GRONER, C. J.
This is a petition to review an order of the District Court granting and permitting the discharge of a bankrupt. The provisions of the Bankruptcy Act with relation to discharges require that "The court shall grant the discharge unless satisfied that the bankrupt has * * * (3) obtained money or property on credit, * * * by making or publishing or causing to be made or published in any manner whatsoever, a materially false statement in writing respecting his financial condition. * * *"
"The amendment of 1926 has revolutionized the procedure in discharge; the bankrupt may no longer remain inert, standing upon the infirmities of the evidence against him; once a prima facie case appears, the laboring oar passes to his hands and he must bring the boat to shore."
In the instant case the bankrupt on his examination admitted that he had made a written financial statement to the objector, Morris Plan Industrial Bank of New York, and to another creditor, Railroad Employees' Personal Loan Company. In the case of the Morris Bank, the application and accompanying statement were dated November 2, 1939, and in the case of Railroad Employees' Company, November 21, 1939. To the Bank he applied for a loan of $780 for a period of fifteen months, and "for the purpose of obtaining credit and with the knowledge that you will rely on them," certified over his signature that there were no outstanding legal claims of any kind whatsoever against him other than those listed in his application. To the Railroad Employees' Company his statement likewise expressly acknowledged that it was made with the intent that it would be relied upon by the Company.
On the hearing on the objections to his discharge, he admitted that he had failed
"I regret that I am unable to pay the sum of $329.51 * * * because I am unemployed and have no assets. I am hopeful that my situation will soon change for the better, but until I have funds available there is no way I can satisfy my creditors."
The Referee, while recognizing that the two financial statements were untrue, nevertheless held that there was no showing of intent to defraud nor sufficient showing that the parties relied upon the statements in making their respective loans. The Referee also thought that the amount involved — some three or four hundred odd dollars — was not enough to make the "statement materially false." The District Court granted the discharge on the Referee's findings and recommendation.
We think this was error.
The evidence clearly shows that the bankrupt gave the information to the loan companies on a form which conveyed to him knowledge of the fact that the lenders would rely, in making the loan, upon answers to questions intended to elicit full information as to the borrower's financial condition. In such a case, when it later appears in a bankruptcy proceeding that the answers were false, the burden of showing that the lender did not rely upon them passes to the bankrupt, and here there is no contention that such burden was met. In re Smatlak, 7 Cir., 99 F.2d 687; In re Finn, 3 Cir., 119 F.2d 656.
Nor is it proper to say that because the amount of the indebtedness is only a few hundred dollars, information in relation to it is not material. If the objecting creditor in this case had been informed that the bankrupt had recently been evicted from his apartment for non-payment of rent and was then appealing to his creditor for leniency because he was unemployed and out of funds, it is not difficult to assume that it would have considered the loan it was then being asked to make as anything else than a good risk.
The order allowing the discharge is reversed and the case remanded for further proceedings in accordance with this opinion.
Reversed and remanded.