In re Lesser , 234 F. 65 ( 1916 )

COXE, Circuit Judge.

The only question involved in this review is whether the false oath which bars the bankrupt’s discharge must be made in the pending bankruptcy proceeding. The bankrupt contends for the affirmative and the petitioner for the negative of this proposition. The District Judge followed the decision in the. Blalock Case (D. C.) 118 Fed. 679, in which it was held that the making of a false oath by a bankrupt in a proceeding in bankruptcy not against himself, but against a -corporation of which he was an officer, was not a sufficient ground for refusing his discharge. The judge says in his opinion:

“I am satisfied that although it is a crime to make any false oath in any proceeding in bankruptcy, it is not a ground for refusing a discharge unless the oath be made in the bankruptcy proceedings of the bankrupt himself.”

We are unable to agree with this ruling, principally for the reason that the statute contains no such limitation. Section 14b provides that:

“The judge * * * shall discharge the applicant unless he has committed an offense punishable by imprisonment as herein provided.” .

“As herein provided,” means as provided under the head of “Offenses” in Bankruptcy Act, § 29a. If a bankrupt applying for a discharge has committed an offense covered by section 29a, his discharge must be refused. It would be an absolute impossibility for him to commit some of these offenses in his own bankruptcy. One of the offenses punished by section 29a is the embezzlement by a trustee in bankruptcy of property belonging to the estate of the bankrupt. If the trustee is convicted of such embezzlement and subsequently becomes a bankrupt himself, he can, if the ruling of the District Judge is correct, obtain his discharge, notwithstanding his conviction under section 29a of an offense which section 14 declares is an absolute bar to a discharge. There is nothing in the act which confines the perjury which bars a discharge to that committed in the bankrupt’s own proceeding. On the contrary, many of the offenses conviction of which bars a discharge cannot, as before stated, be committed in the bankruptcy proceedings of the applicant for a discharge. We cannot think that the lawmakers intended a result so illogical as to permit a trustee, who .has embezzled the estate of the bankrupt placed in his care by the court, to file a petition of his own and procure a discharge, notwithstanding his crime, because it was committed in a bankruptcy proceeding other than his own. There is nothing compelling such a construction; on the contrary a harmonious and logical interpretation of the law forbids it. The construction urged by the bankrupt would eliminate entirely many of the offenses which the law says shall bar a discharge. He might be convicted in another bankruptcy proceeding of perjury, of presenting a false proof of claim, of receiving money from a bankrupt after petition filed against him, of extorting money from a person for acting or forbearing to act in bankruptcy proceedings; and yet he would receive his discharge if these crimes were committed in other bankruptcy proceedings and many of them could be committed only in other proceedings. It seems to us that the construction contended for by the bankrupt will defeat the intention of the lawmakers and involve the interpretation of the sections in question in inextricable confusion. We think that the intention of the lawmakers was to refuse a discharge to a bankrupt who has taken a false oath in any bankrupt proceeding. If he can commit perjury once and succeed he will be quite likely to attempt it again. The contention that the perjury must be committed in his own bankruptcy is contrary to the letter of he law and if sustained may lead to deplorable results.

The order is reversed and the District Court is instructed to permit an amendment to the third specification.