In re Freeman

Medical Finance Corporation has petitioned for a review of the Referee’s order discharging the bankrupt. The petitioner is a creditor who objected to the discharge of the bankrupt on the ground that the bankrupt obtained money and property from the Aetna Finance Company by making and publishing a false financial statement. 1

It is undisputed that the bankrupt obtained a renewal or extension of a loan from Aetna 2 at a time when there *438 was an outstanding judgment against him in favor of the objecting creditor, in the amount of approximately $2,000. Nor is it disputed that he did not list this indebtedness on the financial statement given to Aetna. Only three creditors were listed on this financial statement followed by the notation, “This is all we owe on bills.”

Even where there has been a false financial statement, a discharge will not be denied unless there was reliance on the statement. Where it is shown that a false financial statement has been made, the burden is on the bankrupt to show that there was no reliance on the statement. Morris Plan Industrial Bank v. Parker, 1944, 79 U.S.App.D.C. 164 , 148 F.2d 665 ; In re Savarese, D.C.N.Y.1944, 56 F.Supp. 927 ; In re…