In re Edwards (73 F. Supp. 312, 1942)

McCORMICK, District Judge.

This is a review of an order of the referee which overruled objections interposed by one creditor to the bankrupt’s discharge; denied the petition of the objecting creditor to exclude from the discharge obligations of bankrupt to such creditor, and which conditionally granted the bankrupt’s discharge in bankruptcy.

Upon consideration of the referee’s certificate on review and the entire record of this proceeding, together with the arguments and memoranda of respective counsel, the findings of fact, conclusions of law- and order of the referee dated November 24, 1941, are and each is confirmed, and such findings of fact and conclusions of law of the referee in bankruptcy' are hereby adopted and made the findings of fact and conclusions of law of this court.

Petitioner on review contends that the refusal of the bankrupt to make certain payments which he had voluntarily agreed to make under an arrangement proceeding pursuant to Section 74 of the Bankruptcy Act, 11 U.S.C.A. § 202, being Number-29855-H now pending in this court, was, in effect, a refusal to obey a lawful order of this court, and that his attitude in that, matter operates to bar bankrupt’s discharge herein under Section 14, sub. c.(6) of the. Bankruptcy Act, Title 11 U.S.C.A. § 32, sub. c(6).

However, from the evidence presented, the referee determined that the prior proceeding was not by way of composition but was, in effect, a voluntary offer or compromise by the bankrupt debtor to pay -his •creditors in the future portions of his salary as provided iñ the plan of arrangement.

The court upon consideration of the record should not disturb those findings of the referee. The referee held that the earlier proceedings, to-wit, 73 F.Supp. 310, were in the nature of a mere voluntary offer to the debtor’s creditors with a consequent approval by this court and that such order does not fall within the meaning of said Section 14, sub. c(6).

Counsel for the objecting creditor relies upon In re Lesser, 2 Cir., 234 F. 65, and In re Gophrener, D.C., 20 F.Supp. 922, as authority that a discharge in bankruptcy should now be refused the bankrupt herein. In my opinion, these cases are inapplicable to this review. Both cited cases relate to objections to a discharge under provisions of the Bankruptcy Act other than Section 14, sub. c(6). The last named section of the Act refers to a situation wherein the bankrupt has refused to obey some personal order, such as an order for his appearance, •etc., in a proceeding upon which the court in its discretion may withhold or refuse a discharge in bankruptcy until said order has been complied with by the debtor.

Petitioner further contends that since the debtor in the course of his prior proceeding under Section 74 earned sums in excess of $13,000, which sums he neglected to turn over to the custodian in said earlier arrangement proceedings, the bankrupt’s application for discharge should now be denied.

Apparently petitioner relies upon the provisions of the Act which are as follows : “The court shall grant the discharge unless satisfied that the bankrupt * * * has failed to explain satisfactorily any losses of assets or deficiency of assets to meet his liabilities.” Very little independent testimony was introduced before the referee upon this objection. Counsel for the objecting creditor merely referred to hearings which were had in the prior arrangement proceeding. There has been no r