# In the Matter of William Albert Talor, AKA William A. Taylor, Bankrupt Public Finance Corporation of Redlands v. William A. Taylor > Court of Appeals for the Ninth Circuit · April 18, 1975 · 514 F.2d 1370 URL: https://www.frixlaw.com/law-library/cases/9461679 ## Case - **Full name:** In the Matter of William Albert TAYLOR, AKA William A. Taylor, Bankrupt. PUBLIC FINANCE CORPORATION OF REDLANDS, Appellant, v. William A. TAYLOR, Appellee - **Court:** Court of Appeals for the Ninth Circuit - **Decided:** April 18, 1975 - **Citations:** 514 F.2d 1370; 4 Collier Bankr. Cas. 2d 223; 1975 U.S. App. LEXIS 15081 - **Precedential status:** Published - **Opinion:** Concurring in part by Duniway - **Judges:** Duniway, Kilkenny, Solomon - **Cited by:** 170 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9461679 ## How later opinions describe it (automated extraction) - quoting, Sweet v. Ritter Finance Co., 263 F.Supp. 540, 543 (W.D.Va.1967) ## Opinion text DUNIWAY, Circuit Judge (concurring and dissenting): I concur in part I of Judge Kilkenny’s opinion, dealing with . the burden of proof. However, I cannot agree with part II, which holds that the referee’s findings are not clearly erroneous. In my opinion, those findings are clearly erroneous. In the leading case of United States v. United States Gypsum Co., 1948, 333 U.S. 364 at 395-6 , 68 S.Ct. 525 at 542 , the Court said this about the “clearly erroneous” rule (Rule 52(a), F.R.Civ.P.): Since judicial review of findings of trial courts does not have the statutory or constitutional limitations on judicial review of findings by administrative agencies or by a jury, this Court may reverse findings of fact by a trial court where “clearly erroneous.” The practice in equity prior to the present Rules of Civil Procedure was that the findings of the trial court, when dependent upon oral testimony where the candor and credibility of the witnesses would best be judged, had great weight with the appellate court. The findings were never conclusive, however. A finding is “clearly erroneous” when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed. The government relied very largely on documentary exhibits, and called as witnesses many of the authors of the documents. Both on direct and cross-examination counsel were permitted to *1375 phrase their questions in extremely leading form, so that the import of the witnesses’ testimony was conflicting. On cross-examination most of the witnesses denied that they had acted in concert in securing patent licenses or that they had agreed to do the things which in fact were done. Where such testimony is in conflict with contemporaneous documents we can give it little weight, particularly when the crucial issues involve mixed questions of law and fact. Despite the opportunity of the trial court to appraise the credibility of the witnesses, we cannot under the circumstances of this case rule otherwise than that Finding 118 is clearly erroneous. (Footnotes omitted) In the case at bar, Taylor, in obtaining a renewal and increase of a loan from Public Finance, signed a statement, Exhibit 5, on October 7, 1971, entitled, in heavy block capital letters: STATEMENT FOR PURPOSE OF OBTAINING A LOAN OR EXTENSION OF CREDIT The statement recites: For the specific purpose of obtaining a loan or credit from: PUBLIC FINANCE CORPORATION I hereby make the following statement as to my income and liabilities. The only persons or companies to whom I owe money and their names and amounts of each indebtedness are as follows: ... BE CERTAIN TO INCLUDE ALL DEBTS. There follow spaces for listing indebtedness, in which Taylor listed five, total-ling $3,892.00. Immediately above Taylor’s signature there appears the following: I certify no one has suggested that I omit any of my indebtedness from this statement. Notwithstanding any previous dealing had with you or the value of any property mortgaged, I UNDERSTAND THAT IN MAKING THIS LOAN YOU ARE RELYING ON MY FINANCIAL CONDITION AS SHOWN BY ME IN THIS STATEMENT. There is no claim that Taylor had not read the statement, nor could there be. He had filled out and signed two previous ones, on August 18, 1970 and July 23, 1971. To secure the October 1971 extension of credit and additional loan, Taylor also signed a “Security Agreement” giving Public Finance a lien on his household furniture, which was listed in detail in the agreement. As Judge Kilkenny’s opinion shows, Taylor had an explanation for the omission from the statement of certain of his debts. But he had no explanation for failing to list his $1,502.13 debt to AVCO Financial Services, which he had contracted a month before, and to secure which he had given AVCO a lien on the same furniture that he tendered to Public to secure his new indebtedness to Public. Here is what Taylor said about that, in describing his conversation with Chaffino, the officer of Public with whom he dealt: Q. Did you indicate this other bill that you had to AVCO? A. No, I did not that one, no, sir. Q. Mr. Taylor, that is the same furniture that you gave the security interest to AVCO, correct? A. AVCO didn’t come over and check the furniture. They just put the furniture down on the listing. Q. You did not sign a security agreement? A. This is true, but AVCO never checked anything. Q. Why didn’t you tell Public of the AVCO loan? A. I don’t know. I felt they — He could check through and see my credit and see how many people I owed. If I owed that much money, he couldn’t give it to me in the first place. Q. You thought, then, that if you told him of AVCO, you wouldn’t be able to consolidate your loans? A. I told him about the house in Pico Rivera. *1376 Q. I didn’t ask about the house in Pico Rivera. I asked about the AVCO loan. A. Because they know I had a loan with them before. Q. Public knew? A. Public knew I had a loan with AVCO before. It was on their listing there. Q. You didn’t forget about the AVCO loan when you made the loan? A. No. I just didn’t enter it, was all. Q. When did you say that you told Public of the AVCO loan? A. I didn’t tell them nothing about AVCO. Q. I thought you— A. I told them on a previous loan. It should be on there where I had the loan from AVCO before. It was Seaboard at this time, but they changed to AVCO. Q. You had your other loan with AVCO that was renewed in September of 1971; right? A. That’s right. Q. Okay. And you had at that time an existing loan with AVCO that was renewed at the time before that; correct? At AVCO and Seaboard; isn’t that right? A. AVCO was Seaboard, yes. Q. It was the same thing, and you’re saying that you told Public of that loan? A. No, I didn’t tell Public of that loan. Not the last loan, no. They should have it on the record that I made a loan from Seaboard because I had been doing business with Seaboard, too. Q. You told them previously? A. I told them back a year ago. I don’t know how long it was. Taylor then admitted that his first loan with Public was in August, 1970. This directly contradicts his earlier statement, in response to a leading question by his own counsel, that he had done business with Public for ten years. He identified the August 18, 1970 and July 23, 1971 statements. Neither mentions either AVCO or Seaboard. Giving as much weight to the referee’s opportunity to weigh Taylor’s credibility as I can, I cannot accept his finding “[t]hat the evidence does not sustain the burden of proving the bankrupt intended to deceive Public Finance.” As Taylor said about the AVCO loan, “If I owed that much money, he [Chaffino] couldn’t give it to me in the first place.” That is the only conceivable explanation for Taylor’s omission of the AVCO loan. It is direct and conclusive evidence of his intent to deceive. It makes a complete mockery of his general statement that he had no intention of hiding any bills that he owed when he went in and talked to Chaffino. In the face of the written record and of Taylor’s own admission, that general statement, at least as it relates to the indebtedness to AVCO, is obviously a bald faced lie. Obvious false swearing cannot sustain a finding. Chaffino’s testimony that, if he had known of the AVCO loan, he couldn’t have made the loan to Taylor, stands uncontradicted in this record. It is corroborated by Taylor himself. The United States Gypsum case is directly in point. I cannot agree that this court should approve so obvious a fraud as there is here because of the “clearly erroneous” rule. That rule permits us to reverse for clear error; it does not require us to sustain such error. I would reverse. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9461679. Public record. Not legal advice.