In re Terens, 172 F. 938

In re Terens

172 F. 938 | E.D. Wis. | 1909

QUARLES, District Judge

(after stating the facts as above). Section 14b of the bankruptcy act (Act July 1, 1898, c. 541, 30 Stat. 550 [U. S. Comp. St. 1901, p. 3427]) provides in substance that obtainingproperty on credit from any person upon a materially false statement in writing, made to such a person for the purpose of obtaining such property on credit, shall be a bar to a discharge. It is contended by the bankrupt that, as the alleged false property statement was not made within the four months period, it therefore furnishes no just ground for objection. This doctrine seems to have been laid down by Mr. Brandenberg in his work on Bankruptcy (section 370), but no precedent is cited to sustain the text. It will be observed that Congress, in framing the third subdivision of section 14b, has not prescribed any limitation of time. This supposed omission cannot be attributed to oversight, because in the fourth subdivision of the same-section such limitation is expressly prescribed. Of course, the court, cannot interpolate a condition which Congress, saw fit to omit. I3y a careful reading of the text, however, it would appear that the bar to¡ l he discharge is not the making of such false statement, but the obtaining of property on credit based upon such written statement.

It is matter of common knowledge that such property statements are frequently intended as a continuing representation for indefinite periods of time. I am of opinion that the date of the statement is ira-*940material, if property has in fact been obtained upon the strength of it within the four months period, as is the case here. We are not called upon to decide whether under any circumstances the four months limitation can be read into the third subdivision of section 14b, and mere1 ly hold that, where goods have been furnished and credit has been extended on the strength of such statement within four, months of the bankruptcy; the date of the property statement should be held immaterial. There is no question here about the falsity or- materiality of the representation. The bankrupt testified that he had nothing to do with the financial part of the business, and relied upon his partner for information as to everything shown by the books ;• but the bankrupt admits that he was well aware, at the time he signed his statement, that the firm was indebted to the Bank of Two Fivers in a considerably amount, although he might not have had the exact amount in mind.

It is urged that this property statement was considered by the parties as a mere matter of form, and that it was so designated by.the agent of the Harvester Company at the time; that the bankrupt had no intention to defraud the Harvester Company, and was guilty of nothing-more than negligence or carelessness in signing a paper without due consideration. These suggestions cannot, however, be accepted by the court in extenuation. The clause of the bankruptcy act that we are considering does not require that the false property statement shall have been made with any definite intention to defraud, or with 'any specific intent. Re Gilpin (D. C.) 160 Fed. 171.

Neither is the result changed by the fact that the credit was extended to the copartnership. Re Dresser (D. C.) 144 Fed. 318.

It therefore becomes unnecessary to consider whether the evidence makes out a technical case of embezzlement against the bankrupt, and also unnecessary to consider certain other legal questions that were mooted at the hearing.

The first objection must be sustained, and discharge denied accordingly.