Bazemore v. Stehling
| Decision Date | 20 June 1968 |
| Docket Number | No. 25469.,25469. |
| Parties | Wade Eugene BAZEMORE and wife, Darline Daffern Bazemore, Bankrupts, Appellants, v. Arthur STEHLING and Security State Bank & Trust, Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Stewart J. Alexander, San Antonio, Tex., for appellants.
Travis M. Moursund, San Antonio, Tex., Thomas C. Ferguson, Johnson City, Tex., Moursund, Ball & Young, Travis M. Moursund, San Antonio, Tex., for appellees.
Before COLEMAN and GODBOLD, Circuit Judges, and RUBIN, District Judge.
The referee in bankruptcy granted discharge of the appellant bankrupts over the objections of a creditor, American National Bank of Austin. American National did not seek review of the referee's decision, but other creditors, Security State Bank and Trust and Arthur Stehling, filed a petition for review by the district court, and the district judge denied discharge.
The sole ground of objection by American National was under sub-section (3) of § 14(c) of the Bankruptcy Act, 11 U.S.C.A. § 32(c) (3), which provides:
The court shall grant the discharge unless satisfied that the bankrupt has * * * (3) obtained money or property on credit, or obtained an extension or renewal of credit, by making or publishing or causing to be made or published in any manner whatsoever, a materially false statement in writing respecting his financial condition * * *.
The creditor must show falsity of the statement and that he relied upon it. Becker v. Shields, 237 F.2d 622 (8th Cir. 1956); Banks v. Siegel, 181 F.2d 309 (4th Cir. 1950); Rogers v. Gardner, 226 F.2d 864 (9th Cir. 1955). See Annot., 73 L.Ed. 586, 593. Without dispute the statement here involved was materially and substantially false. American National claimed that it extended or renewed a note of Bazemore in reliance thereon. The referee found there was no reliance and granted discharge. On review the district court, without receiving further evidence, held there was reliance and denied discharge.
Under General Orders in Bankruptcy 47 (305 U.S. 702, 83 L.Ed. 1549) the referee is required to set forth his findings of fact and conclusions of law, which he did with care and precision. His findings of fact are binding on the district judge unless clearly erroneous. General Order 47; Porterfield v. Gerstel, 249 F.2d 634 (5th Cir. 1957); Phillips v. Baker, 165 F.2d 578 (5th Cir. 1948). For us to review the findings of the district judge we must examine the evidence, which we have done. We do not determine whether the district judge's findings were clearly erroneous but whether the findings of the referee were; if the referee's findings were not clearly erroneous the district judge was bound to accept them. Phillips v. Baker, supra. We conclude that the findings of the referee were not clearly erroneous, in fact were clearly correct. Therefore, the decision of the district judge is reversed.
Bazemore was introduced to American National by Stehling, the president of Security State. Security was a correspondent and good customer of American. Stehling was attorney for Bazemore in various matters, and his bank had loaned Bazemore the maximum amount it legally could. American National made various unsecured loans to Bazemore, up to an outstanding total of as much as $35,000, without audited financial statements from him. In December 1965 it held his unsecured demand note, dated March 1965, for $15,000. Bank examining authorities had noted that American did not have an audited statement from Bazemore, and beginning in March 1965 the bank had repeatedly demanded such a statement. On December 23 Bazemore furnished an unaudited statement dated November 29. It was materially false in many regards. Immediately, on December 24, American National wrote Bazemore with a copy to Stehling, expressed disappointment that the statement was unaudited, pointed out it omitted a liability, and called...
To continue reading
Request your trial
-
In re Samuels & Co., Inc.
...and the majority, under the same standard of reviewing the underlying facts pursuant to the plainly erroneous rule, Bazemore v. Stehling, 396 F.2d 701 (CA5, 1968), consider the facts as not in material dispute. I do not disagree with that 2 The majority opinion refers at one point to the fa......
-
Milliken Research Corp. v. Dan River, Inc.
...Cir.1981); In re Multiponics, Inc., 622 F.2d 709 (5th Cir.1980); Moore v. United States, 412 F.2d 974 (5th Cir.1969); Bazemore v. Stehling, 396 F.2d 701 (5th Cir.1968); Mt. Clemens Pottery Co. v. Anderson, 149 F.2d 461 (6th Cir.1945), modified sub nom., Anderson v. Mt. Clemens Pottery Co., ......
-
Multiponics, Inc., Matter of
...Master and may affirm the District Court's reversal only if we also deem the Master's findings clearly erroneous. Bazemore v. Stehling, 396 F.2d 701 (5th Cir. 1968). What this means is that such findings "come here well armed with the buckler and shield" of F.R.Civ.P. 52(a); Horton v. U. S.......
-
In re Harmer, Bankruptcy No. 81C-03791
...Norton, 11 B.R. 141 (Bky.D.Vt.1980); see also, 3 COLLIER ON BANKRUPTCY, ¶ 523-09, at 523-51 n. 5 (15th Ed.1984). 10 Bazemore v. Stehling, 396 F.2d 701, 703 (5th Cir.1968); Wylie v. Ward, 292 F.2d 590, 592 n. 5 (9th Cir.1961); Rogers v. Gardner, 226 F.2d 864, 867 (9th Cir.1955); Banks v. Sie......