De Latour v. Lala

• Decision Date: 01 December 1930
• Docket Number: 13,443
• Citation: 131 So. 211,15 La.App. 276
• Court: Court of Appeal of Louisiana — District of US
• Parties: DE LATOUR v. LALA

131 So. 211

15 La.App. 276

DE LATOUR v. LALA

No. 13,443

Court of Appeals of Louisiana, Orleans

December 1, 1930

Appeal from Civil District Court for the Parish of Orleans, Division "C." Hon. E. K. Skinner, Judge.

Action by Frank De Latour against Dominick Lala.

There was judgment for defendant dismissing suit and plaintiff appealed.

Judgment affirmed.

See also, 12 La.App. 341, 125 So. 138.

Judgment affirmed.

H. W Kaiser and J. H. Hammel, Jr., of New Orleans, attorneys for plaintiff, appellant.

James G. Schillin, of New Orleans, attorney for defendant appellee.

OPINION

HIGGINS, J.

Plaintiff sues on an open account. Defendant admitted the indebtedness and pleaded, as a bar to plaintiff's right to recover, his discharge in bankruptcy. Plaintiff then urged that the debt was not discharged in bankruptcy, because the credit, extended to defendant, was obtained by him on the false pretense that he had certain outstanding accounts which he would collect and pay to plaintiff, and that, as plaintiff relied on this fraudulent misrepresentation of the defendant in extending him further credit, the debt was not affected by the defendant's discharge in bankruptcy under the express provisions of section 17 of the Bankruptcy Act (11 USCA, sec. 35). There was judgment dismissing the suit and plaintiff appealed.

We gather from the record that the plaintiff was engaged in the wholesale poultry business and defendant was engaged in the retail poultry business. Defendant had an open account with the plaintiff for about two years prior to the time of the alleged fraud. Between the dates of October 3, 1924, and November 21, 1924, the plaintiff had sold the defendant, at various times, poultry amounting to the sum of $ 755.85, on account of which defendant, on November 4, 1924, had paid the sum of $ 200, leaving a balance due of $ 555.85. On or about November 25, 1924, the defendant went to the plaintiff's place of business for the purpose of obtaining merchandise, and, when plaintiff expressed his reluctance to extend further credit, defendant stated that he had lots of outstanding accounts and that he would pay. Defendant admits that this statement was made for the purpose of obtaining further credit and that his statement was false.

The pertinent portion of the Bankruptcy Act in this regard is Section 17, as amended by Act of February 5, 1903 (U. S. Comp. Stat. No. 9586, et seq., 11 USCA, sec. 35) which reads as follows:

"Sec. 17. DEBTS NOT AFFECTED BY A DISCHARGE. --(a) A discharge in bankruptcy shall release a bankrupt from all of his provable debts, except such as (1) * * *; (2) are liabilities for obtaining property by false pretenses or false representations * * *."

Analyzing this language, it would appear to us that, before Section 17 (11 USCA, section 35) would be applicable, the plaintiff must show: (1) That defendant made false representations; (2) that these representations were made with the intention of defrauding the plaintiff, and (3) that the plaintiff relied upon and was misled by the false pretenses or representations.

The plaintiff's testimony as to what happened on the occasion in question is as follows:

"Q. When you sold Dominick Lala, did you inquire of him or make any effort to get from him any statement as to his financial condition?

"A. Well, I was informed that he had had enough credit, and I couldn't go any further, and he told me that he had a lot of outstanding accounts, and as soon as he collected he would pay me, and to give him a little...