The opinion of the court was delivered by: MOSCOWITZ
MOSCOWITZ, District Judge.
The bankrupt by his petition seeks to review the order of the Referee denying his application for discharge and sustaining the third, fourth and sixth specifications of objection, which are as follows:
"3.Upon information and belief, that within twelve months next preceding the filing of the voluntary petition in bankruptcy, the bankrupt above named, made a transfer of property to hinder, delay and defraud his creditors, to wit: the transfer of a automobile owned by him, to one Muriel Burns, for either no consideration or for an entirely inadequate consideration.
"4. Upon information and belief, that within twelve months next preceding the filing of the voluntary petition in bankruptcy, the bankrupt above named, made a transfer of property to hinder, delay and defraud his creditors, to wit: the transfer of one diamond and sapphire ring to Maxwell Peters, for either no consideration or for an entirely inadequate consideration."
"6. Upon information and belief, the bankrupt knowingly and fraudulently made a false oath in his statement of affairs filed in connection with the bankrupt's property, in that in answer to the question as to whether or not he transferred by property within one year next preceding the filing of the petition, he answered: 'none', whereas in truth and in fact, he did transfer property, to wit: an automobile and a diamond and sapphire ring."
No exceptions were filed to the specifications. A hearing was had upon the merits. This constituted a waiver by the bankrupt as to the form of the specifications of objection. See In re Ulrich, D.C., 18 F.Supp. 919, affirmed, 2 Cir., 95 F.2d 1018; Nix v. Sternberg, 8 Cir., 38 F.2d 611.
It is the bankrupt's claim that the Referee's order should be reversed upon the ground that the Referee has not found that the bankrupt made a transfer of property "with intent to" hinder, delay and defraud his creditors.
The applicable portion of Section 14 of the Bankruptcy Act, 11 U.S.C.A. § 32, relating to the question of discharge, is as follows:
"C. The court shall grant the discharge unless satisfied that the bankrupt has (1) committed an offense punishable by imprisonment as provided under this Act [title]; or * * *
"(4) At any time subsequent to the first day of the twelve months immediately preceding the filing of the petition in bankruptcy, transferred, removed, destroyed, or concealed, or permitted to be removed, destroyed, or concealed, any of his property, with intent to hinder, delay, or defraud his creditors; * * *".
The Referee should determine whether the transfer of property was made "with intent to" hinder, delay and defraud the bankrupt's creditors.
The sixth specification of objection relates to charges that the bankrupt knowingly and fraudulently made a false oath in his statement of affairs. This specification of objection has been sustained by the Referee. In discussing the sixth specification the Referee stated: "The sixth objection relates to the failure to list the transfer of the ring in the statement of affairs, where the automobile was likewise omitted. The only explanation of the bankrupt was that he did not realize the meaning or intent of the question in the statement of affairs calling for a listing of transfers, he did not think the sale of a second hand car to a young lady that he had known for a long time in charitable work or the sale of his ring to his brother was a transfer. That is unfortunate, but as I have held in a number of discharge proceedings, this statement of affairs is something which the Chandler Act provided for in the amendments of 1938, and it either is there to mean something or it is of the scrap of paper character, and the bankrupts must be held to strict responsibility for what they say in their statement of affairs, and the mere fact that the bankrupt did not understand the meaning of the words, while it is unfortunate, requires the sustaining of the objection. Objection sustained."
The Referee in his certificate of review states: "The question presented is whether the evidence is sufficient to support the finding of the Referee that the sale by the bankrupt of an automobile and ring owned by him constitutes a transfer of property in fraud of creditors and whether the bankrupt's failure to list the said transfer in Item 10 of his Statement of Affairs was knowingly and fraudulently made."
A statement of an untruth in the schedules or statement of affairs of the bankrupt unless made knowingly and fraudulently is not sufficient to deny a discharge. See Sharcoff v. Schieffelin & Co., 2 Cir., 70 F.2d 725; Willoughby v. Jamison, 8 Cir., 103 F.2d 821; In re Hefner, D.C., 23 F.Supp. 521. The question involved herein has been recently decided by the Circuit Court of ...