Proofs required on reclamation.

or in the converted form is in the possession of the receiver or trustee.

§ 92. Proofs required on reclamation.

The proofs must be "clear." What the decisions mean by this requirement, is that the court will not release goods on a reclamation petition unless the testimony proving the fraud is of a character such as will satisfy the mind. Proof that the debtor knew of his insolvency at the time of the purchase in question, will not be sufficient. There must be, in addition, a false representation regarding debtor's financial condition by which the seller was deceived.1

Petitioner must likewise prove that the receiver or trustee has the property sought to be reclaimed, or that such property may be traced in its original or converted form. If it has been commingled in a common mass so as to be indistinguishable, the reclamation petition must fail.

8. See unofficial form No. 366, Collier on Bankruptcy (13th ed.).

9. In re Murphy-Burke Shoe Co., 11 Am. B. R. 428; In re O'Connor, 112 Fed. 666, 7 Am. B. R. 428.

1. In re Berg, 183 Fed. 885, 25 Am. B. R. 170.

CHAPTER VIII.

ISSUING A FALSE FINANCIAL STATEMENT AS CONSTITUTING A CRIME.

Section 93. "False pretense" statute held to apply to false financial statements in some states.

94. "False pretense" statute held not to apply to false financial statements.

95. False financial statement statutes.

96. False financial statement law in addition to "false

pretense" statute.

97. Other distinctions between state statutes.

98. Federal statutes dealing with the giving of false financial statements: Mailing a false financial statement as a violation of the U. S. Criminal Code.

99. Scope of the U. S. statute:

100. Elements of the offense.

101. Mailing a false financial statement for the purpose of obtaining goods on credit on the strength thereof, held to be a scheme or artifice under the "fraudulent use of the mails" act.

102. Venue, indictment, and proofs.

§ 93. "False pretense" statute held to apply to false financial statements in some states.

The statute relating to obtaining property by false pretenses, is in many states held to include the obtaining of property on credit, on a false financial statement. Thus, in Kansas, Mississippi, South Dakota, and Texas, the statute makes it a crime to obtain property by false pretenses. This statute in the four states last mentioned, is held to prohibit the obtaining of property on credit on a false financial statement, and cases based on false financial state

False financial statement statutes.

ments are held to be punishable under the "false pretense" law. The states mentioned have no statute specifically referring to false financial statements which are issued as a basis of credit.

§ 94. "False pretense" statute held not to apply to false financial statements.

On the other hand, the "false pretense" statute of Arkansas and Iowa has been otherwise construed in a number of decisions. These decisions lay down the rule that fraudulently obtaining property on credit on a false financial statement, does not come within the statute relating to "false pretenses". The statutes of Arkansas and Iowa contain no provisions relating to false financial statements.

§ 95. False financial statement statutes.

Some states have a "false pretense" statute but have no "false financial statement" statute in their criminal code. Other states make it a crime to obtain property on a false financial statement without mentioning the obtaining of property on "false pretenses.' In the latter class of states, the crime, more briefly referred to as "false pretenses," is usually classified under a general swindling act or fraud statute. Those states which do not mention "false pretenses" but punish the issuance of false financial statements, are as follows: Colorado, Idaho, Indiana, Kentucky, Louisiana, Maine, Maryland, Montana, Nebraska, Nevada, New Mexico.

Distinctions between state statutes.

§ 96. False financial statement law in addition to "false pretense" statute.

Those states not classified in sections 93, 94, and 95, have provisions making it a crime to obtain property either by false pretenses or by means of a false financial statement. The statute in this class of states is, generally speaking, more specific in its application than the statutes in other states. In the states which punish both offenses, we find the best interpretation of the statutes covering the issuance of a false financial statement.

§ 97. Other distinctions between state statutes.

It is worthy of note that some of the statutes making it a crime to issue a false financial statement lay stress on financial statements given to banking and financial institutions including note-brokers. The best example of this is found in the Michigan statute. In many states, the giving of a false financial statement to a bank, or to a business house, is contained in a single section. Another distinction found in the "false statement" statutes appears in connection with the reaffirmance by debtor, of a financial statement previously given. Some states require written reaffirmation in order to furnish a basis for a criminal complaint, while in other states,

2. For details as to the statutes and decisions thereunder, see appendix A.

3. Sec. 15,342 Comp. Laws of Mich., 1915. See appendix for other states having similar provisions.

Fraudulent use of mails.

oral reaffirmation is held to be sufficient to sustain an indictment or information."

§ 98. Federal statutes dealing with the giving of false financial statements: Mailing a false

financial statement as a violation of the U. S. Criminal Code.

The Criminal Code, Section 215, of the United States laws, being likewise U. S. Revised Statutes, Sec. 5480, as amended, provides that "whoever, having devised or intended to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises shall for the purpose of executing such scheme or artifice or attempt so to do, place, or cause to be placed, any letter, postal card, package, writing, circular, pamphlet, or advertisement, whether addressed to any person residing within or outside of the United States, in any post office or station thereof or street or other letterbox of the United States, or authorized depository for mail matter, to be sent or delivered by the post office establishment of the United States shall be fined not more than $1000, or imprisoned not more than five years, or both."

§ 99. Scope of the statute.

This statute has been invoked many times in cases where persons have obtained goods on credit, on the

4. See appendix A for reference to state statutes.

5. See 35 U. S. Stat. L. 1130, Barnes Federal Code, 1919, Sec. 9912, Sec. 215, Fed. Stat. Ann. Vol. 7, p. 812, 2d ed.