Fidelity & Deposit of Maryland v. Arenz, 290 U.S. 66 (1933)

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Fidelity & Deposit of Maryland v. Arenz

No. 1

Argued October 10, 1933
Decided November 6, 1933
290 U.S. 66

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE NINTH CIRCUIT

Syllabus

1. By means of materially false written statements in respect to his financial condition, a contractor induced a surety company to execute a surety bond conditioned on his performance of a state highway contract. Upon default by the contractor, the surety became obligated upon a judgment obtained against them jointly by one who had furnished labor and materials entering into the work. The surety paid and took an assignment of the judgment. The contractor subsequently was adjudged bankrupt, and upon his application for discharge from his debts, including that due the surety, the latter filed objections.

Held:

(1) The obligation of the surety according to the terms of the bond to pay the contractor’s debt was "property" within the meaning of § 14 of the Bankruptcy Act, as amended (11 U.S.C. § 32(b)(3)) barring discharge where the bankrupt "obtained money or property on credit . . . by making . . . a materially false Statement in writing respecting his financial condition." P. 69.

(2) The bankrupt obtained, and the surety gave, the bond and obligation "on credit " within the meaning of the section. P. 69.

(3) The application for discharge should have been denied. P. 70.

2. The word "property," when used without qualification, may reasonably be construed to include obligations, rights, and other intangibles, as well as physical things. P. 68.

61 F.2d 607 reversed.

Certiorari, 288 U.S. 597, to review a judgment affirming an order of the District Court granting a discharge in bankruptcy.