Bardwell, Matter of, 77-2863

Citation610 F.2d 228
Decision Date15 January 1980
Docket NumberNo. 77-2863,77-2863
Parties, Bankr. L. Rep. P 67,306 In the Matter of Charles Moore BARDWELL, Jr., et al., Bankrupts. HIGHLAND VILLAGE BANK, Appellant, v. Charles Moore BARDWELL, Jr., et al., Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)

Ben H. Sheppard, Jr., Houston, Tex., for appellant.

Dale Ledbetter, Houston, Tex., for appellees.

Appeal from the United States District Court for the Southern District of Texas.

Before CHARLES CLARK, RONEY and HENDERSON, Circuit Judges.

PER CURIAM:

Highland Village Bank sought to prevent either the discharge in bankruptcy of Charles Moore Bardwell, Jr. and Rachel Hudgins Bardwell, his wife, or the discharge of their debt to the Bank. The Bank asserted that a knowingly false financial statement was given to the Bank when the Bardwells obtained a loan. The bankruptcy court found the statement false but dismissed the Bank's objection as to Mrs. Bardwell, because it also found that Mrs. Bardwell believed the financial statement to be true and correct when she executed it, and that she did not act with such reckless indifference to the facts as to warrant a finding that she acted fraudulently or with an intent to deceive. The Bank appeals. The district court's decision that the bankruptcy court's finding of fact as to Mrs. Bardwell was not clearly erroneous is affirmed. The Bank's objection to Mr. Bardwell's discharge is not raised on appeal.

The Bank argues that an intent to deceive the Bank must be imputed to the bankrupt, Rachel Hudgins Bardwell, because her execution of the financial statement in reliance on the accuracy of information furnished by her husband demonstrates reckless indifference to the facts stated therein.

At trial, Mrs. Bardwell testified that before signing the financial statement, she "glanced at it briefly," and relied on her husband, an attorney, for the truth and correctness of the statement he had prepared. She admitted that two notes owing to her mother and totaling $24,250 had been omitted from the statement. She did not sign one of the notes until after the statement was made, though her husband had previously signed it, and did not remember when she first became aware of the note. She stated she had forgotten the other note payable to her mother because in a letter received from her stepfather shortly before the financial statement was completed, he enclosed a copy of a $30,000 note, but not the omitted note.

On appeal from the bankruptcy court, the district court applied the correct rules of law. Obtaining credit by a materially false financial statement will prevent bankruptcy discharge if the bankrupt either had actual knowledge of the falsity of the statement or demonstrated reckless indifference to the accuracy of the facts stated therein. Gardner v. American Century Mortgage Investors, 577 F.2d 928 (5th Cir. 1978) (discharge of bankrupt); In re Houtman, 568 F.2d 651 (9th Cir. 1978) (discharge of debt); See Bankruptcy Act §§ 14(c)(3), 17(a) (2), 11 U.S.C.A. §§ 32(c)(3), 35(a)(2) (current versions at 11 U.S.C.A. §§ 727(a)(4),523(a)(2)).

The bankruptcy court's factual finding must be affirmed unless clearly erroneous. Gardner v. American Century Mortgage Investors, 577 F.2d at 929. The test for the district court, as well as for this Court, is not whether a different...

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23 cases
  • Crist, Matter of, s. 78-3575
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • December 17, 1980
    ...but whether there is sufficient evidence in the record to (reflect) clear error in the trial judge's findings." Matter of Bardwell, 610 F.2d 228, 230 (5th Cir. 1980). Frederick Pinkerton insists that the facts in the record support his position with the force and urgency required by this st......
  • Missionary Baptist Foundation of America, Inc., Matter of, 85-1457
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • August 11, 1986
    ...Cir.1985); Mitsubishi International Corporation v. Clark Pipe and Supply Co., Inc., 735 F.2d 160 (5th Cir.1984); Highland Village Bank v. Bardwell, 610 F.2d 228 (5th Cir.1980). A finding of fact is clearly erroneous when "although there is evidence to support it, the reviewing court on the ......
  • Wendy Haig, Greg Sadler, & Showcase 81, LLC v. Shart (In re Shart), Bankruptcy No. 2:10–bk–29973–BR.
    • United States
    • United States Bankruptcy Courts. Ninth Circuit. U.S. Bankruptcy Court — Central District of California
    • January 29, 2014
    ...on the part of the party to be charged, see [505 B.R. 19]In re Walker, 726 F.2d 452, 454 (8th Cir.1984) (per curiam); In re Bardwell, 610 F.2d 228, 229 (5th Cir.1980) (per curiam); David v. Annapolis Banking & Trust Co., 209 F.2d 343, 344 (4th Cir.1953); In re Lovich, 117 F.2d 612, 614–15 (......
  • Garfinkle, Matter of, 81-5098
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • April 12, 1982
    ...but whether there is sufficient evidence in the record to prevent clear error in the trial judge's findings. Highland Village Bank v. Bardwell, 610 F.2d 228, 230 (5th Cir. 1980). Strict application of the clearly erroneous doctrine becomes paramount when, as here, the District Court affirme......
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