Opinion of the Court
the debtor herself—the position that Bartenwerfer advocates here.
But we held otherwise in Strang v. Bradner. In that case, the business partner of John and Joseph Holland lied to fellow merchants in order to secure promissory notes for the benefit of their partnership. 114 U. S., at 557–558. After a state court held all three partners liable for fraud, the Hollands tried to discharge their debts in bankruptcy on the ground that their partner’s misrepresentations “were not made by their direction nor with their knowledge.” Id., at 557, 561. Even though the statute required the debt to be created by the fraud “of the bankrupt,” we held that the Hollands could not discharge their debts to the deceived merchants. Id., at 561. The fraud of one partner, we explained, is the fraud of all because “[e]ach partner was the agent and representative of the firm with reference to all business within the scope of the partnership.” Ibid. And the reason for this rule was particularly easy to see because “the partners, who were not themselves guilty of wrong, received and appropriated the fruits of the fraudulent conduct of their associate in business.” Ibid.
The next development—Congress’s post-Strang legislation—is the linchpin.[1] “This Court generally assumes that, when Congress enacts statutes, it is aware of this Court’s relevant precedents.” Ysleta Del Sur Pueblo v. Texas, 596 U. S. ___, ___ (2022) (slip op., at 13). Section 523(a)(2) is no exception to this interpretive rule. Lamar, Archer & Cofrin, LLP v. Appling, 584 U. S. ___, ___–___ (2018) (slip op., at
- ↑ Bartenwerfer asserts that we should ignore Strang because, as a product of the Swift v. Tyson era, it turned on the Court’s understanding of the general common-law rule rather than its interpretation of the statutory text. 16 Pet. 1 (1842). This argument is a detour we need not take. Whatever Strang’s rationale, it constituted an important part of the background against which Congress drafted the current discharge exception for fraud.
