Samet v. Farmers' & Merchants' Nat. Bank of Baltimore

• Decision Date: 12 December 1917
• Docket Number: 1541.
• Citation: 247 F. 669
• Parties: SAMET v. FARMERS' & MERCHANTS' NAT. BANK OF BALTIMORE.
• Court: U.S. Court of Appeals — Fourth Circuit

247 F. 669

SAMET v. FARMERS' & MERCHANTS' NAT. BANK OF BALTIMORE.

No. 1541.

United States Court of Appeals, Fourth Circuit.

December 12, 1917

Bernhard Cline, of Baltimore, Md., for appellant.

Edward Duffy, of Baltimore, Md., for appellee.

Before PRITCHARD and WOODS, Circuit Judges, and CONNOR, District judge.

WOODS Circuit Judge.

August Samet, who was adjudicated a bankrupt on March 14, 1916 appeals from a decree refusing him a discharge on the objection of the Farmers' & Merchants' National Bank one of his creditors. The objection was founded on section 14b (3), which provides against the discharge of the bankrupt if he '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. ' The evidence that a statement known to be false was made by Samet to the bank was conclusive. The serious question is whether upon the statement he obtained 'money or property on credit.'

From time to time the bank had discounted Samet's notes. On February 26, 1915, the aggregate indebtedness to the bank represented by notes was $4,400. On that day Samet made a written statement to the bank as a basis of credit showing on January 15, 1915, a stock of goods of the value of $10,993.92, and good accounts due to the amount of $9,871.08. The evidence showed clearly that the bankrupt could not have failed to know that neither the goods nor the accounts were worth more than half of the valuation stated. On the faith of the statement the bank on February 26, 1915, and on subsequent days, allowed Samet to give new notes in the place of the old as they matured, crediting him with the amount of the new notes less the discount and taking his check for the old notes. The checks given in payment exceeded the new notes; so that at the date of the bankruptcy Samet owed $3,600, less by $800 than on the day he made the statement. At various times, however, when these transactions took place, there was a balance to the credit of Samet which the bank had a right to apply to the matured notes. Thus it appears that the specific thing which Samet obtained from the bank at the maturity of each note by means of his false statement was a note already due, by substituting for it a new note due at a future time.

If when Samet took up the old note by giving his check for it and then rediscounted the new note to provide for the payment of the check, the intention was to pay and not renew the old note, evidently that would be a transaction in which Samet obtained money for the...