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IN RE FREUDMAN

June 1, 1954

In the Matter of Aaron S. FREUDMAN, Bankrupt


The opinion of the court was delivered by: DIMOCK

The bankrupt petitions for review of the referee's order denying his discharge and for review of the referee's order denying his motion for a new trial of the issue of his discharge. He urges that the referee erred as a matter of law in denying the discharge so that the discharge should be granted by this court and that, at the least, a new trial be granted.

The discharge was denied on the ground that the bankrupt has 'obtained money * * * on credit * * * by making * * * a materially false statement in writing respecting his financial condition' within the meaning of § 14, sub. c(3) of the Bankruptcy Act, 11 U.S.C. § 32, sub. c(3).

 The bankrupt obtained a loan from one Tenney after furnishing Tenney with a statement reading as follows:

 'Mr. Jerry M. Tenney '535 Fifth Avenue 'New York City

 'Re: Premises -- 223 E. 59th Street, New York City 'Dear Sir:

 'This is to advise you that the above premises, which are owned by Deena Edith Freudman, who is my mother, are hereby assigned to you.

 'I have authorization in writing, in recordable form to execute any deed or mortgage with respect to the above premises.

 'This is to further advise you that pending the repayment to you of the sum of $ 3600.00, which you have this day loaned to me, the above premises will not be transferable, conveyed or encumbered, or in any manner to become affected by any liens or encumbrances, and that all operating expenses, including taxes will be paid when due.

 'Furthermore, upon demand of deed to the premises or a mortgage thereto will be executed by me as attorney-in-fact, for the owner, in proper and recordable form.

 'It is understood also that this loan to me is made for and on behalf of the said premises with full notice and knowledge thereto by Mrs. Deena Edith Freudman, my mother, and that you rely upon the representation herein for the making of such loan.

 'This deed is to serve as additional security to that mentioned as per letter of May 24, 1951, from Aaron S. Freudman to Jerry M. Tenney. 'Dated: May 25, 1951.

 'Aaron S. Freudman'

 The writing, on its face, was a straightforward enough statement that the bankrupt had power to execute in recordable form a deed or mortgage of his mother's property and that she knew that he was assigning it as security for the loan from Tenney to him. The truth is that he had no such power and ...


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