Page:Federal Reporter, 1st Series, Volume 7.djvu/866

 &54 FEDERAL BSPOSTEB. �sixth, that being a merchant he bas not, at any time since March 2, 1867, kept proper books of accotint; and the seventh, that he procured the proof of false and fictitious claims against his estate by Darius P. Merritt, Charles H. Merritt, and George W. Clark, and their assent to his dis- charge by promising to pay their claims. �The testimony is voluminous, and I have read the same with care, There is much in it which discloses a reckless and speculative spirit in the bankrupt, in his methods of transacting his business, but nothing that indicates perjury, dishonesty, or fraud. The sixth specification is the only one which has given me trouble. This bas reference to the bank- rupt as a merchant not keeping proper books of accounts, — the only provision in the law which hinders a discharge, irre- speetive of any question of fraudulent intent. It is my duty in oonsidering it simply to inquire into the fact, teaving the motives of the bankrupt out of the question altogether. It is provided by the seventh clause of section 5110 of the act that no bankrupt, being a merchant or tradesman, shall be discharged from his debts, who bas not at all times after March 2, 1867, kept proper books of account. �To bring the bankrupt within the penalty of the section he must be a merchant or tradesman. The business in which he was engaged previous to his bankruptcy was superintend- ing the running of the steamer Novelty, beginning in August, 1875, and ending the last of November, 1876, when the boat was wrecked and lost. The evidence is that his father pur- chased the steamer and permitted the bankrupt to have her control and management under the verbal agreement that he should pay all ranning expenses, and the costs of keeping the vessel in repair, and should hav6 one-half of the net earnings or profits for his compensation. During this ar- rangement a corporation was formed, called the Newark Transportation Company, The boat was put in at a valua- tion of $50,000, and 500 shares of capital stock were issued, at the par value of $100 per share, and distributed by the father to his wife and children according to his pleasure, the ��� �