In the Matter of William Albert Talor, AKA William A. Taylor, Bankrupt Public Finance Corporation of Redlands v. William A. Taylor

514 F.2d 1370 In the Matter of William Albert TALOR, aka William A. Taylor, Bankrupt PUBLIC FINANCE CORPORATION OF REDLANDS, Appellant v. William A. TAYLOR, Appellee No. 73-2812 United States Court of Appeals, Ninth Circuit. April 18, 1975 Alvin O. Weiner, of Styskal, Wiese & Melchione, North Hollywood, Cal., for appellant. Marshall Miles, San Bernardino, Cal., Dan L. Renkins, Wallace L. Taggart, of Rankins & Taggart, Bloomington, Cal., for appellee. OPINION Before DUNIWAY and KILKENNY, Circuit Judges, and SOLOMON, * District Judge. KILKENNY, Circuit Judge: 1 Appellant creditor filed an application to determine the dischargeability of a debt owed it by appellee bankrupt, claiming the debt to have been fraudulently obtained under Sec. 17(a)(2) of the Bankruptcy Act, 11 U.S.C. Sec. 35 (a)(2). The bankruptcy referee found for appellant. Appellant petitioned for review, the district court sustained the referee's findings and conclusions, and this appeal follows. We affirm. FACTS 2 Appellee entered appellant's office in October, 1971, and applied for a consolidation loan in excess of $3,000.00. He had previously obtained credit from appellant in August, 1970, and July, 1971.…

Appellant creditor filed an application to determine the dischargeability of a debt owed it by appellee bankrupt, claiming the debt to have been fraudulently obtained under § 17(a)(2) of the Bankruptcy Act, 11 U.S.C. § 35 (a)(2). The bankruptcy referee found for appel-lee. Appellant petitioned for review, the district court sustained the referee’s *1372 findings and conclusions, and this appeal follows. We affirm.

FACTS

Appellee entered appellant’s office in October, 1971, and applied for a consolidation loan in excess of $3,000.00. He had previously obtained credit from appellant in August, 1970, and July, 1971. Appellee was asked by appellant’s agent to complete a form entitled “Statement for Purpose of Obtaining a Loan or Extension of Credit.” The form required a listing of the applicant’s other creditors, the nature of the other debts, and the amounts owed.

At the time of his loan application, appellee owed over $23,000.00 to other creditors, consisting, in part, of $13,-000.00 owing on a real property deed of trust. Appellee listed none of these debts on the statement. A significant factual dispute exists concerning what appellee was told by appellant’s agent to…

(concurring and dissenting):

I concur in part I of Judge Kilkenny’s opinion, dealing with . the burden of proof. However, I cannot agree with part II, which holds that the referee’s findings are not clearly erroneous. In my opinion, those findings are clearly erroneous.

In the leading case of United States v. United States Gypsum Co., 1948, 333 U.S. 364 at 395-6 , 68 S.Ct. 525 at 542 , the Court said this about the “clearly erroneous” rule (Rule 52(a), F.R.Civ.P.):

The government relied very largely on documentary exhibits, and called as witnesses many of the authors of the documents. Both on direct and cross-examination counsel were permitted to *1375 phrase their questions in extremely leading form, so that the import of the witnesses’ testimony was conflicting. On cross-examination most of the witnesses denied that they had acted in concert in securing patent licenses or that they had agreed to do the things which in fact were done. Where such testimony is in conflict with contemporaneous documents we can give it little weight, particularly when the crucial issues involve mixed questions of law and fact. Despite the opportunity of the trial court to appraise the credibility…