151 FEDERAL REPORTER.

on the southerly side of pier No. 3 of the Bush Terminal Company on the Brooklyn side of New York Bay, on the 14th of May, 1906. The tug was returning from sea with a light mud scow, which she was towing on a hawser astern at the rate of 4 or 5 miles per hour to anchorage off the Terminal Company's property. The tide was flood and the tug master's intention was to shortly turn the tow so as to leave the scow at anchor headed to the tide, and with that view had ported his helm slightly in order to make a sweep for that purpose, when he became unconscious and fell on the floor near the wheel. The tug being then without a guiding hand turned too much to the starboard and shortly collided with the stern of the steamer, doing some damage to her rudder, &c. The defence is inevitable accident.

The collision having occurred while the steamer was lying motionless at a pier, the burden was upon the tug to establish a defence and she puts forward the said plea.

There can be little doubt that the master was ordinarily a competent man, not subject to such attacks, which his physician termed "Cerebral vertigo with unconsciousness from gastric disturbances." This was the first attack he had had and it could not have been anticipated. As far as the master is concerned, the claimant may be regarded as having established a defence but it is strongly urged that it cannot prevail because the tug is liable by reason of not having a lookout. by the claimant that the fact of there having been no lookout is imIt is urged material, the proximate cause of the accident having been the master's sudden illness, citing Laidlaw v. Sage, 158 N. Y. 73, 98, 52 N. E. 679, 44 L. R. A. 216. There are some expressions in that celebrated case favorable to the claimant's contention. The syllabus there contained the following:

"The evidence in an action for a personal injury, in which the plaintiff' claimed that the defendant, on being suddenly threatened with an explosion of dynamite by a third party, moved the plaintiff's position to protect himself and thus increased the plaintiff's exposure to injury from the explosion which immediately followed, reviewed and found not sufficient to justify the trial court in refusing to direct a verdict for the defendant, or in submitting to the jury the question of the defendant's liability-it appearing that there was not sufficient evidence that the defendant performed any act or was guilty of any omission which rendered him even technically liable to the plaintiff, and it being held that, even if there was evidence of a technical liability, the proof was not sufficient to justify the submission to the jury of the question of substantial damages, and that the alleged acts of the defendant were not the proximate cause of the plaintiff's injury."

It is doubtless true that the accident would not have happened if the wheelsman had not fainted and in that sense his disability was the proximate cause of the accident but a lookout is legally required on all navigating vessels capable of injuring others, and I think there can be no doubt that if a competent one had been properly stationed on this vessel, he would have noticed the absence of proper steering and corrected the same or had the engineer stop the engine and reverse, if necessary. The engineer himself noticed the trouble before the collision and endeavored to avoid it by stopping and reversing the engine but was too late in his action.

The tug did not claim to have a lookout and was unquestionably

negligent in failing to have some one to act in that capacity. It is provided by article 29 of the act of Congress approved June 7, 1897 (30 Stat. 102, c. 4), as follows:

"Art. 29. Nothing in these rules shall exonerate any vessel, or the owner or master or crew thereof, from the consequences of any neglect to carry lights or signals, or of any neglect to keep a proper lookout, or of the neglect of any precaution which may be required by the ordinary practice of seamen, or by the special circumstances of the case."

It seems to me to be clear that this accident happened from the neglect of the tug to have a proper lookout.

Decree for the libellant, with an order of reference.

In re KNASZAK.

(District Court, W. D. New York. February 8, 1907.)
No. 1,342.

1. BANKRUPTCY-HEARING BEFORE SPECIAL MASTER-RULINGS.

It is the duty of a special master to whom has been referred a bankrupt's petition for discharge and specifications of objection thereto, to take and report all testimony offered with his rulings as to its admissibility, and he may properly reserve such rulings if they are made in time to enable the parties to reserve exceptions.

2. SAME-DISCHARGE-AMENDMENT OF SPECIFICATIONS OF OBJECTION.

An opposing creditor may amend his specifications of objection to a bankrupt's discharge by supplying allegations that the acts relied upon were knowingly and fraudulently committed by the bankrupt at any time before the evidence is closed.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 6, Bankruptcy, § 716.] 3. SAME-RIGHT TO DISCHARGE-VIOLATION OF ACT.

Findings of a special master, based on conflicting evidence, that a bankrupt had concealed property and made false oath with intent to defraud his creditors, which debarred him from the right to a discharge, affirmed.

In Bankruptcy. On application for discharge.

M. W. Casey, for bankrupt.

Charles Newton, for objecting creditor.

HAZEL, District Judge. The questions presented to the court for decision arise upon the application of the bankrupt to set aside the report and findings of William H. Hotchkiss, special master, to whom the petition for discharge and specifications of objections thereto were referred, and for an order discharging the bankrupt upon exceptions to the report duly filed.

It was not error for the special master to have reserved decision as to the admissibility of the testimony under the insufficient specifications. His duty was to take and report the evidence in aid of this court, and return the same, together with the rulings as to its admissibility. In re Lipset (D. C.) 119 Fed. 379. His tentative rulings do not appear to have been prejudicial to the bankrupt, especially as the objections were passed upon before the close of the case and exception reserved to him. At the hearing, counsel for the bankrupt repeatedly insisted that a decision be made upon his preliminary objection to the specifications but

he did not take advantage of rule 12 of the bankruptcy rules for this district, which plainly indicates the practice in this jurisdiction, as applied to a defective or insufficient specification filed in opposition to the bankrupt's discharge. The rule substantially states that upon notice. to the opposing creditor the specifications may be made more definite and certain by the court, or the bankrupt may demur to them or move their dismissal, and in default thereof such specifications shall be deemed sufficient to present the question Suggested thereby. But, irrespective of this rule, the omission by the opposing creditor to allege that the acts complained of were knowingly and fraudulently committed by the bankrupt was seasonably supplied by amendment before the evidence was closed. In re Pierce (D. C.) 103 Fed. 64; In re Bemis (D. C.) 104 Fed. 672. This court undoubtedly had the right to amend the specifications at any stage of the case. It has even been held that under certain circumstances they may be amended to conform to the proofs. In re Lesser (D. C.) 108 Fed. 205.

The objection that the deposition of the bankrupt was not authenticated, and that after transcription it was not read over to him or signed. by him is unavailing, because the objection was not sufficiently specific. If it had been, doubtless the stenographer or person taking the testimony would have been sworn to show that such testimony was correctly taken and transcribed, and if that had been done the signing of the testimony would have been unnecessary. In re Bard (D. C.) 108 Fed. 208.

Numerous other objections were urged, but they require no special attention. The record does not show that any injustice or prejudice. has resulted to the bankrupt. He had ample opportunity to give testimony in his own behalf and explain the assertions and claims of the objecting creditor, but he did not avail himself of his legal rights in that regard. He relied upon his asseveration that the special master was without power to receive and consider any evidence under the original specifications, on the ground that they were insufficient. The point is suggested that, as the bankrupt was not cross-examined, his direct testimony could not be used against him. He was not deprived of being sworn in his own behalf, but he practically declined to do so, and he has not applied to this court for leave to give additional testimony. The facts elicited before the master justify the findings that the bankrupt offended against the provisions of the bankrupt act in that he concealed his property and made false oath with intention to defraud his creditors. As such facts are fully stated in the report of the master, it will not be necessary to repeat them. They are based on conflicting testimony, and, in their ascertainment, much depended upon the credibility of the bankrupt. The master was of opinion that no reliance whatever could be given to such of the bankrupt's testimony as was before him. In these circumstances, the record containing other credible evidence to sustain the specifications, the findings of the special master should not be disturbed.

The petition for discharge must be denied.

In re SCHAFER.

(District Court, E. D. Pennsylvania. February 20, 1907.)

No. 2,404.

BANKRUPTCY-EXEMPTIONS-FORFEITURE BY FRAUD.

In Pennsylvania a bankrupt who deliberately and willfully conceals or denies the ownership of property to prevent it from being subjected to the payment of his debts forfeits his right to any exemption under the state law.

In Bankruptcy. On certificate from referee.

Charles S. Wood, for the bankrupt.

Charles L. Smyth, for objecting creditor.

J. B. MCPHERSON, District Judge. The referee to whom this case was referred (Richard S. Hunter, Esq.) refused to allow the bankrupt's exemption for reasons set forth in the following opinion:

"The bankrupt was sworn at the first meeting, and testified that his petition in bankruptcy contained a full, true, and accurate account of all his assets. To the question, 'You have no other property in existence other than what has been specified in your schedule,' he replied, 'No.' When examined by counsel for a creditor he testified that he owned a building lot at Glenside for which he had paid $500. Counsel asked, 'Why is it omitted from the schedule? He replied, 'I do not know why.' The referee then asked the witness, 'Why didn't you include this lot in your schedule?' to which he replied, 'I will be honest and true with you. It is the last thing in the world I have got. It was the only thing I had for my family, and I tried to save it.' "Upon this state of facts, it is argued by counsel for a creditor that the bankrupt's exemption should not be allowed, and in support of this contention is quoted In re Imhoff's Appeal, 119 Pa. 350, 13 Atl. 279. In that case the debtor falsely stated to the sheriff, who was about to levy on certain personal property claimed by his wife, that the property referred to had been shipped to New York, and that the debtor had no goods in the county. The property thus fraudulently withdrawn from the execution included goods of some value purchased by the debtor himself. He thus falsely increased his claim on the fund realized from the real estate to the extent of the value of the said goods. The court decided that, under the circumstances, he was not entitled to the balance of his exemption. The rule as stated in Strouse v. Becker, 38 Pa. 190, 80 Am. Dec. 474, was affirmed. In that case it is said by Justice Woodward, "The debtor should exhibit his property honestly, and claim only the exemption which the law allows him * But if he equivocate

and dissemble, denies the ownership of that which he cannot hide, and embarrasses the officer of the law in the execution of his duties, he forfeits not only his self-respect, but his hold upon the exemption provided for honest debtors.'

"Section 6 of the bankrupt act, Act July 1, 1898, 30 Stat. 548 [U. S. Comp. St. 1901, p. 3424], enacts that this act shall not affect the allowance to bankrupts of the exemptions which are prescribed by the state laws. No exemption is allowed by the act other than that which is in force in the state of the bankrupt's domicile, and the hardship which undoubtedly results to the bankrupt's family from the loss of his exemption must have been considered and passed upon by the Pennsylvania courts.

"The referee is constrained by the authorities presented to decide that the bankrupt, under the circumstances of the case, is not entitled to claim his exemption."

Upon exceptions to this finding, the referee said further:

"Counsel for the bankrupt, in addition to his verbal argument before the referee, has submitted a careful and exhaustive brief of cases from the Bank

ruptcy Reports, which shows that in Wisconsin, Arkansas, Georgia, and Ohio, where the bankrupt either had committed a fraud against the act or was under strong suspicion of so doing, his exemption was nevertheless allowed. In the absence of Pennsylvania cases these decisions would be strongly persuasive. But the Pennsylvania rulings leave no doubt.

"The referee has before said that under section 6 of the act, the allowance to bankrupts of the exemptions which are prescribed by the state laws is not affected. We are therefore remanded to a consideration of the Pennsylvania cases, which have already been cited by the referee, and which clearly hold that a debtor making a false statement to the officers of the law with regard to his property is not entitled to his exemption.

"Two cases have recently arisen in the bankruptcy courts having jurisdiction in Pennsylvania. The first is In re Duffy, 9 Am. Bavkr. Rep. 358, 118 Fed. 926, where Judge Archbald decides that in the case before him the bankrupt had not been so proved guilty of fraud as to bar him from his exemption. With regard to the merits,' says the learned judge, 'it is no doubt true, as decided in Imhoff's Appeal, 119 Pa. 353, 13 Atl. 279, and as recently enforced in this court (In re Yost, 9 Am. Bankr. Rep. 153, 117 Fed. 792), that one who is guilty of the fraudulent disposition of his property forfeits his right to the exemption, to which he would be otherwise entitled; but I cannot see that the bankrupt is convicted of this in the present instance. An examination of this case shows that it turned entirely upon the point that the evidence did not establish the charge of fraud.

"The most recent decision is that of the learned junior judge of this district, in the matter of Leo Alex, 15 Am. Bankr. Rep. 450, 141 Fed. 483. The referee found that the conduct of the bankrupt was fraudulent, and denied his exemption. Upon appeal, Judge Holland said, "The findings of fact by the referee in this case are approved, and we agree with his conclusion that the bankrupt was not entitled to have property to the amount of $300 set aside for his use.'

"In the case now before the referee there is no question of the fraud, which was admitted in open court, and the decision last cited is therefore absolutely binding upon the referee.

"The referee sees no reason to alter his finding that the bankrupt, under the circumstances of the case, is not entitled to claim his exemption."

Upon the facts thus found by the referee, I am unable to agree with the argument of the bankrupt's counsel that the conclusion should have been different under the Pennsylvania decisions. The authorities cited by the referee to which may be added Kreider's Estate, 135 Pa. 578, 19 Atl. 1073; Riley v. Ogden, 185 Pa. 509, 40 Atl. 76; and Frank v. Kurtz, 4 Pa. Super. Ct. 234-show conclusively that, in this state, if at debtor deliberately and willfully conceals, or denies the ownership of property, in order to prevent it from being subjected to the payment. of his debts, he forfeits thereby his claim to exemption; and the question, therefore, in every case. is a question of fact whether or not the intention to conceal, or otherwise to defraud, is fairly established by the evidence. I have read all the testimony in the case upon this point, and I see no escape from the conclusion that such a deliberate and willful intention was established. When it is further considered, that the referee had the witness before him, and enjoyed the opportunity of seeing and hearing him testify, it seems to me impossible to set aside the referee's finding upon the ground that he was mistaken.

The order of the referee must therefore be affirmed.