Croonborg v. Rubovits

268 F. 352, 1920 U.S. App. LEXIS 2318

• Court: Court of Appeals for the Seventh Circuit
• Decided: June 29, 1920
• Docket: No. 2759
• Status: Published

Opinion

EVAN A. EVANS, Circuit Judge.

Is the bankrupt, Croonborg, entitled to an order discharging him from his debts ? This issue was referred to a special master, who, after a full hearing, recommended a discharge. A further reference resulted in a confirmation of this recommendation. The District Judge, however, sustained the exceptions and denied the application.

The issue, reduced to its last analysis, is one of credibility. Bankrupt, who failed to schedule the property belonging to “Croonborg Fashion Co., Ltd.,” and the “Croonhorg Academy,”, insists that he was but the manager of the business — his wife «being the proprietor, she succeeding a partnership composed of herself and one Sauter. Much of the testimony is irreconcilable. Croonborg’s and his wife’s statements are disputed by one Sauter, a creditor and a former partner. Sauter’s testimony is disputed in turn by the written agreement between himself and Mrs. Croonborg, creating -the partnership between them, and by his later written assignment of his interest in the partnership to Mrs. Croonborg. These agreements, made some two years before any bankruptcy proceedings were instituted, are rather persuasive evidence of the truthfulness of bankrupt’s story.

But more persuasive is the sworn statement appearing in the “Croon-borg Gazette of Fashion,” the publication of which represented the business of the Croonborg Fashion Company. This publication passed through the mails as second-class matter, and an affidavit of ownership was required hy the postal authorities. Bankrupt, as manager, made the affidavits which covered a period of several years prior to the commencement of bankruptcy proceedings. Mrs. Croonborg and Sauter were named as owners in 1913 and 1914, and thereafter Mrs. Croon-borg was designated therein as the sole owner. This statement corroborates the oral testimony of bankrupt and his wife, and is in turn corroborated by the written agreements heretofore referred to. Made under such circumstances, safeguarded by penalties which the maker of the affidavit would not readily invoke, we think these affidavits were entitled to great weight, and furnished the master with ample grounds for his conclusions.

It is hardly necessary to discuss the evidence further. Numerous facts appear that are not creditable to the bankrupt. But upon the issue before us we arc not able to agree with the learned District Judge that the special master was wrong in his conclusions. Aided as lie was by the presence of the parties and their witnesses, whose conduct and appearance on the witness stand must have influenced him in reaching” his conclusion, we must recognize that he was in a better position than we to ascertain the truth. In re Matthews, Bankrupt, 257 Fed. 292, 168 C. C. A. 376.

The order is reversed, with directions to enter an order granting bankrupt a discharge.