Title: Household Finance Corp. v. Williams
Citation: 401 P.2d 876, 66 Wash. 2d 183
Docket Number: 37397
State: Washington
Issuer: Washington Supreme Court
Date: May 6, 1965

66 Wn.2d 183 (1965) 401 P.2d 876 HOUSEHOLD FINANCE CORPORATION OF SEATTLE, Appellant, v. HARVEY E. WILLIAMS et al., Respondents.[*] No. 37397. The Supreme Court of Washington, Department Two. May 6, 1965. Alexander Wiley, for appellant. Clark R. Belknap, for respondent. OTT, J. Household Finance Corporation of Seattle sought judgment on a promissory note executed by Harvey E. Williams and Verna Williams, his wife. Verna *184 Williams defaulted. Harvey E. Williams alleged that his obligation on the note was discharged in a bankruptcy proceeding. From the evidence presented at the trial, the court found that Harvey E. Williams' obligation on the note was discharged by the bankruptcy proceeding. The court's findings in this regard are as follows: From the judgment of dismissal as to Harvey E. Williams, the plaintiff has appealed. Appellant contends that, although respondent was subsequently discharged in bankruptcy, respondent's liability on the note was not discharged because of the applicable provisions of the Bankruptcy Act, which provides in part: [1, 2] The burden of proof is upon a creditor to establish that a debt is within the class excepted from a discharge in bankruptcy. Zerega Distrib. Co. v. Gough, 52 *185 Wn.2d 443, 445, 325 P.2d 894 (1958), and case cited. The portion of § 35 of the Bankruptcy Act upon which appellant relies is predicated upon the creditor's establishing that the borrower obtained an extension or renewal of credit "in reliance upon a materially false statement in writing respecting his financial condition." The words "materially false statement" have been equated with fraud. American Nat'l Bank of Denver v. Rainquet, 323 F.2d 881 (1963); 17 A.L.R.2d 1208. Fraud must be proved by evidence which is clear, cogent, and convincing. Williams v. Joslin, 65 Wn.2d 696, 399 P.2d 308 (1965). The essential elements of fraud are: Accord, Michielli v. United States Mortgage Co., 58 Wn.2d 221, 361 P.2d 758 (1961); Haagen v. Landeis, 56 Wn.2d 289, 352 P.2d 636 (1960); Zerega Distrib. Co. v. Gough, supra. [3] The only record in this appeal consists of a transcript of the court's findings of fact, conclusions of law, and judgment of dismissal. There is no statement of facts. Our review is limited to whether the court's findings of fact support its conclusions of law and judgment of dismissal. The court found that the $3,300 indebtedness was the separate debt of Verna Williams, and that Harvey E. Williams had no knowledge of it. There is nothing in the record before us that challenges the court's finding of fact that one of the essential elements of fraud was not established. *186 In Viking Equip. Co. v. Minneapolis-Moline Co., 61 Wn.2d 755, 380 P.2d 469 (1963), the trial judge found that one of the essential elements of fraud had not been proved by clear, cogent, and convincing evidence. We said, p. 759: Applying the rule of the above-cited case, the court's finding of fact that one of the elements of fraud had not been proved supports its conclusion of law and judgment that the cause should be dismissed as to Harvey E. Williams. Appellant now asserts that the evidence presented to the trial court would sustain a factual determination that respondent made a reckless statement, without knowledge of its truth and as a positive assertion, which was tantamount to a fraudulent representation with intent to deceive; hence, the trial court erred in holding that the obligation was dischargeable in bankruptcy. Zerega Distrib. Co. v. Gough, supra; American Nat'l Bank of Denver v. Rainquet, supra; 8 Remington on Bankruptcy § 3320, p. 178 (1955 ed.). [4] Assuming, arguendo, that respondent was reckless in failing to make inquiry regarding his wife's separate obligation before signing the statement, which reckless conduct could be equated with an intentional false representation, and assuming further that this alleged reckless conduct was a factual issue before the trial court, the court's findings of fact and conclusions of law do not mention it, nor is error assigned to the court's failure to so find. Without a statement of facts, there is no record before us which establishes that such a factual issue was presented to the trial court. Accordingly, we cannot review this contention. In Seattle v. Shields, 60 Wn.2d 859, 862, 376 P.2d 535 (1962), we said: The judgment is affirmed. DONWORTH, FINLEY, WEAVER, and HAMILTON, JJ., concur. June 25, 1965. Petition for rehearing denied. [*] Reported in 401 P.2d 876.