The Federal Reporter with Key-Number Annotations, Volume 250: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, August-October, 1918. Page: 993
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IN RE KERNER
the District Court based their conclusions. After hearing it discussed
in argument and considering the briefs and record, our opinion fully
accords with that of the District Court. The contract was one where
the vendor looked to an independent way of making a settlement of the
debt of the corporation. She had not only the promise of the corpora-
tion to pay money with interest to her at a future time, but she had
the right to exchange her investment certificates for unimproved realty
held for sale by the corporation. This contract was valid, and the right
given to appellant could have been availed of. She accepted interest
payments, and taking it as proven that she understood her rights of
exchange under the contract, we fail to see how she can hold a vendor's
lien. The whole scheme, which involved sale of certificates amount-
ing to hundreds of thousands of dollars, seems to have been to build
a common fund which would give value to all investment certificates,
and to put all investors on an equal footing in respect to interest and
dividends and the liability that the unimproved property could be ex-
changed for certificates. Appellant went into the scheme as an investor,
received her certificate, had direct interest in possible profits, and had
the right of exchange already referred to. Royal Con. M. Co. v. Royal
Con. Mines, 157 Cal. 737, 110 Pac. 123, 137 Am. St. Rep. 165; In re
V. & M. Lumber Co. (D. C.) 182 Fed 235.
If the corporation had made large sums, appellant would have made
a handsome profit; unfortunately, it drifted to failure, and her contract
seems worthless in fact. But equity cannot relieve her of her contract
which she freely made.
In re KEIRNER.
(Circuit Court of Appeals, Second Circuit. April 10, 1918.)
1. BANKRUPTCY X=407(5)-REFUSAL OF DISCIrARCE-F&LSE FINANCIAL STATE-
Under Bankruptcy Act, 14b, as amended by Act Feb. 5, 1903, c. 487,
4, and Act June 25, 1910, c. 412, 6 (Comp. St. 1916, 9598), prohibiting a
discharge where the applicant has obtained credit on a materially false
statement in writing, a financial statement, made by the bankrupt as a
basis for credit, which omitted from the assets certain merchandise and
from the liabilities the amount due thereon, held not so materially false
as to warrant denial of discharge and furnish ground for objection to a
2. APPEAL AND ERROR @=761-BRIEFS-RULES-AUTHORITIES.
Counsel, desiring an examination of cases referred to, should comply
with rule 37 (235 Fed. xi, 148 C. C. A. xi), requiring citations of Federal
Cases to be accompanied by the citation of the original report. and, where
citation is made from American Bankruptcy Reports, that citation in the
Federal Reporter or in the United States Supreme Court Reports should
Hough, Circuit Judge, dissenting.
: :For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes
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The Federal Reporter with Key-Number Annotations, Volume 250: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, August-October, 1918., legislative document, 1918; Saint Paul, Minnesota. (digital.library.unt.edu/ark:/67531/metadc38821/m1/1008/: accessed September 26, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.