Page:Federal Reporter, 1st Series, Volume 1.djvu/826

 818 FBDEKAL BEPOBTEB. �bankruptcy, Belknap made entries in the books of the firm crediting Morris Ketohum with the amounts of the severai checks misapplied by him as aforesaid, and also entered upon the books of the firm, as of the date of July 24, 1878, a credit of Morris Ketchum "for sundry stocks and bonds, $26,822.50." It is not shown when these entries were made, except that they were in August, 1878, and before the filing of the petition in bankruptcy by Franklin M. Ketchum. In the schedule of debts annexed to his petition the bankrupt Ketchum included the foUowing as unsecured claims of Morris Ketchum : "Sales of sundry stocks and bonds belonging to said Morris Ketchum, and -which Ketchum & Belknap were unable to retum cred- ited at market value, on July 24, 1878, $26,822.60; interest to August 31, 1878, $198 19." "Balance of book account, receipts and payments of money on July 24, 1878, $8,549.21; interest to August 31, 1878, $63.16." Another unsecured claim of Morris Ketchum is included as to -which no question is raised, with the exception of the entries thus made in the books of the firm. �After the failure and the insertion of these items in this schedule of the firm debts, nothing was done by either part- ner, 80 far as the evidence shows, by way of adoption by the firm of these contested claims, nor was any account rendered by the firm to Morris Ketchum, or any agreement made be- tween him and the firm in respect to said moneys so received by the firm, or in respect to said securities, other than such as may be, if any, implied by law from the foregoing facts. Franklin M. Ketchum testified that, at the time he inserted these items in the schedule, he knew of the entries made in the books by Belknap, and he put these claims in the schedule because he believed the firm to be liable for the money and stocks to Morris Ketchum. It also appeared, by the evi- dence, that, at the time of making the schedule, Franklin M. Ketchum knew, by the confession of Belknap, that the money and the stocks had been wrongfuUy used by Belknap, and that the proceeds had gone into the bank account of the firm. Belknap drew from the firm bank account for his own use, and for the use of the firm, at ail times indiscriminately, and ��� �