57 L. Ed. 780; Courier-Journal Co. v. Schaefer-Meyer Co., 101 F. 699, 41 C. C. A. 614; Dodge v. Norlin (C. C. A. 8) 133 F. 363, 66 C. C. A. 425; Harrison v. Clarke (C. C. A. 8) 182 F. 765, 105 C. C. A. 197; In re B. & R. Glove Corp. (C. C. A.) 279 F. 372; Unkle v. Wills (C. C. A. 8) 281 F. 29; Wood County Grocer Co. v. Frazer (C. C. A. 8) 284 F. 691; Stalcup v. Jepson (C. C. A. 8) 289 F. 479; Daniels & Fisher Stores Co. v. Gregg (opinion this court Nov. 2, 1925) 9 F.(2d) 43. In Stalcup v. Jepson, supra, a case somewhat similar to the one at bar, this court said:

"The order denying discharge is general, but the record contains a brief opinion of the District Judge, in which he found that discharge should be denied on the second ground stated. He expressed no opinion as to whether either of the other grounds of objection was sustained by the evidence. It is argued here (a) that the facts do not support the conclusion stated by the District Judge; and (b) that this court has no right to review and weigh the evidence for the purpose of deciding whether either of the other objections was established; that we are restricted to an inquiry as to whether the reason given by the District Judge is sustained by the proof, and, if not, there must be reversal. We must reject both contentions. As to the first, we have no doubt that the facts fully support the conclusion of the court on which the order was entered, and, as to the second, the appeal of the bankrupt comes here under section 25a (Comp. St. § 9609), as in equity cases, and the facts and law are both submitted to us for review and decision."

which provides for a discharge of the bankrupt "unless he has with intent to conceal his financial condition, destroyed, concealed, or failed to keep books of account or records from which such condition might be ascertained."

The record discloses the following facts tending to support the specification: That during the first half of the year 1922 the bankrupt paid to his wife approximately $2,300 on account of debts owed by him to her, and that such payments were made out of the proceeds of the business of the bankrupt, but were not entered upon the books. These payments were made partly from sales of furniture, partly from sales of caskets, partly from moneys received by the bankrupt for acting as director at funerals. The record further discloses that the bankrupt kept no accurate account of his expenses and that the same were not entered upon the books; and the record further discloses that certain household furniture was taken from the stock of the bankrupt and turned over to his wife and that no record was kept upon the books of such transaction.

[3] Before a bankrupt may be denied a discharge for failure to keep books of account under the clause of the statute above quoted, two things must concur: First, there must be a failure to keep proper and accurate books of account; second, there must be an intent on the part of the bankrupt to conceal his true financial condition from his creditors. This intent, however, may be presumed from facts and circumstances. No satisfactory explanation was given by the bankrupt relative to his failure to keep accurate books of account, so far as they re

Passing to a consideration of the merits, the record discloses the following ground for opposing the discharge:

"First Specification.-Said bankrupt has, with intent to conceal his financial condition, failed to keep books of account or records, from which such condition might be ascertained, in that during the year 1922 said bankrupt did sell large amounts of merchandise to divers persons and not enter the sales or receipts from said sales on his books or records and did not enter on his books and records funerals which he directed and the fees he received from same and did not enter on his books or records the caskets he sold in the course of business and the money he received for same."

This specification is based upon section 14b (2) of the Bankruptcy Act, as amended,

der these circumstances we think that the rule announced by this court in McKibbon v. Haskell, 198 F. 639, 642, 117 C. C. A. 343, 346, should apply. In that case the court in its opinion said:

"The act of Congress proclaims the presumption and expectation of the law that honest merchants will keep account books which will disclose their true financial condition. In the absence of prevailing evidence to the contrary, every man is presumed to intend the natural and inevitable consequence of his acts."

[4] Considering the facts in the light of the rule quoted, we are led to the conclusion that the evidence sustains the specification of objection to a discharge, and that, in the absence of countervailing considerations, a discharge should be refused.

It is contended, however, that the credi

tors are estopped to oppose the discharge of the bankrupt. The basis of the alleged estoppel is found in certain transactions prior to the bankruptcy proceedings. It appears from the record that in May, 1922, an extension agreement was entered into between Hamre and a number of his creditors, through the agency of the Northwestern Jobbers' Credit Bureau, having as its manager one Marin. The business of Hamre was thereafter run under the supervision, more or less direct, of the Bureau, from May to August, 1922, at a cost to the estate of approximately $2,500. At the close of this period a statement made by the manager of the Bureau showed that the assets were $54,542.88; the liabilities, $43,900. The liability figures included the $2,500 cost of running the business by the Bureau during the period mentioned.

The Bureau, finding that the handling of the business under the extension agreement was unsatisfactory, persuaded Hamre to execute a deed of trust, conveying all his property, less exemptions, to Marin, as manager of the Northwestern Jobbers' Credit Bureau, for the benefit of creditors. The deed bore date August 25, 1922, and was executed by Hamre and Marin. It contemplated execution also by the various creditors, and Marin took powers of attorney from almost all of the creditors, wherein they consented to the trust deed, and authorized Marin to execute the same for them, and agreed to be bound by the conditions thereof. They also filed their claims with Marin.

Though having these powers of attorney from the creditors, Marin did not in fact execute the trust agreement in their names, naively explaining to the creditors (but not to Hamre) that "your name will not be attached to the trust agreement, or your consent made binding, until we feel your interests are not prejudiced thereby." Meanwhile the business of Hamre was taken control of by Marin, and retained until after September, 1923. The assets were largely sold.

Disbursements were made for taxes and expenses, amounting to more than $7,000. Eventually about $6,300 in cash and $9,900 in uncollected accounts were turned over by Marin to the trustee in bankruptcy.

In April, 1923, an action was begun by the Minneapolis Bedding Company against Hamre in the state district court of Ramsey county, Minn. The Bedding Company was one of the creditors of Hamre, who had consented to the trust deed and had given Marin power of attorney to execute the same on its behalf. Marin was garnisheed, and disclosed

that he had in his possession moneys belonging to Hamre, which were held under a common-law assignment for the benefit of Hamre's creditors. Judgment was obtained in the main suit against Hamre by default, and thereafter on August 6, 1923, judgment was entered against Marin in the garnishment suit upon his disclosure. Execution issued, and money sufficient in amount to satisfy the judgment was paid by Marin to the judgment creditor. Thereupon three other creditors of Hamre, all of whom had consented to the trust deed of August 25, 1922, and had given Marin power of attorney to execute the same in their names, filed a petition in bankruptcy against him, alleging as the act of bankruptcy that he had, while insolvent, permitted the Bedding Company to obtain a preference through legal proceedings by suffering a judgment to be entered in the suit above mentioned and had taken no steps to vacate or discharge such preference.

This suit by the Bedding Company, in which Marin was garnisheed, has numerous earmarks of collusion between those two parties. The payment of the garnishee fees was waived by Marin. No attempt to defeat the garnishment, upon which the jurisdiction of the court depended, was made by Marin. He was still trustee under the trust deed of August 25, 1922, and still held the assets of Hamre under that deed, which had not been canceled or abandoned. Whether under such circumstances the assets in the hands of Marin were subject to garnishment may well be doubted. After the judgment against Hamre had been satisfied by the payment by Marin to the Bedding Company, the money was turned back by the Bedding Company to Marin, and he continued to hold it until it was turned over by him to the trustee in bankruptcy, and from the account rendered by Marin, trustee, to the bankruptcy court, it appears quite probable that the attorneys who brought the suit for the Bedding Company were paid by Marin out of the funds held in his hands as trustee under the deed of trust. The end apparently sought to be accomplished by Marin for the creditors had thus been reached. The estate had been so administered that it was now unquestionably insolvent. Hamre was adjudicated a bankrupt, and the creditors were now in a position to demand that his discharge be denied. This demand they attempted to have made by the trustee in bankruptcy, as above set forth.

The trust deed of August 25, 1922, contained the following:

"The parties of the third part [the cred

trust.

"In consideration of the foregoing covenants the parties of the third part hereby agree to release said party of the first part from all liability on the amounts due them the same as said first party would be released by proceedings in bankruptcy." [5] In view of the foregoing facts disclosed by the record, we think the creditors of Hamre who acted through the Northwestern Jobbers' Credit Bureau, and Marin as manager, were estopped to object to the discharge of Hamre. The bringing of the suit by the Bedding Company was a plain violation of the covenants of the deed of trust. The collusive action of Marin was a plain violation of his duties as trustee under said deed.

[6] It may be said that the creditors were not parties to the deed of trust, because they had not executed the same. But they had assented to said deed, and had authorized Marin to execute the same in their names. For nearly a year Marin administered the estate in their behalf. Under such circumstances, equity will consider that as done which ought to have been done. The creditors who gave their powers of attorney to Marin must stand as though they had in fact executed the deed of trust.

It may be said that they received no dividend, no benefit from the deed of trust, and therefore were not bound by its terms. Whether they received a dividend is of little

The estate was administered

by their agent, Marin, for nearly a year, and he had assets in his hands from which a dividend could have been paid, if he had so wished. He charged and received compensation from the estate for administering it on behalf on the creditors. Hamre during this time was bereft of the control of his own property.

It may be further claimed that the creditors did not find out that Hamre had failed to keep proper books of account until shortly prior to the bankruptcy proceedings. The answer is that the creditors had partial control of the business under the extension agreement of May, 1922, and complete control under the trust deed of August 25, 1922, and that Marin made a personal investigation into the methods of the business in the early fall of 1922; so that the loose method of bookkeeping was either known or could have been known in the summer or early fall of 1922.

No action was taken by Marin or the creditors to cancel or repudiate the deed of trust. They recognized the deed of trust so long as it served their purpose; but when it was no longer useful they calmly disregarded it, and proceeded to throw Hamre into bankSince they could not have particiruptcy. pated in the assets of their debtor under the deed of trust without granting him a discharge, equity will hold that they are estopped to demand any greater advantage in the bankruptcy court.

It does not appear clearly from the record what other creditors, if any, of the bankrupt there are, besides those who acted through the Bureau, its agents, and attorneys. For this reason the proceeding will be remanded to the court below, with instructions to modify its decree, so that the bankrupt shall be discharged of the debts of all creditors who appeared in the proceedings, directly or indirectly, through the Northwestern Jobbers' Credit Bureau, its agents, or attorneys; as to the debts of other creditors, if any, the discharge not to be operative.

124

Cert

1141, 46 Sup. Ct. 482.

CHAPMAN et al. v. UNITED STATES.

(Circuit Court of Appeals, Fifth Circuit. December 21, 1925. Rehearing Denied January 29, 1926.)

125(52)

2. Indictment and information Conspiracy to commit several offenses may be charged in same count of indictment.

Conspiracy to commit several offenses may be charged in same count of indictment. 3. Indictment and information 130-Held not to have been misjoinder of offenses, where evidence failed to connect some of defendants in conspiracy charge with substantive offense. Where evidence fails to connect some of defendants to charge of conspiracy with substantive offenses of transporting automobiles which they knew had been stolen, held, that there was no misjoinder of offenses, in view of Rev. St. § 1024 (Comp. St. § 1690), as crimes of same class may be properly joined.

4. Witnesses 48(1)-One convicted of felony is competent witness.

to impose additional imprisonment in default of payment of fine imposed, and imprisonment cannot be extended beyond 30 days for nonpayment of fine.

In Error to the District Court of the United States for the Eastern District of Texas; W. Lee Estes, Judge.

Edgar M. Chapman and another were convicted of conspiracy, under Criminal Code, § 37, to transport motor vehicles with knowledge that they had been stolen, in violation of Motor Vehicle Theft Act, and defendant first named was also convicted on two counts of transporting motor vehicles in interstate commerce with knowledge that they were stolen, and they bring error. Judgment affirmed, but cause remanded for proper sentence.

Cecil H. Smith, of Sherman, Tex. (Head, Dillard, Smith, Maxey & Head, of Sherman, Tex., Ratliff & Ratliff, of Tishomingo, Okl., and J. H. Mathers, of Oklahoma City, Okl., on the brief), for plaintiffs in error.

Randolph Bryant, U. S. Atty., of Sherman, Tex.

Before WALKER, BRYAN, and FOSTER, Circuit Judges.

competent witness in criminal case.

5. Criminal law 753 (2)-Refusal to direct verdict for defendants is not error, where evidence would sustain verdict of guilty.

Where evidence is sufficient to sustain verdict of guilty, it was not error to refuse to direct verdict for defendants.

6. Criminal law_97(1)-Conspiracy trial may be held in Texas, where overt acts were committed therein, although some defendants remained in another state.

Where conspiracy existed in Oklahoma and Texas, trial could be held in Texas, notwithstanding some of defendants remained in Oklahoma, and overt acts were performed by

others in Texas, since all defendants need not join in overt acts.

7. Criminal law 1134(3)-Court will not in

quire whether evidence supports verdict on other counts, when sentence is no greater than could be imposed on first count.

Where sentence of defendant is no greater than could have been imposed on first count in indictment, it is unnecessary to inquire whether evidence supports verdict on other counts.

under section 37 of the Criminal Code (Comp. St. § 10201), to transport motor vehicles from Oklahoma to Texas and from Texas to Oklahoma, with knowledge that they had been stolen, in violation of the National Motor Vehicle Theft Act. 41 Stat. 324 (Comp. St. Ann. Supp. 1923, §§ 10418b10418f). Numerous overt acts to effect the object of the conspiracy are alleged. The other counts charged all the defendants with the substantive offenses of transporting motor vehicles in interstate commerce with knowledge that they were stolen; each of said counts specifying a particularly described automobile, which was also referred to in connection with some of the overt acts alleged in the first count. Only two of the defendants, Chapman and Lynn, have sued out writ of error. Chapman was convicted on the first, second, and third counts, and Lynn on the first or conspiracy count. Chapman was sentenced to pay a fine of $2,500 and to be imprisoned in the United States

ity to impose additional imprisonment in default of payment of fine.

Under Rev. St. §§ 1041, 1042 (Comp. St. §§ 1705, 1706), trial court is without authority

of the payment of the fine he was sentenced to imprisonment for 2 years. Lynn was sentenced to pay a fine of $3,000 and to be imprisoned in the United States penitentiary

for 15 months; but in default of the payment of the fine he was sentenced to be imprisoned for a period of 2 years.

[1] There was sufficient evidence, if believed by the jury, to sustain the verdict. According to the testimony, Chapman and Lynn arranged to buy and did buy a number of Ford cars, which they knew were stolen and brought from Texas into Oklahoma. They also, by agreement, bought Ford cars stolen in Oklahoma and sold them in Texas. One Russell, who testified for the government, had been convicted in Texas of a felony, and his testimony was admitted, over the objection that it was incompetent.

[2, 3] It is argued that the conspiracy count is bad, because it charges more than one criminal offense. It is permissible to charge a conspiracy to commit several offenses in the same count of an indictment. Bailey v. United States (C. C. A.) 5 F. (2d) 437. It is also insisted that there was a misjoinder of offenses, in that the evidence failed to connect some of the defendants with the substantive offenses of transporting automobiles which they knew had been stolen. It is not shown that injury resulted from this, but, on the contrary, it appears that the court carefully protected the rights of each defendant. The substantive offenses related to the same automobiles described in the overt acts, but the evidence failed to show that all of the defendants were guilty of the substantive offenses. The crimes were all of the same class and were properly joined. R. S. § 1024 (Comp. St. § 1690).

[4,5] The witness Russell, whose testimony was objected to on the ground that he had

States (C. C. A.) 285 F. 15. The conspiracy exists in any jurisdiction where overt acts are committed. Hyde v. United States, 225 U. S. 347, 32 S. Ct. 793, 56 L. Ed. 1114, Ann. Cas. 1914A, 614.

[7] It is finally said that the evidence does not support a verdict of guilty against Chapman on the second and third counts. It is unnecessary to inquire whether this contention be correct or not, as the sentence of that defendant is not greater than could have been imposed upon him under the first or conspiracy count.

Sec

[8] The maximum sentence under section 37 of the Criminal Code is a fine of $10,000 and imprisonment for 2 years. We are of opinion that the trial court was without authority to impose additional imprisonment in default of the payment of the fine imposed by it upon each of the plaintiffs in error. tion 1041, Revised Statutes (Comp. St. § 1705), impliedly authorizes imprisonment only until the fine is paid. Section 1042 (Comp. St. § 1706) confers upon one who is unable to pay a fine, and who has been confined in prison 30 days for non-payment, the right to be discharged. We therefore are of opinion that imprisonment cannot be extended beyond 30 days for the nonpayment of a fine.

The judgment is affirmed, but the cause is remanded for proper sentence upon each of the plaintiffs in error.

witness. Rosen v. United States, 245 U. S. 467, 38 S. Ct. 148, 62 L. Ed. 406. The evidence being sufficient to sustain a verdict of guilty, it, of course, was not error to refuse to direct a verdict for defendants.

[6] But it is insisted that the conspiracy was entered into in Oklahoma, if anywhere, and that the trial could not be held in Texas. According to the evidence, the conspiracy existed in both states. It is immaterial if some of the defendants remained in Oklahoma and the overt acts were performed by others of them in Texas. It need not appear that all the defendants joined in the overt acts; it is enough if the overt acts in pursuance of the conspiracy be committed by any one or more of the conspirators less than the whole number. Bannon v. United States, 156 U. S. 464, 15 S. Ct. 467, 39 L. Ed. 494; United States v. Rabinowich, 238 U. S. 78, 35 S. Ct. 682, 59 L. Ed. 1211; Baker v. United

(Circuit Court of Appeals, Fifth Circuit. December 30, 1925.)

No. 4616.

1. Insurance 455-Death in encounter of insured, if innocent of aggression, or if he could not reasonably anticipate injury from his aggression, held "accidental."

Where insured is innocent of aggression or

wrongdoing, or, if he is aggressor, could not reasonably anticipate bodily injury, his death by being killed in encounter with another is "accidental," within usual accident policy.

[Ed. Note.-For other definitions, see Words and Phrases, First and Second Series, Accident --Accidental.]

2. Insurance 455-Death of aggressor, who knew or should have anticipated possibility of death in encounter, held not accidental.

Death of aggressor is not accidental, within accident policy, where he knew or should have anticipated that other might kill him in encounter.