Court Opinion

ID: 8790628
Source: CourtListenerOpinion
Date Created: 2022-11-26 13:49:45.268021+00
Date Added: 2024-06-11T17:03:19.893466
License: Public Domain

MAYER, District Judge
(after stating the facts as above). The objection to the discharge of the bankrupt is based on clause No. 3 of paragraph “b” of section 14 of the Bankruptcy Act, which provides that the bankrupt may be discharged unless he has—
”3. Obtained money or property on credit upon a materially false statement in writing, made by him to any person or his representative for the X>urpose of obtaining credit from such person.”
It is contended on behalf of the bankrupt that the objecting creditor alleges corporate acts to bar the bankrupt’s individual discharge; in other words, that the money obtained by the bankrupt as president of the corporation on notes of the ■ corporation indorsed by him, did not constitute money obtained by him within the meaning of the act, and that a materially false statement in writing as to the financial condition'of a corporation in which the bankrupt is interested, and by means of which statement the bankrupt obtains money or property on credit, is not a statement made “by him” within the meaning of the act. For the purposes of this decision, it is admitted that the bankrupt was to benefit financially by his representations as to the condition of a corporation in which he was' interested. The question then comes down to this: In'order to bar the discharge must the materially false statement in writing, made for his own benefit, be so made by the bankrupt only in respect of his own property, and must it be made by him in his capacity as an individual' as distinguished from his capacity as an officer of a corporation?
The precise question here to be determined has not been passed upon by the courts, although In re Dresser & Co. (D. C.) 144 Fed. 318, is’of some service in reaching a conclusion. It seems to me that the *393act is broad enough to comprehend a case in which the facts are as in the case at bar. Concededly the statement was in writing and materially false, and'money on credit was obtained as the direct result of the statement, and that money was obtained by the bankrupt for his own benefit. The materially false statement in writing was “made by. him” for all substantial purposes, and the fact that it was made because ’ he was president of the corporation, and that he signed with that designation or in that capacity, does not relieve him from the responsibility which'he undertook when he signed this statement in order to procure money on credit for his own benefit. The distinction between the bankrupt individual and the bankrupt as president of this corporation is, on the particular facts here conceded, too illusory to justify the close construction urged by the learned counsel for the bankrupt. Such a construction might well open the way to fraudulent transactions ; and where it may be argued that the phraseology itself, if lit-' erally taken, may be susceptible of one of two meanings, that construe-' tion should be adopted which the more likely meets the intent of the act as an instrument'in the conduct of business by honest methods.
For the reasons outlined, the exceptions are overruled.