Robert S. Moffett v. The Union Bank, a California Corporation

Appellant Moffett was engaged in the business of manufacturing and selling insulation under the name of Insul Seal Products, Inc. until December of 1963. He then became employed as “National Franchise Director” of Richburger, Inc., which engages in the franchising and operation of restaurants. His function was that of a promoter, to find suitable locations and secure investors and operators for restaurants. His compensation was a commission based on the results achieved, approximately $500 per week. On occasion Richburger checks, which were signed with the amounts left blank, were delivered to appellant. At least two of these were filled out to cover gambling losses in Las Vegas. Appellant kept no books or records of his income or disbursements.

On March 8, 1965 appellant filed a petition in bankruptcy. He listed assets of $20,363 (all of which-he claimed to be exempt) and liabilities of $3,217,065.55. On February 25, 1966 the referee denied him discharge because of his failure to keep records. 11 U.S.C. § 32 (c) (2). The referee’s determination was affirmed by the district court, and appellant has sought review here. 11 U.S.C. § 47 (a).

Section 14(c) of the Bankruptcy Act ( 11…