Source: https://www.legalcrystal.com/case/107540/field-vs-mans
Timestamp: 2020-06-05 06:39:11
Document Index: 98220818

Matched Legal Cases: ['§ 523', '§ 523', '§ 523', '§ 523', '§ 523', '§ 523', '§ 523', '§ 523', '§ 523', '§ 523', '§ 523']

Field Vs Mans - Citation 107540 - Court Judgment | LegalCrystal
Field Vs. Mans - Court Judgment
LegalCrystal Citation legalcrystal.com/107540
Decided On Oct-02-1995
Case Number 516 U.S. 59
Respondent Mans
field v. mans - 516 u.s. 59 (1995) october term, 1995 syllabus field et al. v. mans certiorari to the united states court of appeals for the first circuit no. 94-967. argued october 2, 1995-decided november 28,1995 mter respondent mans filed for relief under chapter 11 of the bankruptcy code, petitioners william and norinne field alleged, in effect, that letters mans had written to them constituted fraudulent representations on which they relied in continuing to extend credit to a corporation controlled by mans, and that, accordingly, mans's obligation to them as guarantor of the corporation's debt should be excepted from discharge under 11 u. s. c. § 523(a)(2)(a) as a debt resulting from fraud. the bankruptcy court found that mans's letters.....
Field v. Mans - 516 U.S. 59 (1995)
Mter respondent Mans filed for relief under Chapter 11 of the Bankruptcy Code, petitioners William and Norinne Field alleged, in effect, that letters Mans had written to them constituted fraudulent representations on which they relied in continuing to extend credit to a corporation controlled by Mans, and that, accordingly, Mans's obligation to them as guarantor of the corporation's debt should be excepted from discharge under 11 U. S. C. § 523(a)(2)(A) as a debt resulting from fraud. The Bankruptcy Court found that Mans's letters constituted false representations, but followed Circuit precedent in requiring that the Fields show their reasonable reliance on the letters. Finding the Fields unreasonable in relying without further enquiry on Mans's misrepresentations, the court held Mans's debt dischargeable. The District Court and the Court of Appeals affirmed.
36 F.3d 1089 , vacated and remanded.
The argument relies on the apparent negative pregnant, under the rule of construction that an express statutory requirement here, contrasted with statutory silence there, shows an intent to confine the requirement to the specified instance. See Gozlon-Peretz v. United States, 498 U. S. 395 , 404 (1991) (" '[W]here Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion''') (quoting Russello v. United States, 464 U. S. 16 , 23 (1983)). Thus the failure of § 523(a)(2)(A) to require the reasonableness of reliance demanded by § 523(a)(2)(B) shows that (A) lacks such a requirement. Without more, the inference might be a helpful one. But there is more here, showing why the negative pregnant argument should not be elevated to the level of interpretive trump card.
tween the substantive terms in §§ 523(a)(2)(A) and (B): the former refer to common-law torts, and the latter do not. The principal phrase in the predecessor of § 523(a)(2)(B) was "obtained property ... upon a materially false statement in writing," Act of Feb. 5, 1903, ch. 487, 32 Stat. 797; in the current § 523(a)(2)(B) it is value "obtained by ... use of a statement in writing." Neither phrase is apparently traceable to another context where it might have been construed to include elements that need not be set out separately. If other elements are to be added to "statement in writing," the statutory language must add them (and of course it would need to add them to keep this exception to dischargeability from swallowing most of the rule). The operative terms in § 523(a)(2)(A), on the other hand, "false pretenses, a false representation, or actual fraud," carry the acquired meaning of terms of art. They are common-law terms, and, as we will shortly see in the case of "actual fraud," which concerns us here, they imply elements that the common law has defined them to include. See Durland v. United States, 161 U. S. 306 , 312 (1896); James-Dickinson Farm Mortgage Co. v. Harry, 273 U. S. 119 , 121 (1927). Congress could have enumerated their elements, but Congress's contrary drafting choice did not deprive them of a significance richer than the bare statement of their terms.
"It is ... well established that '[w]here Congress uses terms that have accumulated settled meaning under ... the common law, a court must infer, unless the statute otherwise dictates, that Congress means to incorporate the established meaning of these terms.'" Community for Creative NonViolence v. Reid, 490 U. S. 730 , 739 (1989) (quoting NLRB v. Amax Coal Co., 453 U. S. 322 , 329 (1981)); see also Nationwide Mut. Ins. Co. v. Darden, 503 U. S. 318 , 322 (1992). In this case, neither the structure of § 523(a)(2) nor any explicit statement in § 523(a)(2)(A) reveals, let alone dictates, the
9We construe the terms in § 523(a)(2)(A) to incorporate the general common law of torts, the dominant consensus of common-law jurisdictions, rather than the law of any particular State. See Nationwide Mut. Ins. Co. v. Darden, 503 U. S. 318 , 323, n. 3 (1992); Community for Creative Non-Violence v. Reid, 490 U. S. 730 , 740 (1989).
has been guilty of an intentional and deliberate fraud, the doctrine is well settled that he cannot defend against such fraud by saying that the same might have been discovered had the party whom he deceived exercised reasonable diligence and care"); Gonderman v. State Exchange Bank, 166 Ind. App. 181, 190, 334 N. E. 2d 724, 729 (1975) (stating that level of required prudence depends on whether the recipient of a representation is unwary); Sutton v. Greiner, 177 Iowa 532, 540-541, 159 N. W. 268, 271-272 (1916) (same as Illinois); Prather v. Colorado Oil & Gas Corp., 218 Kan. 111, 119,542 P. 2d 297, 304 (1975) (finding no duty to investigate); Sanford Construction Co. v. S. & H. Contractors, Inc., 443 S. W. 2d 227, 233-234 (Ky. App. 1969) (indicating that level of reliance depends on sophistication of parties); Horner v. Flynn, 334 A. 2d 194, 205 (Me. 1975) (stating that a person who commits intentional misrepresentation cannot excuse himself based on the foolishness of the hearer in believing the representation); Yorke v. Taylor, 332 Mass. 368, 372-374, 124 N. E. 2d 912, 915-916 (1955) (relying on Restatement (First)); Boss v. Tomaras, 241 Mich. 540, 542, 217 N. W. 783 (1928) (finding right to rely without investigation); Murphy v. Country House, Inc., 307 Minn. 344, 351, 240 N. W. 2d 507, 512 (1976) (rejecting reasonable person standard and applying subjective test based on intelligence and experience of aggrieved person); First Mobile Home Corp. v. Little, 298 So. 2d 676, 679 (Miss. 1974) (requiring justifiable reliance); Tietjens v. General Motors Corp., 418 S. W. 2d 75, 81-83 (Mo. 1967) (stating that reliance required depends on the positions of the parties, and that there is no duty to investigate); Bails v. Gar, 171 Mont. 342, 348-349, 558 P. 2d 458, 462-463 (1976) (stating that requirement depends on experience and resourcefulness of relying party); Growney v. C M H Real Estate Co., 195 Neb. 398, 400-401, 238 N. W. 2d 240, 242 (1976) (requiring justifiable reliance); Sanguinetti v. Strecker, 94 Nev. 200, 206,577 P. 2d 404,408 (1978) (requiring justifiable reliance); Smith v. Pope, 103 N. H. 555, 559560, 176 A. 2d 321, 324-325 (1961) (relying on Restatement (First)); Na tional Premium Budget Plan Corp. v. National Fire Insurance Co. of Hartford, 97 N. J. Super. 149,209-211,234 A. 2d 683, 716-718 (1967) (relying on Restatement (First) and W. Prosser, Law of Torts (2d ed. 1955), including example of one-eyed horse, in finding that justifiable reliance is appropriate standard), aff'd, 106 N. J. Super. 238, 254 A. 2d 819 (1969); Jones v. Friedman, 57 N. M. 361, 367-368, 258 P. 2d 1131, 1134-1135 (1953) (requiring justifiable reliance and no general duty to investigate); Johnson
guage at work in the statute here. See Alaska Airlines, Inc. v. Brock, 480 U. S. 678 , 690-691 (1987).
Mans prevailed on the reliance issue before the bankruptcy, district, and appellate courts on the basis of thengoverning Circuit precedent. See In re Burgess, 955 F.2d 134 , 140 (CA1 1992) (creditor required to prove that its reliance was reasonable). With the Circuit law on reliance solidly in his favor, Mans understandably did not advance in the lower courts the argument that the debt was not "obtained by" fraud. When the "reliance must be reasonable" rule solid in the Circuit was challenged in this Court, however, Mans raised the causation point as an alternate justification for the judgment in his favor. See Brief for Respondent 32-33 (argument heading V. reads: "Since the credit here was not 'obtained by' the alleged fraud, petitioners have failed to meet the [causation] requirement of 523(a)(2)(A)"); Tr. of Oral Arg. 43 ("[U]nder the clear language of the statute, there