ciples regulating the exercise by this court of its jurisdiction in equity to enter, on the case as made by the bill, any decree against the surety. Leave will be granted to the complainant to amend his bill on or before the first Monday in June next by striking out The Equitable Guarantee and Trust Company as a party defendant; and in case the bill shall be so amended the demurrers will be overruled and the remaining defendants required to answer by the first Monday in July next, with the right by answer to claim and take the same advantage which they might otherwise have secured by demurrer. In case the bill shall not be so amended, the same will be dismissed with costs, but without prejudice.

In re GIFT.

(District Court, M. D. Pennsylvania. April 23, 1904.)

No. 340.

1. BANKRUPTCY-OBJECTIONS TO DISCHARGE-AMENDMENT.

A specification of objections to a bankrupt's discharge is in the nature of a pleading setting up matters of fact, and is required to be verified, but, being a matter of form, a verification may be supplied by amendment.

2. SAME.

An amendment of objections to the discharge of a bankrupt in matter of substance is only allowable (after the time within which objections are required to be filed) where the amendment is no more than an amplification, by the supplying of details, of charges which are substantially stated in the original.

3. SAME-GROUNDS-FRAUDULENT TRANSFER OF PROPERTY.

Specifications of objection to the discharge of a bankrupt, alleging that, within four months prior to the filing of his petition, in contemplation of bankruptcy, and with intent to defraud his creditors, he purchased certain household goods specified, which he transferred to a woman to whom he expected to be, and was afterward, married, and which were not included in his schedules, are legally sufficient, under Bankr. Act, § 4b (Act Feb. 5, 1903, c. 487, 32 Stat. 797 [U. S. Comp. St. Supp. 1903, p. 411]), as amended, which does not require an allegation in such case that the transfer was "knowingly and fraudulently" made, as is the case where the act charged is an offense punishable by imprisonment.

In Bankruptcy. On certificate from referee.

Charles P. Ulrich, for excepting creditors.
Charles M. Clement, for bankrupt.

ARCHBALD, District Judge. On February 26, 1904, within the time limited by the law, the First National Bank of Beaver Springs, a creditor of the bankrupt, filed the following objection to his discharge:

"That, at or about the time said bankrupt was preparing and arranging to file his petition in bankruptcy, he purchased household goods worth about $200, and transferred said goods to his wife as a gift, thereby removing or concealing property with intent to hinder, delay, and defraud his creditors, and that said household goods thus given by said bankrupt to his wife were not scheduled by him as assets of his estate."

1. As to right to reverify, see In re Vastbinder, 126 Fed. 417.

The paper was signed in the name of the bank by the president, but was not verified, and exception has been taken to it on that ground. It is also claimed that it does not state with sufficient definiteness the ground of objection to the discharge, nor bring it within the law. Upon this the creditor moves to amend by filing properly verified specifications charging, in substance:

"That on or about June 26, 1903, the bankrupt purchased of certain parties -naming them-goods and merchandise of the value of $115.11, to wit, 75 yards of ingrain carpet; 30 yards of Brussells carpet; six Brussells rugs; a dozen and a half of window shades; four large and three smaller pictures; two tubs; one mirror; half a dozen knives and forks, a dozen teaspoons, and a dozen tablespoons, all of Rogers' silverware; a silver butter knife and a silver sugar shell; a clock; and 25 yards of stair carpet. That these goods were directed by the bankrupt to be shipped to Northumberland, Pa., where they were received by him, although his residence at the time was elsewhere, and were given by him to his present wife, to whom he had not yet been married, but was about to be, knowing at the time that he was insolvent, and being about to go into bankruptcy; thus knowingly and fraudulently transferring the said goods with intent to hinder, delay, and defraud his creditors; the said goods having since that time been in the joint control, use, and enjoyment of the bankrupt and his wife, and not having been included in the schedule of his assets. Also that within four months of filing his petition he bad similarly purchased of other parties who are named household furniture, unspecified, of the value of $110.88, which he also gave to his wife, at or about the same time, with similar fraudulent purpose."

The question is whether this amendment should be allowed.

All pleadings setting up matters of fact are required by the bankruptcy act to be verified. Act July 1, 1898, c. 541, § 18c, 30 Stat. 551 [U. S. Comp. St. 1901, p. 3429]. And objections to a discharge, according to the better opinion, being of that nature, should be made under oath (Collier's Bankruptcy, 161; Brandenburg's Bankruptcy, § 348; In re Brown, 7 Am. Bankr. R. 252, 112 Fed. 49; In re Baerncopf, 9 Am. Bankr. R. 133, 117 Fed. 975; In re Glass, 9 Am. Bankr. R. 391, 119 Fed. 509), although, as pointed out in In re Jamieson, 9 Am. Bankr. R. 681, 120 Fed. 697, where it is held to be unnecessary, none is provided for in the form promulgated by the Supreme Court. Collier, 639, Form 58. The right to supply a verification where it has been omitted would therefore seem to be undoubted; it being, at best, a matter of form only.

But an amendment in matter of substance is considerably different, and, after the time within which objections are required to be filed, is only allowable where there is already of record sufficient to justify it. In re Mercur, 8 Am. Bankr. R. 275 (D. C.) 116 Fed. 655; Id., 10 Am. Bankr. R. 505, 122 Fed. 384, 58 C. C. A. 472. The specifications as amended must merely amount to an enlargement of the original, and, if they exceed this, they are not entitled to come in. The question in the present instance is whether or not they do.

In the original objection given above, the charge made against the bankrupt, in substance, is that he had concealed certain of his property with intent to defraud his creditors, to wit, by purchasing household goods when in contemplation of bankruptcy, and transferring them as a gift to his prospective wife, omitting them subsequently from his schedules when he came to file his petition. In the specifications sought to be filed as an amendment the date of the purchases is given, the

parties from whom they were made, the particular goods referred to, and the means taken to remove or conceal, or, as it is now charged, to transfer them; repeating the allegation that the gift or transfer was made in contemplation of bankruptcy, with intent to defraud creditors. There is a slight variance in the charge, as it will be noted, concealment in the one case, and a fraudulent transfer in the other, being alleged; but the facts are the same, whatever character is ascribed to them, so that it is not material. Neither is the added suggestion that the bankrupt was at the time insolvent. Notwithstanding the criticism made upon these proposed changes, the amendment as a whole is, as it seems to me, a mere amplification of what had preceded it, and is therefore to be allowed. It simply presents in detail that which had been previously stated in outline, and, the object being to give notice to the bankrupt of what he has to meet and defend, he had that effectively by the original; the specifications as amended merely presenting it in fuller form.

It is urged, however, that even as restated the specifications are not legally sufficient, but this cannot be successfully maintained. amendment of 1903 (Act Feb. 5, 1903, c. 487, § 4b, 32 Stat. 797 [U. S. Comp. St. Supp. 1903, p. 411]) the transfer or concealment of property at any time within four months prior to the filing of the petition, with intent to hinder, delay, or defraud creditors, is in so many words made a ground for withholding a discharge, and that is the basis of the opposition here. The argument that the transfer or concealment must be charged to have been knowingly and fraudulently made confuses the decisions based on the objection that there has been a false oath, and has no application here. The further suggestion is made that the alleged fraudulent disposition and concealment of property was nothing more than a purchase of goods with which to start housekeeping, taking the form of a wedding present to his wife; but this goes into the facts, which are not before me, and, even if that were the case, I am not prepared to say, if the intent was there, that it might not amount to a fraud.

The amended specifications are allowed.

TROY WAGON WORKS v. VASTBINDER.

(District Court, M. D. Pennsylvania. May 19, 1904.)

No. 366.

1. BANKRUPTCY-ACT OF BANKRUPTCY-EVIDENCE.

On an issue as to the commission of an act of bankruptcy by transferring notes with intent to give a preference, statements in the contract under which goods were furnished to the alleged bankrupt that he took the same for sale on commission, the notes to belong to the party to whom they were transferred, are not conclusive where the whole contract, taken together, shows that defendant became obligated to pay the invoice price of the goods, and the notes were taken in his name and indorsed by him. 2. SAME INVOLUNTARY PROCEEDINGS-ISSUES.

Where the act of bankruptcy charged in an involuntary petition was the giving of a preference while insolvent, a denial in the answer that de fendant committed such act of bankruptcy must be construed as a denial

of insolvency, at least where it has been so accepted by the petitioners and evidence taken on the issue.

8. SAME-PROOF OF INSOLVENCY.

Evidence examined, and held insufficient to show insolvency at the time of the commission of the act of bankruptcy alleged.

In Bankruptcy. Involuntary proceedings. Hearing on petition, answer, and proofs. See In re Vastbinder, 126 Fed. 417.

N. H. Ryan and E. H. Owlett, for petitioners.
David Cameron, for respondent.

ARCHBALD, District Judge. These are involuntary proceedings begun by creditors, the only act of bankruptcy sufficiently charged being that the respondent, within four months next preceding the filing of the petition, transferred, while insolvent, good and collectible promissory notes, to the value of $500, to Charles H. Childs & Co., with intent to prefer them above his other creditors. The respondent contests the proceedings, and denies that he made any such transfer of notes "then held and owned by him"-an argumentative denial, as will appear by the sequel-or that he transferred any such notes with intent to create a preference. He also declares, in general terms, that he did not "at any time commit any act of bankruptcy alleged in the petition." It is, however, the conceded fact that, within a short time prior to the institution of the proceedings, he did transfer to Childs & Co. a number of promissory notes for the purpose of closing his account with them, and, whether this was done with the express intent of preferring them or not, it had that effect, and must be presumed, if the notes were his, to have been so intended. The transfer is sought to be justified on the ground that the existing relation between the parties was one of agency only, the respondent merely taking the goods to sell on account, and turning over the proceeds after deducting his commission. Written orders on Childs & Co. are produced to verify this, signed by the respondent, in which he declares that he so receives and holds them; but this is materially qualified by the other evidence, and the court will go behind mere forms to get at the real transaction. Indeed, the orders themselves-aside from the fine print at the bottom-bear on their face the proof that they represent actual purchases, and not consignments. The goods are disposed of to the respondent for a specific price, and on definite terms of credit, with provision on most of them for a discount if paid within a certain time. And while it may be true, as stated by the respondent, that he was only required to pay for each lot as fast as he disposed of it, accounting to Childs & Co. for whatever he received in the way of notes or other securities, yet in making sales he did so in his own name, and was held directly responsible, the securities obtained being taken to himself personally, and guarantied by him when they were turned over. His obligations to Childs & Co. were plainly regarded as a debt, and he so speaks of them in his testimony. There are too many indicia in this of an ordinary purchase to warrant the conclusion that anything else was in fact intended. Childs & Co. must therefore be held to be creditors like the rest, and the notes, which he turned over to them, his own, notwithstanding his assertion to the contrary in his answer.

But it is essential to a preference that the debtor should have been insolvent at the time, and unless this appears there is no act of bankruptcy. It is claimed, however, by the petitioners that insolvency is not denied in the answer, and that it is not therefore put in issue. It must be confessed that the answer in this respect is not all that could be wished for, and that the denial of insolvency, at best, is inferential. It is to be found, if at all, in the general averment that no act of bankruptcy such as is charged has been committed. This, argumentatively at least, is a denial of whatever enters into the act relied on, including in the present instance the insolvency of the respondent. The petitioners evidently so regarded it, for they went on and took extended proofs on the subject, to which the respondent on his part made reply, and, the issue having been accepted in this way, it hardly lies in their mouth to now question it when the case is before the court upon the merits.

There is a wide difference between counsel as to the extent of the respondent's indebtedness at the time of the alleged preference as shown by the evidence; but while neither side has worked it out exactly right, it by no means amounts to what is claimed for it on the part of the petitioners. On the contrary, a careful examination of the evidence has convinced me, that, disallowing the $479 paid to the Troy Wagon Works, which evidently went to meet a bill not now brought forward, and including an estimated indebtedness to Childs & Co., still remaining, of $200 or $300, the most that can be figured is $3,500 in round numbers. On the other side of the account, as available assets to meet these liabilities, are, first, the respondent's stock of farming implements, valued at $3,000 to $3,500, outside the goods obtained from Childs & Co., which must be counted in, and amount to some $200 or $300 more; next, the leases and securities turned over to Mr. Broughton to collect for the benefit of creditors, which have a conceded value of $1,000, on a face value of $4,000; and, besides this, the property at Elmira, which was put in the hands of D. R. Thomas for sale, worth $1,500 or $1,600; making an aggregate of from $5,700 to $6,400 in all. On the highest of these estimates, which is not extravagant, there is at margin of $2,900 above liabilities, and on the lowest there is $2,200, the respondent being clearly solvent whichever one is taken. And even if the property at Elmira be thrown out, on the ground that it had been put out of his hands by the respondent for the purpose of defrauding creditors of which I am far from persuaded-enough would still remain to produce the same result.

It will be noticed that this consideration of the case is based upon the evidence produced, without regard to who has the burden. It is claimed that it was upon the petitioners, on the ground that the respondent appeared at the hearing with his books and papers and submitted to an examination, fulfilling the requirements of the law, which thereupon relieved him from proving his solvency. But, on the other hand, it is said that the production was not voluntary, having been enforced by a subpoena duces tecum and the order of the referee, and that the respondent is not therefore entitled to the benefit otherwise to be accorded. it. Also, that he was not frank in his disclosures, and that only after the closest inquiry, and at the very end of his examination, did he tell anything about the securities which he had put in the hands of Mr.