In re Phillips

98 F. 844, 1900 U.S. Dist. LEXIS 323

• Court: District Court, S.D. New York
• Decided: January 16, 1900
• Status: Published

Opinion

BROWN, District Judge.

As respects the concealment of assets, the burden of proof is evidently upon the creditors to prove an “offense committed.” Notwithstanding the large disappearance of assets, the account given of the wastefulness before failure, of the losses on sales, and the looting by creditors at the time of the failure, constitutes a story that, however disgraceful, does so far explain the losses as to make it scarcely reasonable to find the bankrupts in the possession or control of any substantial assets at the time of this petition, some three years after the failure.

It is much the same as respects the books. The failure was too long before the passage of the bankruptcy act to malte reasonable the inference of any intentional concealment of the books “in contemplation of bankruptcy.” To sustain this charge, it must appear that the bankrupts at or about the time of the petition knew, or might ascertain, where the old books were, and that they were, therefore, privy to the nonproduction of them. The evidence, as it stands, does not warrant such a finding. It would seem that only an examination of Cohen, the bookkeeper, if he can be found, or of the creditors who were looting the bankrupts’ place of business at the time of failure, could furnish any clew to the disposition of the books. The burden of this too falls upon the creditors. If any further efforts in this direction are desired, the matter will be referred back to the referee for that purpose on application of the objecting creditors within 10 days. In default of their doing so, the discharge will be granted.