Robinson, In re

• Decision Date: 08 November 1974
• Docket Number: D,No. 45,45
• Citation: 506 F.2d 1184
• Parties: In the Matter of Jack ROBINSON, Bankrupt. ocket 74-1351.
• Court: U.S. Court of Appeals — Second Circuit

Page 1184

506 F.2d 1184

In the Matter of Jack ROBINSON, Bankrupt.

No. 45, Docket 74-1351.

United States Court of Appeals, Second Circuit.

Argued Sept. 25, 1974.

Decided Nov. 8, 1974.

Donald P. Sheldon, Buffalo, N.Y. (Saperston, Wiltse, Day & Wilson and Thomas F. Segalla, Buffalo, N.Y., on the brief), for appellant, Jack Robinson.

William H. Gardner, Buffalo, N.Y. (Hodgson, Russ, Andrews, Woods & Goodyear, Buffalo, N.Y., on the brief), for appellee, Manufacturers and Traders Trust Co.

Before LUMBARD, FEINBERG and OAKES, Circuit Judges.

LUMBARD, Circuit Judge:

Jack Robinson appeals from an order dated January 15, 1974, of the District Court for the Western District, John T. Curtin, J., affirming a denial of his discharge in bankruptcy upon findings by Beryl E. McGuire, Referee in Bankruptcy. Robinson filed a voluntary petition in bankruptcy on March 3, 1971, which stated his business to be that of a canned meat broker. The petition listed liabilities of $109,640.06 and non-exempt assets of $800. At a creditors meeting on April 16, 1971, Robinson denied under oath that he had made certain statements in January 1971 to Robert F. Spitzmiller, Jr., an assistant vice president of the Manufacturers and Traders Trust Co. of Buffalo, the appellee. On June 8, 1971, the last day for filing objections to Robinson's discharge, the bank filed such objections and petitioned for a determination of whether discharge was appropriate. After three hearings the referee concluded that Robinson had given false testimony and denied Robinson's discharge. The district court affirmed the referee's decision, whereupon Robinson appealed to this court. We affirm.

I.

Robinson raises two issues on appeal. First, he claims that the bank failed to file timely its objections to his discharge. The last day of filing objections was June 8, 1971, and the bank filed its objections along with a petition for determination of dischargeability on that day. However, it did not pay the required filing fee of $10 for each document until the following day. The bank did, however, submit a $50 check on June 8th as indemnity against expenses in production of the record. Robinson argues that the late payment of filing fees somehow delays the effective date of the filing until June 9th. We do not agree.

There is no express statutory requirement that a filing fee must be paid before objections can be considered to have been timely filed. Robinson's argument is largely based on the fact that the Bankruptcy Act provides that the initial filing fees required of a bankrupt must be paid before a discharge is granted, Bankruptcy Act 14(b)(2), 11 U.S.C. 32(b)(2) (1970). However, the usual procedures followed with respect to payment of the initial filing fee undercut Robinson's argument, because even where the bankrupt fails to pay the initial filing fee, the bankruptcy process still goes forward. See United States v. Kras, 409 U.S. 434, 488-489, 93 S.Ct. 631, 34 L.Ed.2d 626 (1973).

Furthermore, even if Robinson is correct in asserting that payment of filing fees is a prerequisite for an effective filing, it is arguable in this case that the fees were in fact paid on June 8th. On that date the bankruptcy court had in its possession the bank's check for $50 and it appears that that check could have been used to pay the filing fees.

Further support for rejection of Robinson's argument is found in the 1972 revision of the Manual of Office Procedures for Bankruptcy Clerks ¹ which provides that 'where . . . papers are offered for filing without the proper fee, they should nevertheless be accepted for filing and a notation made on the paper itself that the filing fee has not been paid. The matter should then be called to the referee's attention.' Thus it appears that the normal practice of bankruptcy courts is to accept papers for filing whether or not filing fees have been paid.

Finally, we note that the purpose of a filing deadline is to bring the bankruptcy proceeding to an end and to permit an expeditious determination of whether there is any reason why the bankrupt should not be discharged. Here this purpose was fully accomplished by the bank's act of filing its objections within the required time period. Whether the filing fees were paid on that day, the next day or the next week does not effect the fulfillment of the deadline's purpose. Accordingly, we hold that the objections were timely filed.

II.

Robinson's second claim is that the district court erred in sustaining the referee's refusal to issue a discharge. The referee had concluded that Robinson had knowingly and fraudulently made a false oath in a bankruptcy proceeding. Under the Bankruptcy Act such a false oath is a ground for denying a discharge. Bankruptcy Act 14(c), 11 U.S.C. 32(c) (1970); ² 18 U.S.C. 152 (1970). ³ Under the Act the person objecting to the discharge must 'show to the satisfaction of the court that there are reasonable grounds for believing that the bankrupt has committed (one of the acts that bar discharge).' Bankruptcy Act 14(c), 11 U.S.C. 32(c) (1970). Once the person opposing the discharge has done this, the burden of proving that he has not committed (one of those acts) shall be upon the bankrupt.' Bankruptcy Act 14(c), 11 U.S.C. 32(c)(1970).

In the Second Circuit we have held that 'the words of the statute requiring that the testimony be given 'knowingly and fraudulently' mean no more than an 'intentional untruth in a matter material to the issue which is itself material." In re Melnick, 360 F.2d 918, 920 (2d Cir. 1966) (per curiam) quoting In re Slocum, 22 F.2d 282, 285 (2d Cir. 1927). Great weight is given to the referee's findings because he saw and heard the witnesses and his findings are not to be reversed unless they are clearly erroneous. In re Melnick, supra.

The testimony in question was given at an adjourned session of the First Meeting of the Creditors of the bankrupt which was held on April 16, 1971. At that proceeding Robinson was asked several questions concerning statements he allegedly made to officers of the bank in January 1971. At the subsequent hearing on the bank's objections to Robinson's discharge Spitzmiller testified that Robinson had told him in January that he had some $50,000 in accounts receivable. On April 16, however, Robinson denied that he had made such statements when he was asked by the bank's counsel about each alleged account receivable.

Robinson claims that his statements were not intentional untruths because he did not understand the questions that he was asked. While it is true that at times Robinson seemed confused as to whether he was being asked if he had told the bank in January that he had accounts receivable or if he had accounts receivable in January, ⁴ other parts of the exchange between Robinson and the bank's attorney show that Robinson did understand the questions. ⁵ The referee concluded that the bank 'established by a fair preponderance of the evidence that the bankrupt knowingly and fraudulently gave false testimony in this proceeding' and that Robinson's disclaimers were not credible. The record supports the referee's findings. In re Melnick,supra. The cases cited by Robinson do not support his contention that he lacked the requisite fraudulent intent. These cases generally involved failures of bankrupts to list inconsequential property interests on their schedules of assets. The court inferred that there was no fraudulent intent because the amounts involved were so small. See, e.g., In re Tabibian, 289 F.2d 793, 797 (2d Cir. 1951); In re Taub, 98 F.2d 81 (2d Cir. 1938). Robinson's testimony concerned thousands of dollars in alleged accounts receivable and Robinson was closely examined as to each alleged account. It is simply not reasonable to conclude that his false statements were unintentional.

Robinson's principal argument is that his misstatements did not concern a material matter. He argues that his false statements were immaterial for two reasons. First, he notes that the bank did not rely to its detriment on his claims of accounts receivable since all of the $35,000 owed by Robinson to the bank had been advanced prior to January 1971. This argument is irrelevant because the false testimony at issue here is not the statements that Robinson allegedly made to the bank, but rather his denials under oath at the bankruptcy proceeding that he made those statements to the bank. Robinson's discharge was not denied because he testified falsely to the bank in January, but rather because he testified falsely in the bankruptcy proceeding in April. It is the materiality of his testimony in April that is at issue and its materiality must be judged by the situation at the time that it was made.

Robinson's second argument is that his false statement was immaterial because a true statement on his part would not have benefited his creditors. He claims that even if he admitted that he had told the bank he had accounts receivable in January, his creditors would not have received any more money.

We have consistently held, however, that materiality does not require a showing that the creditors were prejudiced by the false statement. See Morris Plan Industrial Bank v. Finn, 149 F.2d 591, 952 (2d Cir. 1945); In re Slocum, 22 F.2d 282, 285 (2d Cir. 1927) ('The materiality of the false oath will not depend upon whether in fact the falsehood has been detrimental to the creditors.'). See also In re Melnick, supra; In re Parsons, 88 F.2d 428 (2d Cir. 1951).

Even though truthful responses to the questions propounded by the bank's counsel would not have increased the value of the bankrupt's estate, they were certainly material to discovering what, if any, assets Robinson may have had. In January 1971 Robinson apparently told the bank that he had accounts receivable in excess of $50,000. When he filed his petition in bankruptcy less than two months later, Robinson claimed that he had no accounts receivable. The bank, as...