Hubert Dean Rhoades, Bankrupt v. C. Douglas Wikle

In this California bankruptcy case, Hubert D. Rhoades appeals an order of the District Court affirming a refusal by the Referee in Bankruptcy to grant a discharge on his voluntary petition of bankruptcy. The discharge was refused on the ground that the bankrupt had “failed to keep or preserve books of account or records, from which his financial condition and business transactions might be ascertained” as required by § 14(c) (2) of the Bankrutpcy Act, 11 U. S.C. § 32(c) (2). Neither the referee nor the court felt that “such acts or failures were justified under all the circumstances of the case.” We agree and affirm.

Prior to 1968, the bankrupt and his wife, Virginia, both licensed real estate brokers, worked at a neighborhood real estate business known as Rhoades Realty. The business license was issued to Virginia, doing business as Rhoades Realty. She hired the clerical personnel and ran the quotidian office affairs. The bankrupt, who was also a railroad conductor, spent between five and ten percent of his time working at Rhoades Realty listing and selling real estate, receiving commissions. While Virginia ordinarily kept the business records, the bankrupt kept them on at least…