Court Opinion

ID: 9461251
Source: CourtListenerOpinion
Date Created: 2023-08-04 22:09:39.458248+00
Date Added: 2024-06-11T17:36:57.971343
License: Public Domain

OAKES, Circuit Judge
(dissenting):
I agree with the majority that the bankrupt’s technical argument on time of filing objections borders on the absurd. But I fail to see the materiality of the bankrupt’s false statements made at the first meeting of creditors on April 16, 1971. Concededly he had no accounts receivable either on January 11, 1971, or on April 16, 1971. He is held to have stated falsely on April 16 that he did not tell the bank on January 11, 1971, that he did have certain accounts receivable consisting of specific customers of his in his capacity as a canned meat broker. Thus he is found to have stated to the bank on January 11, and this would be his first falsehood, that he did have several specific accounts receivable. The bank concededly did not rely on that first falsehood in extending credit, nor did it do so by neglecting to enforce its loan agreement. By virtue of the fact that his petition was filed on March 3, moreover, any preference achieved by such enforcement would have been set aside. Thus, in any possible end result it is immaterial whether the bankrupt made the false statement to the bank on January 11. Can it be said, then, that his false denial on April 16 of having made an immaterial statement in January has any real bearing?
To say that “materiality does not require a showing that the creditors were prejudiced by the false statement,” as the majority says (opinion at 1188), however, is not to say that every statement under oath is material. The majority goes on to argue that counsel for the bank had a right to inquire into what had happened to the bankrupt’s “recently claimed accounts receivable” when the petition showed none such. I agree with that proposition; when the bankrupt testified that he- had none in April and that he had had none in January, however, it is difficult to fathom what information could be gleaned from forcing him to admit that he had lied in January about having these specific accounts receivable. All that a truthful answer in April would have led to was an admission of his lying in January. The January falsehood was not made under oath during bankruptcy proceedings and thus would not itself have been grounds for denial of the discharge.
But even if the bank might otherwise have “had a legitmate interest in trying to find out what had become of Robinson’s recently claimed accounts receivable,” in the majority’s words (opinion at 1188), testimony by the bank’s Zone Supervisor, Mr. George Sheldon, showed that within two days after the meeting of January 11 the bank “had done some ‘checking’ and had found we could not confirm any of the receivables” and in*1190deed had so “advised Mr. Robinson,” the bankrupt, on January 13 (App. 244).1 This being true, it is difficult to see what the purpose of the line of questioning was, other than to get the bankrupt to deny that he had previously told a lie and in the process to tell another one so as to effectuate the denial of his discharge. The purpose could not have been to track down “recently claimed accounts” since the bank knew that none existed in April or in January.
If I am correct that the bankrupt’s testimony, assumed to be false, is nevertheless not material, the question of law becomes whether materiality is a necessary element of proof for a conviction under 18 U.S.C. § 152 which in turn, under the Bankruptcy Act, § 14(c)(1), 11 U.S.C. § 32(c)(1), is grounds for a denial of a discharge. Section 152 of 18 U.S.C. specifically spells out the various acts in connection with bankruptcy such as fraudulent concealment of assets, presentation of false claims against the estate, receipt of property from a bankrupt and the like — including “knowingly and fraudulently mak[ing] a false oath or account . . .” — that are criminal offenses.2
The case law is now and, as I have understood it, always has been, that materiality is an essential ingredient— even though materiality is not dependent on actual injury to creditors. Metheany v. United States, 365 F.2d 90, 93 (9th Cir. 1966), 390 F.2d 559 (9th Cir. 1968), cert. denied, 393 U.S. 824, 89 S.Ct. 81, 21 L.Ed.2d 94 (1968); Meer v. United States, 235 F.2d 65, 67 (10th Cir. 1956); United States v. Margolis, 138 F.2d 1002, 1004, 1005 (3d Cir. 1943); In re Slocum, 22 F.2d 282, 284, 285 (2d Cir. 1927). See also 1A Collier, Bankruptcy (14th ed.) ¶ 14.25 at 1338; In re Lozito, 113 F.2d 764 (2d Cir. 1940); In re Taub, 98 F.2d 81 (2d Cir. 1938). As was said in In re Steiker, 380 F.2d 765, 768 (3d Cir. 1967):
A false oath knowingly and fraudlently made, however, is not all that must be established. It must also be shown that the false oath was given in relation to some material matter in the bankruptcy proceedings. In re Kaufhold, supra; Hanover-Capital Trust Co. v. Meyer, 57 F.2d 815 (C.A. 3, 1932); 1 Collier, Bankruptcy 14.-25 at 1324, 7 Remington, Bankruptcy § 3086; Annot., 59 A.L.R.2d 791, 831 (“Materiality”) (1958). It has been said that the determination of whether the false oath is material depends on whether the inquiry bears a relationship to the bankrupt’s business transactions or his estate, Willoughby v. Jamison, 103 F.2d 821, 824 (C.A. 8), cert. denied, 308 U.S. 588, 60 S.Ct. 111, 84 L.Ed. 492 (1939), or concerns the “discovery of assets, business dealings, and relations of the bankrupt, the existence and disposition of *1191his property and debts and the like.” 7 Remington, Bankruptcy § 3086.
(Footnotes omitted.)
I will agree that courts must be careful not to overlook consciously false statements that could in some way affect the outcome of the bankruptcy, the presentation or proof of a claim, the discovery of an asset, or the like. I fail to see how this bankrupt’s statements, denying his earlier misstatement but correctly describing his business, could have had any bearing on any aspect of the estate, given the record here.
Accordingly, I would reverse.

. In light of the majority’s statement on page .1188 of the opinion that “the bank knew it was possible that some amounts were owing” in January, 1971, it is interesting to note that the bank’s attorney asked no questions whatsoever as to the whereabouts of those assets “possibly owing.” He did ask what happened to the accounts receivable owing in 1970, the last year the bankrupt said that he had accounts owing. As to the accounts of 1971, the bank’s attorney’s questions dealt exclusively with the bankrupt’s past statements, not with his accounts receivable. At one point he even made this clear by telling the bankrupt, “I’m asking not whether it [an account receivable] was in fact outstanding, Mr. Robinson. I’m asking whether you told Mr. Spitzmiller it was outstanding.” App. 102.

. I put to one side the suggestion of the majority that the false oath provision cannot be construed to require for conviction a diminution of the value of the bankrupt’s estate since it would “track the requirements” of the first, or concealment-of-asset, clause. While I disagree with the argument since concealment of assets and diminution of value are by no means synonymous, this dissent does not stand or fall on the question whether diminution or concealment of assets is involved. Rather I believe the question is whether materiality is an element of the of- ' fense.