In re Marcus
| Citation | 253 F.2d 685 |
| Decision Date | 09 April 1958 |
| Docket Number | No. 181,Docket 24668.,181 |
| Parties | In the Matter of Pincus M. MARCUS, Bankrupt-Appellant. New York Credit Men's Adjustment Bureau, Inc., as Trustee in Bankruptcy of P. M. Undergarment Corp., Objecting Creditor-Appellee. |
| Court | United States Courts of Appeals. United States Court of Appeals (2nd Circuit) |
Curran, Mahoney, Cohn & Stim, New York City (Menahem Stim, New York City, of counsel), for bankrupt-appellant.
Seaver & Feigenbaum, New York City (Irving J. Seaver and Murray Feigenbaum, New York, City, of counsel), for objecting creditor-appellee.
Before HINCKS and LUMBARD, Circuit Judges, and GALSTON, District Judge.
The bankrupt, Pincus M. Marcus, appeals from an order of the District Court for the Southern District of New York (Bryan, J.) dated March 27, 1957, denying his discharge which had been granted by a Referee in Bankruptcy.
Marcus was adjudicated a bankrupt on his voluntary petition on September 30, 1955. Appellee, as trustee in bankruptcy of P. M. Undergarment Corp., was a judgment-creditor of Marcus and filed specifications of objections to his discharge. It had obtained a judgment of $88,000 against Marcus which was listed by Marcus in his schedules and represented more than one-half of his scheduled non-tax liabilities. P. M. Undergarment Corp. was adjudicated a bankrupt in 1953. Marcus was the sole stockholder, president and principal officer of P. M. Undergarment Corp.
In our view of the record, the main objection to the discharge of the bankrupt was on the ground that he had obtained property on credit by making a materially false statement in writing respecting his financial condition. The specification of objection1 averred that in October and November, 1952, Marcus obtained for P. M. Undergarment Corp. merchandise of the value of $28,413.78 from Cantor Greenspan Co., Inc. on credit by making and delivering to the latter a materially false statement in writing respecting the financial condition of P. M. Undergarment Corp., and that such statement was one respecting his own financial condition.
After the hearing on the objections the Referee rendered an opinion and made findings and conclusions in which he held that the specifications were not sustained, and he made an order discharging the bankrupt. Appellee petitioned for a review of the Referee's order. The District Court sustained the petition, reversed the Referee's order and denied the bankrupt's discharge.
Sec. 14, sub. c(3), Bankruptcy Act, 11 U.S.C.A., Chap. 3, Sec. 32, sub. c(3), is to the effect that the court shall grant the discharge unless satisfied that the bankrupt has obtained money or property on credit by making in any manner whatsoever a materially false statement in writing respecting his financial condition.
There seems to be no issue that the statement made by P. M. Undergarment Corp. under the signature of the bankrupt as president and supplied to the Cantor Greenspan Co., reciting the financial condition and physical inventory of P. M. Undergarment Corp. on and as of June 30, 1952, was a materially false statement. So the critical question in this proceeding is whether the false statement thus made was in fact a recital of the bankrupt's financial condition. It is no longer possible for a bankrupt to set up a smoke-screen so as to obscure the realities. Marcus was the owner of the Undergarment Corp. and made this materially false statement to get credit, knowing the statement to be false. It seems idle for him to contend that that has no bearing on the instant proceeding. In Judge Bryan's opinion he wrote 149 F.Supp. 503:
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In re Butler, 18257.
...the corporate veil. See Levy v. Industrial Finance Corp., 276 U.S. 281, 48 S.Ct. 298, 72 L.Ed. 572 (1928) (Holmes, J.); In re Marcus, 253 F.2d 685 (2 Cir. 1958); In re Leichter, 197 F.2d 955 (3 Cir. 1952), cert. denied Devorsky v. Leichter, 344 U.S. 914, 73 S.Ct. 336, 97 L.Ed. 705 (1953); I......
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In re Overmyer
...akin to piercing the corporate veil. Levy v. Industrial Finance Corp., 276 U.S. 281, 48 S.Ct. 298, 72 L.Ed. 572 (1928); In re Marcus, 253 F.2d 685 (2nd Cir.1958); In re Bernstein, 197 F.2d 378 (7th Cir.1952); Wilensky v. Goodyear Tire & Rubber Co., 67 F.2d 389 (1st Cir.1933). However, the o......
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In re Zaidins
...in the bankruptcy and is material to the administration of the estate. See In re Marcus, D.C.S.D.N.Y.1957, 149 F.Supp. 496, affirmed 2 Cir., 253 F.2d 685. Materiality is to be determined as of the time of the inquiry and by the matters then made the subject thereof. Wattenmaker v. United St......