4 Conn. Cir. Ct. 641 | Conn. App. Ct. | 1967
Plaintiff commenced an action against defendants, husband and wife, based on their execution of a promissory note. The answer of defendants admitted the execution of the note but pleaded as a special defense that the debt due from defendant David Cross, Jr., was discharged by bankruptcy of said defendant. The reply of plaintiff alleged that said defendant was not discharged, pursuant to the provisions of § 17 (a) (2) of the Bankruptcy Act, contending that the loan was procured by false and misleading statements of defendant David Cross, Jr., as to his financial condition. No such defense was raised as to defendant Lillian Cross, and there is no evidence that she filed a bankruptcy petition.
The evidence reflected that defendant David Cross, Jr., had engaged in a number of financial
The instant debt to plaintiff would normally have been discharged by the bankruptcy of defendant David Cross, Jr. Plaintiff has, however, claimed that the debt was not released or discharged, pursuant to the provisions of § 17 (a) (2) of the Bankruptcy Act, which states that a liability for obtaining money or property by false pretenses or false representations, or for “obtaining money or property on credit or obtaining an extension or renewal of credit in reliance upon a materially false statement in writing respecting . . . financial condition” shall survive the bankruptcy. 74 Stat. 409, 11 U.S.C. §35 (a) (2) (1964).
The Connecticut rule is that the essential conditions for an action for deceit, or false representations, are that (1) a representation was made; (2) it was untrue; (3) it was known by defendant to be untrue; (4) it was made to induce plaintiff to act upon it; and (5) plaintiff did act upon it, to his injury. Helming v. Kashak, 122 Conn. 641, 642.
As bearing on the representation, the statement of debts, while not a complete financial statement,
It is very obvious, from the entire sequence of events in this transaction, that defendant Cross was a well-regarded client of plaintiff, based on plaintiff’s excellent prior loan experience with him. In fact, the loan was not a “fresh money” advance but was made to refinance a prior loan. The loan was made the same day as the statement was furnished, and plaintiff’s credit manager made little or no investigation to verify the facts contained therein. The inescapable conclusion of the court is that the statement was taken as a routine ceremony and that the chief reliance of plaintiff was on its prior experience and acquaintance with defendant David Cross, Jr., and not on the statement of debts. The instant case is strikingly similar to Public Finance Corporation v. Xarhakos, 2 Conn. Cir. Ct. 469, 472, and the very recent case of Beneficial Finance Co. v. Crane, 4 Conn. Cir. Ct. 627. In both cases the defendant’s debt was held not to survive his bankruptcy.
Failure to prove any of the elements of a fraud case is fatal. Bradley v. Oviatt, 86 Conn. 63, 67. In
Judgment may be entered in favor of defendant David Cross, Jr., as to the first count; as to defendant Lillian Cross, judgment may enter in favor of plaintiff and against defendant Lillian Cross, as to the second count, for the sum of $1418.77 plus taxable costs.