Superior Loan Corp. of Buffalo v. Robie, No. 9074

• Court: Missouri Court of Appeals
• Writing for the Court: STONE; TITUS, C.J., and HOGAN
• Citation: 476 S.W.2d 144
• Parties: SUPERIOR LOAN CORPORATION OF BUFFALO, a corporation, Plaintiff-Respondent, v. George ROBIE and Pauline Robie, Defendants-Appellants.
• Decision Date: 25 January 1972
• Docket Number: No. 9074

Page 144

476 S.W.2d 144 SUPERIOR LOAN CORPORATION OF BUFFALO, a corporation,
Plaintiff-Respondent,
v.
George ROBIE and Pauline Robie, Defendants-Appellants. No. 9074. Missouri Court of Appeals, Springfield District. Jan. 25, 1972.

Bussell, Hough, Greene & Bernhardt, David W. Bernhardt, Springfield, for defendants-appellants.

STONE, Judge.

In this jury-waived court-tried action on a promissory note, judgment was entered in favor of plaintiff Superior Loan Corporation of Buffalo (Superior) for and in the principal sum of $1,586.67 against defendants George Robie and Pauline Robie, husband and wife, who now appeal.

The pleaded affirmative defense upon which defendants relied was that their debt evidenced by the note in suit had been listed properly in schedules filed with their voluntary petition in bankruptcy during April 1969 and that their subsequent discharge in bankruptcy relieved them of further liability upon the note. On the other hand, Superior asserted in the trial court ¹ that defendants' debt evidenced by the note was nondischargeable in bankruptcy because it was within the second of the three exceptions in § 17 of the Bankruptcy Act as amended (11 U.S.C.A. § 35(a)(2)):

'A discharge in bankruptcy shall release a bankrupt from all of his provable debts, whether allowable in full or in part, except such as . . . (2) are liabilities (1) for obtaining money or property by false pretenses or false representations, or (2) 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 his financial condition made or published or caused to be made or published in any manner whatsoever with intent to deceive, or (3) for willful and malicious conversion of the property of another.' (All emphasis herein is ours.)

The note in suit dated September 5, 1968, in the 'face amount' of $1,725 (including interest) payable in twenty-five monthly installments of $69 each was 'a renewal loan,' from the proceeds of which the then outstanding balance of a prior loan by Superior to defendants was paid and they received 'new money' in the sum of $391.95. This was the fourth loan Superior had made to these defendants. The first loan was made on November 15, 1966, the second loan an May 27, 1967, and the third loan on March 26, 1968. Witness Ruble, Superior's manager, testified that a written financial statement signed by the borrowers was taken 'on all loans,' and such signed financial statements obtained in connection with the second, third and fourth loans were received in evidence upon trial. Each such statement was taken on a printed form in which the borrowers represented that the creditors and amount of indebtedness to each as written on the blank lines provided for that purpose constituted 'a complete and accurate listing of all of my debts,' excepting only 'gas, electric, rent and water.' In their signed financial statement of May 27, 1967 (the second financial statement), defendants recorded four creditors to whom they were indebted in the aggregate sum of $3,738.50. ² In

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their signed financial statement of March 26, 1968 (the third financial statement), they listed three creditors and aggregate indebtedness of $1,400. ³ And in their signed financial statement of September 5, 1968 (the fourth financial statement) only two creditors and aggregate indebtedness of $1,300 were shown. ⁴ In their bankruptcy schedules they listed seven secured creditors and an aggregate indebtedness of $13,307.12 with the aggregate 'value of securities' estimated

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at $11,400, ⁵ and thirty unsecured creditors to whom they were indebted in the aggregate amount of $4,009.57. ⁶ Upon trial, defendant George expressly admitted that all of the secured debts listed in defendants' bankruptcy schedules were outstanding when Superior's fourth loan was made on September 5, 1968, and inferentially conceded that all of the unsecured debts likewise were outstanding on that date. In fact, 'most of them' were more than ten years old (so he said), although he readily acknowledged that more recent payments had been made on some of those debts.

As ably and earnestly presented by their counsel, the essence of defendants' position on appeal is that, in making the fourth loan on September 5, 1968, plaintiff Superior (a) had no right to rely, and (b) in fact did not rely, upon the written financial statement of that date admittedly signed by them. Only three witnesses testified, namely, R. F. Ruble, plaintiff Superior's manager, and the two defendants. In here urging outright reversal of the judgment nisi, defendants' counsel refer, in the argument section of their brief, only to the above-described financial statements and the testimony of witness Ruble to which we now attend.

When defendant George Robie sought a renewal loan and additional cash at Superior's office on September 5, 1968, manager Ruble first prepared and completed an 'application,' which (as he explained) was 'taken by us, previous to making a loan' but was not signed by defendants. Although it was produced by Ruble, was scrutinized by counsel, and was before the trial court, this application was not offered in evidence. That aside, Ruble said that, in preparing the application, he asked what defendants owed and then recorded in that document the names of the creditors and the amount owing to each as supplied by defendant George. Thereafter, on the same day the new note and a check were typed by Ruble's secretary; the fourth financial statement (on a form used by Superior) ⁷ was prepared by recording therein the information concerning defendants' creditors and indebtedness as theretofore furnished by defendant George and entered by Ruble in the loan application, to wit, defendants' indebtedness to Shewmaker Motors in the sum of $100 payable $10 per month and their indebtedness to 1st National Bank in the sum of $1,200 payable $55 per month; and the note and financial statement were

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signed by defendant George, then taken by him to the Robie home for signature by his wife, defendant Pauline, and subsequently returned to plaintiff's office where, after the signed instruments were delivered to Ruble, the check for the 'new money' in the sum of $391.95 was given to defendant George.

Did plaintiff Superior have the right to rely upon defendants' fourth financial statement? The insistence of defendants' counsel upon a negative answer to that question rests essentially upon the premise 'that had plaintiff merely opened its...