and definitely, or so pleading as to show definitely and certainly whether this is an action at law or one in equity, and whether plaintiff demands or intends to demand relief in equity on the ground defendant has obtained money which equitably belongs to and should be paid to the plaintiff as assets of the estate of one Dennis Sullivan now deceased, or claims damages for money had and received and to which plaintiff is entitled, and also requiring plaintiff to elect whether she will proceed upon the present complaint as one to recover damages as in an action at law or as one for relief in equity, and also to elect whether she relies upon a cause of action in tort or one on contract, or one for damages based on the fraudulent representations set out in the complaint, or upon a cause of action for slander by reason of the alleged false representations set out in the complaint, and also that the complaint be made more definite and certain by stating what false statements and representations were made by the defendant, and what false statements and representations were made by others.

Edgar T. Brackett, of Saratoga Springs, N. Y., for plaintiff.
Rushmore, Bisbee & Stern, of New York City, for defendant.

RAY, District Judge (after stating the facts as above). The plaintiff in her brief filed on this motion by her attorney says:

"The action is one at law to recover for deceit. The complaint alleges, among other things, false representations made to the plaintiff, through and by means of which she was induced to sign waivers and a receipt in full for her interest in the estate. The things necessary to be pleaded in an action for deceit are: (1) Representations. (2) Falsity. (3) Scienter on the part of the defendant. (4) Reliance. (5) Damage.

"Under all the cases, a complaint that sets out these several facts sets out a good cause of action. Brackett v. Griswold, 112 N. Y. 454-467. A cloud of cases could be cited to the proposition. The prayer for relief is a prayer for damages only-no equitable relief being asked. While the language of the prayer does not, of necessity, characterize the complaint as either legal or equitable, it is a persuasive factor in determining the question. There was no occasion for the motion of the defendant. The complaint speaks clearly and truly what the plaintiff wishes. The motion should be denied. "Saratoga Springs, N. Y., September 26, 1917.

"Edgar T. Brackett, Attorney for the Plaintiff.

"City Hall, Saratoga Springs, N. Y."

[1] This, is seems to me, should be regarded by the court as an election by plaintiff to regard this action and have it treated by the court as an action at law to recover damages for deceit, and not as an action in equity or one seeking equitable relief. It is informal, and perhaps not binding in subsequent proceedings, and I think the plaintiff should file a formal election to the effect stated in the plaintiff's brief. This will set that matter at rest, and enable the defendant to test the sufficiency of the complaint as one in an action at law. The propriety of and necessity for requiring such an election, when the pleading is at all equivocal in this regard, is plain, inasmuch as in the United States courts the distinction between actions at law and in equity is maintained, and the practice in the two classes of cases differ. In actions in equity the sufficiency of the pleading must be tested by motion, while in actions at law, following the New York Code practice, the sufficiency of the pleading is tested by a demurrer. Therefore, when the complaint contains appropriate allegations upon which a claim for equitable relief may be based, and which would seemingly also justify a recovery of damages as in an action at law, the plaintiff should be required to

elect on which ground he will proceed, or be required to so plead that there may be no mistake in this regard on the part of the defendant or of the court.

[2-4] The defendant has the right to test the sufficiency of the complaint before trial, and, if he demurs, assuming the complaint to be one stating a cause of action at law, he should not be defeated on the ground the action is sufficient in equity, and that the action may be construed to be one in equity. The construction this court would place on this complaint is that it states a cause of action at law for fraud and deceit, but under all the allegations this is not necessarily correct. No equitable relief is in terms demanded, but it would be easy to assert that this is immaterial, if the allegations of fact in the complaint are sufficient to justify the granting of equitable relief. Plaintiff pleads facts which show that the estate of Sullivan was in excess of $1,000,000; that by a valid will and codicil thereto the plaintiff and her sister, Hannah E. Glenn, were made residuary legatees; and that as such, under such will and codicil, the plaintiff and her said sister would have been entitled to and would have received as much as $800,000-the plaintiff as much as $400,000 or over. Then follow allegations that defendant made fraudulent representations and statements, fully set out, which induced the testator to change his will, or make a new one, when in fact incompetent; that proof and probate of this second will was secured by fraud and deceit; and that by fraud and deceit the plaintiff was induced to accept a small legacy given under this last alleged will. The facts pleaded, if actionable at law, sufficiently show damages in excess of $400,000. It is unnecessary to say in a pleading in so many words that the plaintiff has sustained damages, if he alleges facts showing that he has sustained damages and he demands judgment based thereon for a sum named.

This cannot, it seems to me, be regarded or treated as a suit in equity to set aside the proof and probate of the last-mentioned will on the ground of fraud and deceit. Must not such a proceeding be had in the court of probate jurisdiction and where the will was probated? All interested parties would have to be before the court. In an action at law to recover damages for deceit practiced on the testator and resulting in damages to a legatee, the gist is fraud and deceit. In a proceeding to set aside the probate of a will and have it adjudged invalid on the ground of fraud and misrepresentations practiced on the testator, false and fraudulent statements, if pertinent, made by any one, might be competent; while in an action at law to recover damages for fraud and deceit, resulting in damages, is it not necessary that the false and fraudulent representations relied on should have been made by the defendant in the suit or by his procurement? If this be so, then, assuming this to be an action at law for deceit, as plaintiff on this hearing asserts it to be, allegations of false representations made by others, not speaking for or representing the defendant, or not made by his authority or procurement, are irrelevant, and should not be in the pleading. Therefore I think this complaint should be made definite and certain as to who made the representations set out in the complaint. The pleading should state what representations were made by the de

fendant, and what were made by others, and, when made by others, whether they were made by authority and procurement of the defendant or otherwise.

There will be an order accordingly.

In re KAPLAN.

(District Court, D. Massachusetts. August 13, 1917.)

No. 22939.

BANKRUPTCY 414(3)-DISCHARGE EVIDENCE.

On a bankrupt's application for discharge, evidence held to show that the bankrupt gave false testimony on his examination by creditors, and hence a discharge should be denied.

In Bankruptcy. In the matter of the bankruptcy of Louis A. Kaplan. On application for discharge. Application refused.

George D. Storrs, of Ware, Mass., for bankrupt.
Jacobs & Jacobs, of Boston, Mass., for creditors.

MORTON, District Judge. This is an application for discharge. The objecting creditors specify in opposition thereto the bankrupt's failure to keep adequate books of account with intent to conceal his financial condition, and false testimony by him on his examination.

The bankrupt opened a store in Ware on March 19, 1915. He filed a voluntary petition in bankruptcy on December 1, 1915, owing over $16,000, mostly to merchandise creditors. He had been unable to pay a note for $500 which fell due in August preceding. Nevertheless, in September, October, and December, he bought, mostly on credit, more than $10,000 worth of goods. When many of these purchases were made, he knew he was insolvent.

His books were entirely inadequate. There was no record of the amount of sales, or of money borrowed, or of outstanding notes; and there was no account of the disposition of cash receipts, except as they might be deposited in the bank. A considerable amount of money was not accounted for.

On his examination the bankrupt again and again replied, "I don't know," "I couldn't say," "I don't remember," to questions concerning matters which had been within his knowledge, which had taken place within a few months before the examination, and which were of such character that entire forgetfulness concerning them all is incredible. More than 60 times during an examination covering fourteen pages of typewriting, the bankrupt made answers of the sort referred to. In some instances the answers can, perhaps, be justified by the phrasing of the question; but in many others they are obviously untrue. The inference of an intent to falsify is greatly strengthened by the repetition of such answers to various sorts of questions, such as occurs in this examination.

The Bankruptcy Act (Act July 1, 1898, c. 541, 30 Stat. 544) extends to insolvent debtors very great benefits; but these are granted upon the assumption that the debtor will honestly perform his duties under the act. If he fail to do so in any particular on which objections to discharge may be grounded, there should be no hesitation in refusing

the discharge. Few duties imposed by the act are of more practical importance than that to disclose fully to his creditors his transactions immediately preceding the bankruptcy.

Notwithstanding the finding of the learned referee, and the great weight to which it is entitled, I have no doubt that the bankrupt testified falsely on his examination. The finding of the learned referee. must be set aside, and the second specification of objection must be sustained. It is unnecessary to consider whether the first specification is also established, and I express no opinion on that point. Application for discharge refused.

In re STIER MARCH CONTRACTING CO.

(District Court, E. D. Pennsylvania. November 8, 1916.)

No. 5505.

1. BANKRUPTCY ~252-COMPROMISE BY TRUSTEE-APPROVAL BY COURT. A corporation's schedules in bankruptcy included a steam shovel valued at $2,500. At a sale of the bankrupt's assets, H., the receiver in bankruptcy, withdrew the steam shovel, claiming title thereto. The bankrupt's officers testified that the steam shovel had been sold to H. six months before the petition was filed; but it did not appear that H. was present at the time of the sale, that any price had been agreed on or delivery made, and the only documentary evidence of the sale consisted of an entry on the bankrupt's books and a bill for the shovel sent to H. H.'s son was the company's vice president, and the company was heavily indebted to H. Held, that the circumstances were such as to throw upon H. the burden of proving his title, and the trustee's compromise of the claim of the estate against H. for $500 would not be approved, under Bankruptcy Act July 1, 1898, c. 541, § 27, 30 Stat. 553 (Comp. St. 1916, § 9611), making the trustee's power to compromise controversies subject to the approval of the court.

2. BANKRUPTCY

114(1)-RECEIVER'S PERSONAL CLAIMS DUTIES.

It was the duty of a receiver in bankruptcy, claiming in his own right a steam shovel, included in the scheduled assets, to make a full disclosure of all the circumstances in connection with his claim, as he could not faithfully represent the interests of the bankrupt estate at the same time that he was asserting his individual claim of ownership of the principal asset of the estate.

In Bankruptcy. In the matter of the Stier March Contracting Company, bankrupt. On certificate of the referee for review of an order. Order vacated and set aside.

John C. Gilpin, of Philadelphia, Pa., for petitioner.

William Sandberg, of Philadelphia, Pa., for trustee.

THOMPSON, District Judge. The petitioner prays for review of an order of the referee, entered August 11, 1916, granting leave to the trustee to accept the offer of William Henderson for $500 in settlement of all the claims of the bankrupt estate "upon or by reason of a certain steam shovel."

[1] Considerable testimony was taken before the referee upon the question of ownership of the shovel referred to, and a meeting of creditors was called, at which the offer in compromise was approved. The referee thereupon entered the order concerning which complaint is

made. It appears from the testimony that William Henderson was appointed receiver of the bankrupt; that the schedules filed included among the assets a certain steam shovel, valued at $2,500; that a sale was had of the assets of the estate, and the steam shovel withdrawn by the receiver, who claimed title to it in his own right, although it had been included among the articles advertised for sale by the auctioneer. At the time of the withdrawal, the auctioneer offered the receiver $1,500 for the shovel. In the receiver's account he charged himself with the proceeds of the sale, and at the audit the referee was asked to surcharge him with the value of the steam shovel. Mr. Henderson was nominated trustee; but objection was made because of his interest in the steam shovel, and another person elected trustee. Although the shovel was enumerated among the assets, the officers of the bankrupt company testified before the referee that it had been sold to Mr. Henderson some six months before the petition in bankruptcy was filed. It did not appear that Mr. Henderson was present at the time of the sale, that any price had been agreed upon, or that delivery was made.

[2] It was testified that, after the election of the trustee, Mr. Henderson sold the shovel to one Charles S. A. Booth for $1,200. The documentary evidence of the sale to Henderson consisted of an entry upon the books of the bankrupt company and a bill sent to Mr. Henderson for the shovel at the price of $2,500. The company, of which Mr. Henderson's son was vice president, was heavily indebted to Mr. Henderson at that time. The circumstances are sufficient to cast doubt upon the validity of Mr. Henderson's title. In his position as receiver, there should have been a full disclosure at the time of all the circumstances in connection with his claim, as he could not faithfully represent the interests of the bankrupt estate at the same time that he was asserting his individual claim of ownership of the principal asset of the estate. The trustee surely has a strong claim of title in the bankrupt, and all the facts and circumstances surrounding the transaction should have been diligently inquired into.

Under section 27 of the Bankruptcy Act, the power of the trustee to compromise controversies arising in the administration of the estate is subject to the approval of the court. The evidence in the present case is such as to prima facie throw upon the claimant the burden of proving his title.

The court, therefore, withholds its approval of the compromise. It is ordered that the order of the referee be vacated and set aside.