On January 9th M. Kaplon from Wake Forest wires Aarons at New York:

"Don't send man until further notice. Bad weather."

It is in evidence that the assignee, both at Wake Forest and at Chase City, made the sales upon the advice of the counsel for Moses Kaplon. From the foregoing and other evidence, appearing in the examination of Saul and Bessy Kaplon, it is manifest that the business of Moses Kaplon & Co., at Wake Forest, was conducted exclusively by them and that, as between them, defendant Bessy was the controlling spirit. She spent a large part of her time in the active management of the business. Her husband was during the time intervening, between March, 1910, and December, 1911, traveling about, endeavoring to establish branch stores at Zebulon, Hillsboro, and Rutherfordton. This is shown by his own testimony, other witnesses examined and the telegrams. It appears that the statement made to Bradstreet was recalled. In his several examinations regarding these statements Saul makes many contradictory statements. It is impossible to draw any very satisfactory conclusions from his testimony in regard to the statements. It is apparent that they were made with either a purpose to deceive and obtain a very much larger line of credit than he was entitled to, or with a reckless disregard of the truth. If he had a stock of goods, inventoried on July 25, 1911, at $8,200, as he stated, it is impossible to understand what became of them between that date and the date of the inventory taken by the assignee about January 4, 1912. It is conceded that they purchased during the fall season of 1911 goods amounting to $11,135.85. This amount added to $8,200 makes $19,355.85. The amount deposited in bank during the same period representing, they say, the amount of cash sales, is $5,284.80. They sold nothing on credit. Assuming that the goods were sold at cost, although they say that they were sold for a profit, there should have been on hand December 26, 1911, approximately, goods of the value of $14,071. No cash or balance in bank nor accounts payable were delivered to the assignee. The inventory shows goods of but $7,506 value, thus showing a shortage of $6,565. Mr. D. Gulley, who is an attorney, says that he has no special knowledge of the prices of goods. He also says that Saul Kaplon alone assisted him in taking the inventory, calling out the prices that it was taken "in a very general way.' Plaintiff insists that the real value of the goods was very much in excess of the inventory. I think it very probable that the statement made by Saul Kaplon in regard to the value of the goods on hand August 19, 1911, is false, but to what extent it is impossible to even conjecture. His testimony indicates either a reckless disregard of the truth or a disordered mind. Whether true or not that the statement made to commercial agencies had the effect of giving to them a large credit is evidenced by the amount of debts proven against Moses Kaplon & Co. in bankruptcy for goods purchased subsequent to the statement. Of the amount deposited in bank only $2,435 was paid on account of debts. Saul and his wife were to receive $100 per month and ex

penses for their services. Their family consisted of themselves and one infant. Without undertaking to unravel this tangled thread or explain this very peculiar manner of conducting a mercantile business. of the size and character disclosed by the testimony, it is manifest that Saul and Bessy Kaplon, and their father, Moses Kaplon, are the only persons who are capable of explaining very much which in the light of results calls for explanation. There was either gross misrepresentation of the condition of the business on August 19, 1911, or a very large shortage in available assets at the time the property went into the possession of the assignee or a large sale of goods for cash which went into the possession of Saul Kaplon and his wife, unaccounted for by them. It seems that they did not receive the amount to be paid them for services. Saul proves a claim of $1,000 against his father for balance due on account of services. The telegrams put in evidence tend strongly to show that during the latter part of November, 1911, Moses Kaplon & Co., or Saul and his wife, conceived the purpose of having a "rush or special sale" and sought the services of a firm in Buffalo, N. Y., for that purpose. It is not clear to what extent this purpose was executed. The man sent out to conduct the sales appears not to have given satisfaction. The last telegram, relating to this phase of the transaction, bears date December 8, 1911. "Don't send man; you've fooled too many times." This was evidently sent by Bessy Kaplon, because on the 9th December she wires M. Kaplon at Chase City: "Be sure to come to-morrow-Sunday. Bessy." And on the 11th December to her husband at Rutherfordton not to come "until I tell you Father and Balkind here." It is not clear, because of the absence of any punctuation, whether this wire should be understood as a statement that her father and Balkind are then at Wake Forest, or as a direction to her husband not to come until she tells him that they are there. The next telegram, December 11th, from Balkind to Aarons, shows that the former was at Wake Forest on that day, and that Moses Kaplon was there on the 12th December. From that day until the business is brought to a conclusion by the execution of the deeds of assignment, the sale of the stock to Adolph Aarons at Chase City and to Bessy Kaplon at Wake Forest, the telegrams show that Balkind, Aarons, and Moses Kaplon are in constant communication in regard in disposing of both stocks. of goods. Without attributing to the assignees any complicity with, or knowledge of, the purpose on the part of Moses Kaplon to bring about sales of these stocks to the persons selected by himself, it is manifest that there was undue haste in making the sales. They both state they were made under the advice of the counsel for Moses Kaplon. Keeping in mind the relationship of these parties, the significant language of the telegrams, the manner in which the business at Wake Forest was conducted, the statement made by Saul on August 19, 1911, his absolute indifference to or disregard of its truth, the margin. between the value of the goods stated to be on hand in August, 1911, those purchased between that date, and December 27th of that year, and those found in the store at the date of the assignment, the failure on the part of Saul Kaplon and his wife to render any account of the

business, their contradictory statements made upon their several examinations, and many other facts and circumstances found in the conduct of the parties concerned, call upon the defendants to explain the transactions which, in four months, resulted in converting a business, which Saul Kaplon stated was not only amply solvent, but carried a large amount of "net available assets" into insolvency, and a series of transactions thereafter resulting in putting into the possession of Bessy Kaplon the stocks of goods representing purchases in four months of some $12,000, inventoried at $7,500, for $3,750. The series of transactions disclosed, with these results, call for a frank, full, and corroborated explanation to overcome the presumptions which arise from the facts and circumstances recited.

To meet the case thus made by plaintiff, defendants rely upon the testimony of Bessy Kaplon, introduced by plaintiff, insisting that it shows the sources from which she obtained the money with which she paid for the Wake Forest stock of goods, and explains the entire transaction consistently with honesty and good faith. Bessy Kaplon was examined before a commissioner. She says that her father gave her, as her "marriage portion," $6,000, a part of which she had deposited in certain banks, named by her, in Chicago, and a part was left with him, the balance she kept in her trunk. She further says that her sister, Mrs. E. H. Flowers, residing in Chicago, sent her on January 6, 1912, $1,547. In this statement she is corroborated by a telegram from her sister of that date. Her telegram of January 6th says: "Just mailed $1547-some hustling to-day." Bessy Kaplon says that this amount was sent in three checks, one for $1,000, which she sent back to her sister in a few days, that she returned the $1,000 check, depositing $547. The bank book shows a deposit by Bessy Kaplon January 9th of $1,615; that, when she wrote her sister for it, she did not tell her for what purpose she wanted it; that she did not want it to buy the stock. Her sister was examined in Chicago, and says that she sent to Bessy Kaplon a draft for $1,547; that she got it from a bank in Chicago, the name of which she cannot remember. She says that she had the money in a vault of the Citizens' Savings & Trust Company, Chicago, that she had "saved it up," that Bessy did not return any part of it to her owes it all now. Her testimony in regard to the source from which this money came and the correspondence with Bessy in regard to it is very unsatisfactory. She says that she had a letter telling her to send the money, but destroyed it. She admits that her testimony, taken at another time, in regard to the amount of money which she had, was untrue. The cashier of the Citizens' Trust & Savings Bank was examined, and stated that Esther Flower rented a box in its vault November 4, 1911. The transaction is involved in mystery and doubt. Where the money came from, in what form it was sent, whether in one check or draft as testified by Mrs. Flower, or in three, as Bessy Kaplon swears, at what bank in Chicago the check or checks were issued, are uncertain. Mrs. Flower says that she does not know; that although she has resided in Chicago a long time, had a box in the vault of the bank, she is unable to tell where, or in what form, she got the exchange, etc. The deposition of the clerk in the First National Bank of Chicago was taken. He says no such check was issued by that bank

on that or any other day. Bessy Kaplon says that she did not write. to her sister for money to buy the goods, that she did not need it for that purpose, that at the time she wrote she did not intend to buy the goods; that she had at the time about $3,000 in her trunk; that her father owed her about $2,000, and she had money on deposit in banks in Chicago as much as $3,000. She says that, when she was married, her father gave her $6,000 as her "portion." "Mostly all bills, there was some little gold." She left a part of it with him, deposited some in bank, and always kept some in her trunk. She further says that she borrowed from one Louis Applefield $2,100, which she used in paying for the goods. She loaned Adolph Aarons, to help him pay for the Chase City stock, $1,434. Her testimony in regard to all of these matters is vague, uncertain, and frequently contradictory. Plaintiff took and read the deposition of her father, S. L. Levine. He says that he gave her some money at different times, that he has no memorandum or evidence of the dates or amounts of such gifts, that they may have amounted to $5,000 or $6,000. He denies that he had any .money for her, or owed her any money. His testimony in regard to these matters is very indefinite and unsatisfactory, and in several material respects he contradicts his daughter. The testimony of the cashier of one of the banks, in which she says that she had money, was taken. He says that on July 11, 1911, she deposited in the bank $100, and on January 18, 1912, drew it out with the accrued interest. The cashier of the Kenwood Trust & Savings Bank says that she deposited but a small amount in that bank during the years 1908-1911, not exceeding $575. She drew out the balance $345.65 January 6, 1912. No other bank account in her name is found in Chicago. Thus but two sources remain from which she could have received the money with which she paid for the goods. In regard to the alleged money in her trunk she is not corroborated by a single witness. Her husband, she says, knew nothing of her having money in her trunk, although she claims to have kept it there during the period of her married life. The cashier of the Citizens' Bank of Wake Forest says that about the time of the purchase she spoke to him about borrowing a large sum of money, but nothing came of it. The cashier of another bank at Wake Forest says that she brought small bills to him to be exchanged for larger ones. I find it difficult to believe that her father gave her $6,000. There are many facts and circumstances in the record rendering it very improbable, nor can I find upon her uncorroborated testimony that she kept $3,000, or any like sum, in her trunk during the years of her married life, as she says. It is so unreasonable, and she makes so many statements in which she contradicts herself, and so many in which she is contradicted by those who would, if possible, corroborate her, that it is impossible to safely adopt her testimony as true. The cashier of the Citizens' Bank of Wake Forest says that about the time of the transaction in controversy she brought him $1,434 in currency, probably some in silver, which at her request he sent to the First National Bank at Chase City by express; that he did not send the same bills, but larger ones. Mr. Williams, president of that bank, says that this money was received and placed to the credit of Adolph Aarons and drawn out by him by check payable to Mr. Jeffries, assignee. The

check was drawn several days before the money arrived. The evidence shows that Aarons was relying on this money to use in part payment for the stock of goods there. The balance appears to have been paid from the proceeds of two notes of $500 each given by Aarons to the bank, indorsed by Moses Kaplon, and secured by a deed of trust on the goods. Aarons who lives in New York, left the goods in the possession of Moses Kaplon, who continued to sell them, and deposit the proceeds to Aarons' account. The notes were paid by checks on the account of Aarons, drawn by Moses Kaplon, in Aarons' name. Bessy Kaplon says of this money sent to Aarons that it was "money that I have had here for a long time. It was a part of the money that I had that my father gave me, had it ever since he gave it to me. I don't know where I kept it, most any place, kept it home in my trunk ever since I was married-five years ago. Don't think my husband knew it; think my father did; did not want to deposit in bank." She says that Aarons has paid her a part of the $1,434. She has no note or other evidence of the debt. He has promised to pay the balance in July. That Aarons, a merchant in New York, should come to Chase. City for the purpose of buying a large stock of goods without having made any arrangement to pay for them, depending on borrowing the money from the daughter-in-law of the bankrupt debtor, and negotiating a loan for the balance at a local bank upon the indorsement of the debtor and a lien on the goods, excites suspicion that the entire transaction was for the "ease and benefit" of the insolvent debtor. This suspicion is vastly strengthened by all of the "facts and circumstances" surrounding the transaction.

Coming to the alleged loan by Louis Applefield of $2,100, defendant produced notes executed by her to Applefield and checks showing their payment. The testimony in regard to this transaction comes from Bessy Kaplon, and in this respect is important. At her examination. taken before a commissioner (In re M. Kaplon & Co.) May 16, 1912, she says:

"I borrowed $2,100 from Louis Applefield of Baltimore. I don't know how long I had known him-about two or three years. He is a wholesale merchant. He was down here at the time. He just came down here. He travels all around, and he heard about the assignment being filed, and he said: 'If I were you, I would buy that stock of goods.' I said: 'I want to go to Chicago. I don't want to live here.' He said: 'I think you ought to buy it.' I said: "Will you loan me the money? He said: 'I will loan you all you want.' And he loaned me $2,100. The day I borrowed the money I went over and he gave it to Mr. Brewer. He was there when I signed the note. I gave him notes. I have just got through paying the notes, four notes. Three amounted to $500 and one $600. I paid the last May 10th. Business is so dull here. I had to draw money from Chicago, a thousand dollars, and gave it to Mr. Brewer. I drew it on the First National Bank of Chicago. I wrote to the bank in Chicago, and told them to send me the thousand dollars. I certainly had money in Chicago.. I did not want to take my Wanted to save it to educate my child."

*

money.

Mr. Brewer says that Bessy Kaplon and Louis Applefield came into his bank and asked him to fill up a couple of drafts on Applefield in Baltimore, and to take off the interest on two or three notes. The drafts were paid. The bank books show a deposit by Bessy Kaplon