a four-months credit, as alleged, but that it was not such a fraud as would prevent [412]the granting him a discharge from his other debts; and also, that respondent was a retail dealer in boots and shoes for the period of eighteen months immediately preceding the filing of his petition in insolvency, and that during that period, from time to time, he borrowed from one Nathan Siegel sums of money, in the aggregate amounting to $1,205; that no one of the sums so borrowed amounted to more than seventy-five dollars, and that each of the said sums was borrowed for a short time, and was repaid within two days; that no account of the said loans was kept on his books in the name of Nathan Siegel, “ nor any account thereof, except that the items of cash paid out to the said Nathan Siegel in payment of said loans were entered in the bank account kept by said Myer Siegel on his books of said business”; that otherwise respondent kept proper books of account, and that his failure to enter on his books, to the particular account of Nathan Siegel, the said temporary loans, was not such a failure to keep proper books of account as would authorize the withholding the discharge.
A decree was accordingly entered discharging the respondent from all his debts, which, under the insolvent law of this state, were provable against his estate, and which existed on the twenty-first day of May, 1890, except the said debt of ninety-five dollars due to Patrick Brothers.
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