Court Opinion

ID: 6835374
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:03:50.679813+00
Date Added: 2024-06-11T16:04:41.151220
License: Public Domain

L. HAND, Circuit Judge
(dissenting). The specification for issuing a false financial statement on March 1st appears to me amply proved in two particulars; the amount of the inventory, and.of the bills payable. The January inventory as contained in the books was about $44,000, and was shown by bookkeeping which was not challenged to have remained for 30 days about the same. The inventory put into the issued statement was $62,000. Here was a discrepancy of over $17,000, that nobody attempts to explain, except by the word of a not impressive witness, that the January inventory was “incorrect.” In what respects it was incorrect, we are not told; no details are given; no verification offered; no substitute figures suggested. The stark assertion is all we have; itself a most improbable one. But this is not all. That very inventory was used on March 15th, or shortly before, in an income tax return, after its putative incorrectness had admittedly been discovered. Even in June, when the bookkeeper who made it up came back to the shop, she did not try to change it. How there can be any fair doubt, in the face of such proof, that this item was deliberately false, I cannot conceive.
As to the item of bills payable I need say no more than that there is no escape from the conclusion that at least $8,000 of the Uknity goods must have been sold before February 1st. If not, why give $8,000 of acceptances? The fact that the acceptances may not have been due, or not finally passed by the seller, is quite immaterial. When the goods were sold, debts arose which ought to have been included. The explanations or attempts at explanation seem to me trivial. Thus there is a discrepancy of over $25,000 in the statement. That, coupled with the bankrupt’s shifty testimony, of a kind familiar enough, satisfies me that we have here to do with the usual ease of a dishonest trader, who ought not to get his discharge, no matter however many of his creditors are willing to take their pittance.
Nor can I see that it makes any difference that the bankrupt paid off more on his accounts with the objecting creditors after they got the statement than the value of what he received during that period. It has been held again and again that a creditor may rely on other things, so long as he in fact relies on the statement. There seems to me no reason to doubt that in this case it was one of the factors on which they did rely. I should so hold, even if it were proved that they would have lent or sold without the statement. It is enough if they believed it, and if it in any part actuated their conduct.
I dissent.