In re Monson, 16699.

• Decision Date: 01 February 1955
• Docket Number: No. 16699.,16699.
• Citation: 127 F. Supp. 625
• Parties: In the Matter of Paul MONSON, Bankrupt.
• Court: U.S. District Court — Western District of Kentucky

127 F. Supp. 625

In the Matter of Paul MONSON, Bankrupt.

No. 16699.

United States District Court, W. D. Kentucky, at Louisville.

February 1, 1955.

Abraham & Guthrie, Louisville, Ky., for petitioner.

H. S. Robinson, Campbellsville, Ky., for bankrupt.

D. A. Sachs, Jr., Louisville, Ky., for trustee.

SHELBOURNE, Chief Judge.

This case is before the Court on a petition to review an order of the referee entered August 21, 1954, denying the petition of the Great Atlantic Shoe Company, Inc., an unsecured creditor of the bankrupt to reclaim certain merchandise, shoes, which the creditor had sold to the bankrupt on invoices beginning February 2, 1953 and extending down to and including a shipment September 24, 1953.

The trustee and the creditor have advised the Court that the creditor has identified among the assets of the bankrupt shoes which had been bought from the creditor within the above dates of the value of $1,484.03. The balance due by the bankrupt on date of adjudication was $3,063.90, after allowing the bankrupt credit for payments aggregating $2,103.74, made between August 3, 1953 and December 1, 1953.

The creditor's grounds for the claimed right to reclaim its merchandise, is that under date of February 26, 1953, Paul R. Monson, owner and proprietor of the Monson Department Store, gave to the creditor a signed credit statement, the heading of which is—

"Great Atlantic Shoe Company, Incorporated. Financial Statement of the Monson Department Store. For the purpose of obtaining merchandise from you on credit we make the following statement in writing, intending that you should rely thereon respecting our financial condition".

It was further stated in the credit statement that the statement had been carefully read and in all respects was complete, accurate and truthful and that should any change take place unfavorable to the financial condition therein stated, the Shoe Company would be given notice and the statement contained this further promise—

"Until such notice is given, you are to regard this as a continuing statement".

The material part of the statement was that the bankrupt had $6,000 cash in the bank, $3,000 machinery and fixtures; represented that a 1952 Studebaker Automobile was valued at $2,043, and that his liabilities were $583 indebtedness on the automobile.

From the evidence, the Referee has concluded that the statement was false in that the bankrupt did not have any money in the bank on the date of the statement, that the machinery and equipment referred to in the statement as being worth $3,000 could only have been certain lumber on hand, subsequently used for shelving and fixtures, worth at the outside $700 or $800; that the indebtedness on the automobile was substantially more than $583, Monson testified $927.28.

The Referee, I think, has correctly found the facts, at least the Court cannot say that they are materially erroneous. However, the Referee has given little consideration to the credit statement,...