In re Perley

19 F. Cas. 255, 4 N.Y. Leg. Obs. 254

• Court: District Court, D. Maine
• Decided: May 19, 1846
• Status: Published

Opinion

WAKE, District Judge.

This ease has been heard on the objection of certain creditors to allowing a certificate of discharge The bankrupt has been examined, and a large volume of testimony taken on both sides. A preliminary question arose, and was discussed at the hearing, as to the admissibility of Edward Todd as a witness, who was called by the creditors and examined, subject to the objection. The objection is that he is a creditor, and excluded on the ground of interest. He is not a creditor in his own right, but only as executor of the last will of Allen Perley, the father of the bankrupt, who died June, 1843. The testator, by his will, devised to the bankrupt all the notes and other obligations he held against him. As executor of Allen Perley he is a creditor, and may prove his claim against the estate; and as a creditor he is also interested to defeat the discharge, and then he will be entitled not only to a dividend, but also his claim for the balance will be good against the bankrupt. But the will gives all these notes and obligations to the bankrupt; and therefore the executor, so far as he has an interest, has the same with the bankrupt himself. His interest, therefore, is against the party calling him, and it does not lie with the other party to make the objection, if he is willing to testify.

Several objections are made to the discharge, but that principally relied on is a fraudulent concealment of his property, in the hands in part of his father, and in part in the hands of his brother, Joseph Perley. 1 do not propose to go into a critical examination of the great mass of testimony in the case, but to state shortly the conclusion to which I have arrived.

I. With respect to property in the hands of Joseph Perley, his brother, it appears that he held two notes against Dwinal, and another some time before the bankrupt law was passed, and commenced a suit upon them in the name of Joseph, on which certain real estate in the city of Bangor was attached. Judgment was obtained, and the execution was levied on this property to the full value of the judgment obtained. It was not known to Joseph that any such suit was commenced, or that it was in his name, and the notes were the property of the bankrupt. Joseph, therefore, took them as trustee to the bankrupt, and would, by a court of equity, be declared to be such. He has, therefore, a right of property in the levy, which ought to have been disclosed. But it is said that he was indebted to -Joseph, and that the suit was brought in his name, in order that the judgment might be appropriated to the payment of this debt, and that these proceedings thus operated as an assignment of the property to Joseph. Without relying, in answer to this, on the fact that the suit on the notes was unknown to Joseph until after the levy, it is sufficient to say, that the debt of Joseph was, at- all events, less than the amount of the judgment or levy; and I think, on the evidence, less than one-quarter of the judgment. It cannot be construed as a gift to Joseph, for he had never accepted it, and it is not therefore analogous to the case. Ex parte Robinson, Law Rep. 307. And, moreover, it was never intended as a gift. It is plain enough, from the whole testimony, that the object of the bankrupt in bringing this suit in Joseph’s name was to conceal his own interest in the property. Here was, then, a valuable property, which ought to have been put in the schedule of his effects; and it appears to me impossible to doubt that the concealment of his interest was intentional. It is, therefore, in my opinion, a conclusive objection to the allowance of a certificate.

And then as to the six promissory notes, amounting to about $700, and two bonds for the conveyance of real estate charged to be in the hands of his father, as collateral security for a debt due on mortgage. My opinion on the whole evidence is, that these notes were not in the hands of his father at the time when he filed his petition in bankruptcy, but in his own hands, as his own property, and ought to have been put into his schedule. I do not choose to comment on the evidence touching this part of the case, for reasons which I trust will be understood by the counsel, but merely observe, that I am fully satisfied, from the whole evidence, that it was a willful concealment of the property, and is a bar to a certificate of discharge. Costs to be charged to the estate.