ROBINSON, Bankruptcy Judge.
A bankruptcy court will deny summary judgment if there is a genuine issue of material fact as to whether the debtor was advised to include in his assets, money belonging to his wife, and to omit certain unsecured debts, since this factual issue is material in determining the debtor's intent to deceive pursuant to Section 17a(2) of the Bankruptcy Act. See Sec. 17a(2) at ¶ 2145 and Sec. 523(a)(2) at ¶ 9228, and Rule 756 at ¶ 20,246.
Former Bankruptcy Act — Discharge of Debts — False Financial Statement — Misstatement of Fact — Summary Judgment.
A debtor who allegedly overvalued his real estate and misstated the amount of his accounts, notes receivables and income was not entitled to summary judgment in a dischargeability proceeding. If even one of the alleged misstatements were made, there would be an issue of fact as to whether such misstatement was made with an intent to deceive. See Sec. 17a(2) at ¶ 2145 and Sec. 523(a)(2) at ¶ 9228, and Rule 756 at ¶ 20,246.
Former Bankruptcy Act — Discharge of Debts — False Financial Statement — Reliance — Summary Judgment
Since three of the outstanding notes were executed before the creditor received the allegedly false financial statement, there was a material issue of fact as to whether the notes were renewed in reliance on the statement. Accordingly, summary judgment was denied. See Sec. 17a(2) at ¶ 2145 and Sec. 523(a)(2) at ¶ 9228, and Rule 756 at ¶ 20,246.
Former Bankruptcy Act — Discharge — False Financial Statement — Summary Judgment
Among the issues material to a determination of the debtor's preclusion from a discharge in bankruptcy under Section 14 of the Bankruptcy Act was whether the debtor obtained money or credit for business purposes as a result of publishing a false financial statement. See Sec. 14 at ¶ 2126 and Rule 756 at ¶ 20,246.
[Digest of Opinion]
Of the facts presented to the court, it was undisputed that $4,000.00 belonging to the debtor's wife was included in the debtor's list of assets and that certain unsecured debts were omitted. The debtor contended that he was advised by an officer of the creditor-bank to include this amount and to omit the unsecured debts.
The creditor also contended that the debtor overvalued his real estate, the amount of accounts and notes receivable due him from relatives and friends, as well as the amount of income he was receiving. The debtor denied these allegations, but the creditor introduced no documentary evidence substantiating the claims.
The debtor made a motion for summary judgment. In support thereof, he asserted that the financial statement was not given to the creditor until after the loan was made, and therefore, the creditor could not have relied on this statement in making loans prior to that date. However, in the debtor's answer to the creditor's complaint, the debtor admitted that he provided a financial statement prior to receiving the loan.
The court noted that three of the promissory notes involved in this dispute were executed before the date on which the creditor alleges it received the debtor's financial statement. Therefore, the creditor could not have relied on the financial statement in making these earlier loans. This presented a material issue of fact as as to whether the notes were renewed in reliance on the statement.
Further, in his motion for summary judgment, the debtor did not address all of the allegations made in the creditor's complaint. The creditor contends, for example, that the debtor failed to maintain such books and records as required by law which conduct could preclude a discharge under Section 14c(2) and further, as a result of publishing a false financial statement the debtor obtained money on credit for business purposes which could preclude a discharge under Section 14(c)(3) of the Bankruptcy Act.
Pursuant to Rule 56 of the Federal Rules of Civil Procedure made applicable by Bankruptcy Rule 75b, a motion for summary judgment should be granted only when there are no genuine issues of material fact in the case. Accordingly, since there were several issues of material fact as stated above, the debtor's motion was dismissed.