Robinson v. J.R. Williston & Co., 1440.

• Decision Date: 30 August 1920
• Docket Number: 1440.
• Citation: 266 F. 970
• Parties: ROBINSON v. J. R. WILLISTON & CO. In re ROBINSON.
• Court: U.S. Court of Appeals — First Circuit

266 F. 970

ROBINSON v. J. R. WILLISTON & CO.

In re ROBINSON.

No. 1440.

United States Court of Appeals, First Circuit.

August 30, 1920

Alvah L. Stinson, of Boston, Mass., for appellant.

Lee M Friedman, of Boston, Mass. (Percy A. Atherton and Friedman &amp Atherton, all of Boston, Mass., and Thomas P. McKenna, of New York City, on the brief), for appellees.

Before BINGHAM, JOHNSON, and ANDERSON, Circuit Judges.

JOHNSON Circuit Judge.

The bankrupt was denied a discharge on the ground that he had 'obtained money or property on credit upon a materially false statement in writing made by him' to the appellees who were his creditors, for the 'purpose of obtaining credit from them.' Other grounds of objection to the bankrupt's discharge were that he had, 'with intent to conceal his financial condition, destroyed or concealed such records as he had, returned checks, duplicate bank deposit slips, receipted bills, and other books, documents, letters, papers, or memorandum from which said condition might be ascertained,' and that he had committed an offense punishable by imprisonment under the acts of Congress relating to bankruptcy.

Both the referee and the learned judge of the District Court have found that none of these objections were sustained by the evidence. We are satisfied with these findings. In regard to the objection based upon the bankrupt having made a 'materially false statement in writing,' the referee and District Judge were not in accord, the referee having found that a check given by the bankrupt to J. R. williston & Co., drawn upon the International Trust Company of Boston, where he had no funds and his account was overdrawn, was not a 'materially false statement in writing,' contemplated by the Bankruptcy Act, and the learned judge having found that a check given under these conditions constitutes a 'materially false statement in writing.' Both have found that the bankrupt obtained money or property on credit by means of said check, and that it was given to J. R. Williston & Co. for the purpose of obtaining credit from them.

The question presented for our consideration, and the only one which we find it necessary to consider, is whether the giving of a check upon a bank in which the account of the maker has been overdrawn constitutes a 'materially false statement in writing,' as contemplated by the act, so that his discharge should be denied him.

The legislative history of the amendment of 1910 to the Bankruptcy Act, by which section 14b 3 (Comp. St. Sec. 9598), was inserted in its present form, shows that Congress had in mind by a 'materially false statement in writing' the statement of the debtor's financial condition which he might make for the purpose of obtaining money or property upon credit. The House of Representatives adopted in 1910 an amendment which would make general statements in writing made to mercantile agencies, if materially false, a bar to the discharge of the bankrupt; but the Senate refused to concur in this amendment, and substituted an amendment of its own, in which the House concurred, and which is as follows:

'Or (3) obtained money or property upon 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.'

In its report the Senate Judiciary Committee stated that it considered the House amendment too harsh, and that 'any tendency to make the Bankruptcy Act unduly harsh is to be avoided.'

We agree with the learned District Judge that a 'materially false statement in writing' cannot be confined to a financial statement made by the bankrupt, or a statement of his financial condition, and that it may include any 'materially false statement in writing' made by the bankrupt for the purpose of obtaining money or property on credit and by which said property or money is obtained; but we think such false statement should not be created by inference alone from acts of the bankrupt.

In re Oliner et al. (C.C.A. 2d Circuit) 262 F. 734, the following headnote is fully sustained by the opinion:

'The provision of Bankruptcy Act, Sec. 14b (3), Comp. St. Sec. 9598, authorizing

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