Opinion
No. 906.
June 1, 1926.
A.H. Garner, of Joplin, Mo., for bankrupt.
D.S. Mayhew, of Monett, Mo., for First National Bank of Pierce City.
In Bankruptcy. In the matter of the bankruptcy of Edward M. Hatfield. On report of special master, to whom objections to discharge were referred. Report recommending discharge confirmed.
Objections were filed to the discharge of the bankrupt upon the ground that he had made false statements in writing for the purpose of obtaining credit. Upon such specification of objections the matter was referred to Hon. J.C. Ammerman, referee in bankruptcy of the Southwestern division of this court, as special master. Testimony was taken before the master, and his report has been filed recommending the discharge of the bankrupt. The master's report contains a finding of facts and his conclusions of law. According to the master the testimony failed to show that the bankrupt had made a false statement, and, moreover, that even so such statement was not designedly made for the purpose of deceiving complaining creditor.
An examination of the testimony fully sustains the finding of facts made by the special master. The statement alleged to have been made by the bankrupt was a financial statement, signed but not written by him at a time he was about to become surety on a note for $300 payable to the objecting creditor. Objector understood the circumstances under which said note was signed, and, although the bankrupt appeared as a joint maker, yet he was not so in fact.
The statement made by him at the time reflects with approximate accuracy the true condition of his own personal obligations. He was involved as an indorser or security on indebtedness which finally ripened into claims against him, but apparently such items were not then treated as indebtedness to be scheduled by the bankrupt. Moreover, no intent to defraud was shown, and this is essential under all the authorities. Collier on Bankruptcy (13th Ed.) p. 555.
In the case of Aller-Wilmes Jewelry Co. v. Osborn, 231 F. 907, the Circuit Court of Appeals, Eighth Circuit, specifically held that "a statement, to be materially false, so as to justify the refusal of a discharge to a bankrupt, * * * must be not only false in fact in a material matter, but must have been with the intention to deceive." This opinion has been followed and cited approvingly by the District Court of New Jersey in Re Perlmutter et al., 256 F. 862; also by the Circuit Court of Appeals, Seventh Circuit, in Re Gould, 275 F. 827.
The findings and conclusions of the special master were correct, and will be confirmed. It is so ordered.