(dissenting.)
The verified petition for adjudication in bankruptcy filed by Continental against Crofoot contained the following allegation:
“Your petitioner, upon information and belief, states that the creditors of the Alleged Bankrupt are less than twelve (12) in number.”
In the course of an examination before the referee, counsel for Continental admitted that the attorney for Crofoot had told him the day before the petition was filed that the alleged bankrupt had more than twelve creditors. He has also admitted that except for the information received from Crofoot’s attorney the only basis for the allegation that on “information and belief” there were fewer than twelve creditors was a statement by his client that it had knowledge of only two additional creditors and that it “in no way knew or had cause to know as a fact that there were in excess of twelve qualified creditors of the alleged bankrupt.”
The motion to dismiss the petition and for summary judgment by Crofoot was based on the ground that on the date of filing the involuntary petition the creditors of the alleged bankrupt were more than twelve in number, and that the petitioning creditor knew or had reasonable cause to knew that the said creditors were more than twelve in number. The motion was supported by affidavits. Attached to one affidavit was a list containing more than one hundred (100) persons, firms and corporations, all of whom were creditors of the alleged bankrupt when the petition was filed.
While it is true that the referee, in announcing his decision to grant the motion to dismiss stated that it was not based “on the ground of fraud or recklessly false allegations, but merely on the absence of any countervailing affidavit to that of H. Edward Koch, listing creditors who obviously are more than twelve,” he prefaced the foregoing statement by saying, “I cannot find, from reading the pleadings and the affidavits that there was fraud on the part of the petitioning creditor beyond all peradventure.” More importantly, the referee in his formal findings mentioned neither the existence nor absence of fraud.
The trial judge, in affirming the referee’s order of dismissal, recognized the complete absence of any evidence offsetting the clear inference that petitioning creditor had reason to believe that there *173were more than twelve creditors when it filed the petition.1
It would appear that this Court is holding that in the absence of a finding of fraud the referee is without authority to dismiss the petition. I do not think a formal finding either of fraud (at least one “beyond all per adventure”), or of reckless indifference is required. Navison Shoe Co. v. Lane Shoe Co., 36 F.2d 454 (1st Cir. 1929), clearly supports the decision of the trial judge.2
Here, the petitioning creditor made the verified averment that “upon information and belief” there were less than twelve creditors despite the fact that the only affirmative information on the subject made available to it was to the contrary.
The decisions of the referee and trial judge are being reversed because their rulings failed (charitably perhaps) to include a formal finding that this was a fraudulent attempt to confer bankruptcy jurisdiction. In light of the facts, I do not think such ritualistic formality was necessary. I would affirm the District Court’s order of dismissal.
. The trial judge’s statement reads in part:
“The Court has carefully examined the motion, memoranda, and affidavits filed with the Referee, the transcript of the hearing on the motion, and pertinent authorities. The uncontroverted facts show that the number of creditors on the day the petition was filed was in fact in excess of 100, computed in accordance with 11 TJ.S.C. Sec. 95(e), and the counsel for the petitioning creditor was informed before the filing of the petition that the number of creditors was more than 12.
“Title 11 TJ.S.C. See. 95(b) provides that three creditors may file a petition to have a person adjudged a bankrupt, but if there are less than 12 creditors, a single creditor may file a petition. When the single petitioning creditor believes in good faith that there are less than 12 creditors, and the alleged bankrupt moves for dismissal, alleging that there are more than 12, the court shall cause all creditor's to be notified of the pendency of the proceeding and delay a hearing for a reasonable time to the end that all parties in interest may have an opportunity to be heard. If at the hearing it be shown that a sufficient number of creditors have since joined, the case may proceed, but otherwise it shall be dismissed (11 TJ.S.C. Sec. 95(d)). But if the petitioning creditor makes the averment, that the creditors are less than 12, in bad faith, recklessly, or fraudulently and thereby attempts to impose jurisdiction on the court in hope that a sufficient number of creditors will intervene and save the defective petition, the court may properly dismiss. (Citing cases.)
* * * *
“No indication has been made showing upon what information petitioning creditor believed the creditors were less than 12 in number. In view of the admissions in the record of counsel for petitioning
creditor, and other evidence from which it could be reasonably inferred that counsel for petitioning creditor and petitioning creditor had reason to believe that the number of creditors was in excess of 12, this Court is unable to say that the order of the Referee is ‘clearly erroneous.’ ” (Emphasis supplied.)
. In the Navison Shoe case, the court said:
“It was wholly immaterial what counsel for the Lane Shoe Company believed. The material question was what the Lane Shoe Company knew or should have known and believed, on the date it filed its petition seeking the adjudication of the Navison Shoe Company, Inc., as a bankrupt, having previously received the information that it had; * * *
“ * * * the conclusion to be drawn from the primary facts found by the master is clear — that the Lane Shoe Company, on November 10, 1928, when it filed the petition, in which it alleged that the creditors of the Navison Shoe Company, Inc., were less than twelve, did so knowing that the allegation was false; or did so recklessly not caring whether the allegation, which it affirmed as of its own knowledge to be true, was true or false, and, being false, its conduct was a fraudulent attempt to confer jurisdiction upon the court, where none existed. * * *
“It is incredible that the petitioner did not believe the information that had been §iven it, or, having such information, did not suspect what it affirmed in its petition to be true was false, in which event its conduct would be fraudulent, for one cannot affirm as of his own knowledge a thing to be true, intending it to be relied upon, if he suspects it to be false, without being guilty of fraud. * * * A person who suspects his statement is false does not entertain an honest belief it is true, or is consciously and wickedly indii ferent to its truth or falsity.”