Seaboard Finance Co. v. Barnes , 2 Mich. App. 5 ( 1966 )

2 Mich. App. 5 (1965) 138 N.W.2d 567

SEABOARD FINANCE COMPANY
v.
BARNES.
SAME
v.
BLAIR.

Docket Nos. 424, 425.

Michigan Court of Appeals.

Decided December 20, 1965. Leave to appeal granted February 24, 1966.

Cochran & Grimm (Jack M. Grimm, of counsel), for plaintiff.

John S. White, for defendants.

Leave to appeal granted by Supreme Court February 24, 1966. See 377 Mich. 703; 378 Mich. 627.

BURNS, P.J.

These two cases have been consolidated for trial and on appeal. Both cases have practically the same facts. The defendants-appellees borrowed money on promissory notes from the plaintiff-appellant. Each note was in the amount of $500. While the original notes were still in effect and up to date, the defendants obtained additional sums of money from the plaintiff. Barnes obtained $85.52 and Blair obtained $120.59. The old notes were destroyed and new notes written for the amount of $500.

The defendants executed financial statements which were false in that they did not list all of the debts and obligations of the defendants.

Thereafter, defendants filed bankruptcy proceedings and received discharges therein.

The lower court awarded judgments for the plaintiff in the amounts advanced on the second transactions and not the $500 asked.

The appellant has appealed the judgments, claiming that the trial court misinterpreted the effects of the bankruptcy act and the amendments thereto.^[1]

These are not cases where the plaintiff brought suits on promissory notes and the defendants pleaded bankruptcy as a defense, and this Court does not interpret the bankruptcy act or amendments thereto.

The plaintiff sued in pleas of trespass on the case for the balances due on loans obtained by false financial statements.^[2]

In an action for fraud the burden of proof is upon the party who alleges fraud. It is incumbent upon the party to prove that he has suffered a loss directly from, and as a clear consequence of, the fraud. As stated in Findlater v. Dorland (1908), 152 Mich. 301, 308: "`"The damage to be recovered must always be the natural and proximate consequence of the act complained of."'"

The trial judge correctly held that the damages to the plaintiff were the moneys advanced at the time the false financial statements were made by the defendants. Judgments affirmed. Costs to appellees.

HOLBROOK and T.G. KAVANAGH, JJ., concurred.

NOTES

[1] See 11 USC, § 1 et seq., as amended. — REPORTER.

[2] Summons, affidavits of accounts, and bills of particulars filed in the municipal court of Muskegon.