Carini v. Matera, 77-2145

• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)
• Citation: 5 B.C.D. 56,592 F.2d 378
• Docket Number: No. 77-2145,77-2145
• Parties: , Bankr. L. Rep. P 67,048 In re Giuseppe Matera, Bankrupt. Peter CARINI, Plaintiff-Appellee, v. Giuseppe MATERA, Defendant-Appellant.
• Decision Date: 13 February 1979

Page 378

592 F.2d 378 5 Bankr.Ct.Dec. 56, Bankr. L. Rep. P 67,048 In re Giuseppe Matera, Bankrupt.
Peter CARINI, Plaintiff-Appellee,
v.
Giuseppe MATERA, Defendant-Appellant. No. 77-2145. United States Court of Appeals,
Seventh Circuit. Submitted Jan. 31, 1979.
Decided Feb. 13, 1979.

Page 380

Edward F. Neubecker, Milwaukee, Wis., for appellant.

Before SWYGERT, SPRECHER and WOOD, Circuit Judges.

PER CURIAM.

The bankrupt, Giuseppe Matera, appeals from a judgment of the district court which affirmed a bankruptcy court holding that a loan made to him by appellee Peter Carini was induced by false representations and is, therefore, a non-dischargeable debt under Bankruptcy Act § 17(a)(2), 11 U.S.C. § 35(a)(2). The facts surrounding the loan transaction are set out in the opinion of the district court, In re Matera, 436 F.Supp. 947 (E.D.Wis.1977), and need not be repeated here. On this appeal, Matera contends: (1) that there was no proof of moral turpitude in making the false representations; (2) that Carini's reliance on the representations was not reasonable; and (3) that Carini waived his claim, or is estopped from asserting it. ^*

As the district court held and Matera argues here, § 17(a)(2) requires that for a debt to be nondischargeable the bankrupt must have obtained the money or property through representations known to be false or made with reckless disregard for the truth amounting to willful misrepresentation. In re Houtman, 568 F.2d 651, 655-656 (9th Cir. 1978); In re Blessing, 442 F.Supp. 68, 70 (S.D.Ind.1977). In addition, the courts require a showing of fraudulent intent or moral turpitude on the part of the debtor, i. e., an intent to deceive. In re McMillan, 579 F.2d 289, 292 (3d Cir. 1978); In re Houtman, supra; In re Blessing, supra; In re Dolnick, 374 F.Supp. 84, 90 (N.D.Ill.1974). These questions of knowing or reckless falsehood and intent to deceive are questions of fact, In re Nelson, 561 F.2d 1342, 1347 (9th Cir. 1977), and the bankruptcy court's findings on those issues are conclusive unless clearly erroneous, Bankr. Rule 810; In re Land Investors, Inc., 544 F.2d 925, 933 (7th Cir. 1976). From the evidence produced at the hearing in the bankruptcy court it is clear that Matera's statements about the profitability of his bakery were grossly reckless at a minimum. Moreover, the fact that Matera deposited $4,000 in his personal account the day after the $5,000 loan in question, coupled with his various lies to induce both a...