In re Zoffer
| Decision Date | 10 February 1914 |
| Docket Number | 138. |
| Citation | 211 F. 936 |
| Parties | In re ZOFFER et al. |
| Court | U.S. Court of Appeals — Second Circuit |
James S. Lawson, of New York City, for appellants
S. S Leff, of New York City, for appellee.
Several specifications of objection to discharge were filed by creditors. It will be necessary to discuss only the two which were sustained. These are:
1. That the bankrupts obtained credit upon a materially false statement in writing made to R. G. Dun & Co.
2. That the bankrupts committed an offense punishable by imprisonment.
As to the first of these: The evidence shows that a representative of R. G. Dun & Co., a mercantile agency called at the bankrupt's store, announced that he was 'here again' and asked them what stock they had. They replied that they did not know; that they had not taken an inventory. He then asked them to give the figures approximately, and they did so. These he put down, and one of them signed the statement with the firm name in the presence of the other. The mercantile agency had not been requested by any customer to get this information for him; its representative made his inquiries in order to obtain a report upon which to fix credit rating in the books of the agency. It is not disputed that the signed statement falsely represented (among other things) that bankrupts had an equity of $12,500 in certain real estate omitting all reference to a third mortgage which substantially wiped out the $12,500.
The Bankrupt Act in force at the time in question provides (section 14b3) that discharge shall be refused if the bankrupt has--
'obtained money or property on credit upon a materially false statement in writing, made by him to any person or his representative for the purpose of obtaining credit from such person.'
It is contended that a general financial statement made to a commercial agency for the latter's purposes is not within the terms of the section above quoted. The special commissioner held that such 'contention is untenable as has been shown in several decisions among which are the following cases: In re Augspurger (D. C.) 25 Am.Bankr.Rep. 83, 181 F. 174, and In re Pinsker (D.C.) 25 Am.Bankr.Rep. 494. ' The District Judge sustained the special commissioner.
The effect of such statements to commercial agencies was considered by this court in Matter of Dresser & Co., 146 F. 383, 76 C.C.A. 655, and Matter of Russell, 176 F. 253, 100 C.C.A. 77. The clause of the section (14b3) then read as follows:
'obtained property on credit from any person upon a materially false statement in writing made to such person for the purpose of obtaining such property on credit.'
In the Russell Case we held that this clause did not include the ordinary statement of financial condition made to a mercantile agency for general circulation among its inquiring subscribers. The clause then in force was incorporated in the act by amendment in 1903. Our construction of its terms was largely influenced by the circumstance that the amendment, as it originally passed the House contained the words 'or of being communicated to the trade' which were struck out in the Senate; the House subsequently concurring in this modification of the amendment.
The section was again amended in 1910, subsequent to the decision of the Russell Case, and it is now contended that such amendment has operated to enlarge the clause sufficiently to cover these general financial statements. Examination of the proceedings in Congress disposes of such contention.
'obtained money or property on credit upon a materially false statement in writing, made by him to any person for the purpose of obtaining credit or of being communicated to the trade or to the person from whom he obtained such property or credit.'
In reporting this amendment to the House, the Judiciary Committee said:
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In re Slocum, 30.
...a material fact at the first meeting of creditors is not entitled to a discharge. In re Gaylord, 112 F. 668 (C. C. A. 2); In re Zoffer, 211 F. 936 (C. C. A. 2). Several grounds of objection were specified by the creditors, but only two were sustained by the special master. One of them alleg......
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Morris Plan Industrial Bank v. Finn, 321.
...have several times adopted the same construction — as was indeed inevitable — when the question arose upon a discharge. Possibly In Re Zoffer, 2 Cir., 211 F. 936 should not be taken as a ruling; but In Re Slocum, 2 Cir., 22 F.2d 282, 285, In Re Marshall, 2 Cir., 47 F.2d 209, and In Re Stein......
- British-American Tobacco Co. v. British-American Cigar Stores Co.
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J.W. Ould Co. v. Davis
... ... statement in writing made by him to any person or his ... representative for the purpose of obtaining credit from ... such person.' ... In the ... light of this legislative history it seems clear, as the ... Second Circuit Court of Appeals held in the Zoffer Case, 211 ... F. 936, 128 C.C.A. 434, that the amendment of 1910 cannot be ... construed to cover 'general statements to mercantile ... agencies, not specifically asked for by prospective ... creditors. ' Indeed, counsel for appellant frankly ... concede that the Davises are entitled to a ... ...