Wilensky v. Goodyear Tire & Rubber Co., 2831.

• Citation: 67 F.2d 389
• Decision Date: 10 November 1933
• Docket Number: No. 2831.,2831.
• Parties: WILENSKY v. GOODYEAR TIRE & RUBBER CO., Inc., et al.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

67 F.2d 389 (1933)

WILENSKY v. GOODYEAR TIRE & RUBBER CO., Inc., et al.

No. 2831.

Circuit Court of Appeals, First Circuit.

November 10, 1933.

Ralph Cohn, of Boston, Mass. (Bernard A. Riemer, of Boston, Mass., on the brief), for appellant.

Louis B. King, of Boston, Mass. (Friedman, Atherton, King & Turner, of Boston, Mass., on the brief), for appellees.

Before WILSON, MORTON, and HALE, Circuit Judges.

HALE, District Judge.

This case is before us on appeal by the bankrupt, James Wilensky, from the decree of the United States District Court, refusing him a discharge in bankruptcy. On objections to discharge the referee found that "the bankrupt conducted a transportation business in the name of a corporation called the Interstate Transit Company, of which he owned all the stock. In the name of the Interstate Transit Company the bankrupt applied to this objector for credit and to secure that credit he issued, in the name of the Interstate Transit Company, a statement in writing which was materially false in several important respects. The objector, in part reliance upon the statement in question, and in part reliance on the endorsement of the bankrupt, extended to the Interstate Transit Company the credit requested. It is clear to me that the bankrupt, by a materially false statement in writing, made for the purpose, obtained credit for his own benefit. I recommend that his discharge be denied."

After a hearing upon this report, the District Court decreed that the discharge be refused.

The assignments of error do not set out "separately and particularly, each error assigned and intended to be urged," as required by rule 11 of this court. It is apparent, however, that the appellant seeks to raise two questions, first, that although the referee found that the statement of the bankrupt relating to his credit was false, he did not find that it was intentionally false; and so did not bring the case within section 14b (3) of the Bankruptcy Act, 11 USCA § 32 (b) (3): and, second, that the referee did not find that the bankrupt himself issued a statement "respecting his financial condition."

The bankrupt has not met the burden of furnishing the court with a record of the testimony in this case. By the amendment of 1926 (11 USCA § 32 (b) (7), it is provided that if on hearing of objections to a discharge the objector shall show to the satisfaction of the court that there are reasonable grounds for believing that the bankrupt has committed any of the acts which under this paragraph would prevent his discharge in bankruptcy, then the burden of proving that he has not committed any such acts shall be upon the bankrupt. Brown's Guide. Appendix p. 16.

1. Section 14b (3) of the Bankruptcy Act (11 USCA § 32 (b) (3) provides that the court must discharge the applicant unless he has "obtained money or property on credit, or obtained an extension or renewal of credit, by making or publishing, or causing to be made or published, in any manner whatsoever, a materially false statement in writing respecting his financial condition." The courts have held that before refusing a discharge the court must be satisfied that the bankrupt's statement was knowingly and intentionally untrue.

In Gilpin v. Merchants' National Bank, 165 F. 607, 611, 20 L. R. A. (N. S.) 1023, speaking for the Circuit Court of Appeals for the Third Circuit, Judge Gray said:

"In other words, `false statement' connotes a guilty scienter on the part of the bankrupt. This primary and ordinary meaning of the word `false' cannot be ignored. It is the primary meaning given in the ordinary lexicons of the English language. Webster gives as its primary meaning: `Uttering falsehood; unveracious; given to deceit; dishonest.' As an adjective, it is correlative with the noun `falsehood.' To charge a person with making a false statement, is equivalent to charging him with uttering a falsehood, and imputes moral delinquency to the person so charged. * * * In Black's Law Dictionary, under the title `false,' it is said: `In law, this word means something more than untrue; it means something designedly untrue and deceitful, and implies an intention to perpetrate some treachery or fraud.' In a recent and well accepted publication called `Words and Phrases,' the word `false' is thus defined: — `False means that which is not true, coupled with a lying intent.' Wood v. The State, 48 Ga. 192, 297, 15 Am. Rep. 664. `False in jurisprudence usually imports something more than the vernacular sense of "erroneous" or "untrue."'"

In the case before us, the District Court based its action upon report of the referee who found that the bankrupt had obtained credit for his own benefit by a materially false statement in writing, "made for the purpose." It seems clear to us that this...