68 N.Y. 267 | NY | 1877
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *269
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *270 Under the agreement between the plaintiff, defendant and Elizabeth Sterling, the defendant was to act as the agent of the plaintiff in the repair of the furnace and manufacture of iron which was provided for.
The complaint alleges that he had charge mainly of the sales of iron as well as the manufacture thereof; that he sold and disposed of large quantities thereof, and failed to pay the plaintiff or account to him therefor, but converted the same to his own use, in violation of the provisions of said agreement.
The proof shows and the referee has found, that the defendant sold and disposed of iron and failed to pay over the proceeds of the sales; that he overpaid for labor and materials, and appropriated to his own use profits arising from the buying and selling of lands and personal property. All of these transactions are not especially provided for by the agreement, but the evidence tends to establish that the sales were made by the defendant under and by the authority of the plaintiff, and that the avails of the sales were used in the ordinary course of the business, and an account kept of the same by the defendant. The defendant's duty under the *272 agreement, as already stated, was to act as agent in making repairs and in the manufacture of iron, and what he did beyond this was with the plaintiff's knowledge and assent, and appears to have been quietly acquiesced in. There was no express contract and no relationship of agent and principal agreed upon between the plaintiff and the defendant. But the defendant was interested in the sales, being entitled to a share of the money arising therefrom after certain deductions were made under the agreement. The sales of the land and personal property were also connected with and a part of the other transactions, as well as the payment of the moneys for labor and materials in the business. The defendant was, therefore, acting in part for himself and Mrs. Sterling as well as the plaintiff. They had a mutual interest in all these transactions, and the obligation incurred by him was not a debt created while acting in a fiduciary character, within section 33 of the bankrupt act, which was not and could not be discharged by the proceedings in bankruptcy.
Conceding that the provision of the bankrupt act of 1867 is broader and more comprehensive than that contained in the act of 1841, yet, applying to defendant's acts the effect of such a construction, it is not apparent that defendant occupied a fiduciary relationship, within the authorities to which we have been referred, as is manifest by an examination of these decisions. In each of the cases cited there was a positive and defined relationship between the parties, in which the fiduciary character was entirely apparent. In re Seymour (1 Benedict, 348) goods were deposited with Seymour to be sold by him on commission for the owner, and it was held that this established a fiduciary relationship which charged Seymour with the execution of a trust, under which it was his duty to return the property or remit the proceeds, and his failure to do so was a defalcation while acting in a fiduciary capacity, and that the demand was therefore a debt within section 33 of the bankrupt act which could not be released by his discharge in bankruptcy. This case also holds that the act of 1867 is broader than the act of 1841.Lemcke v. Booth, *273
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Upon such a state of facts a fiduciary relationship cannot be predicated. Clearly it would not be within the intention of the law, or of the parties, but, on the contrary, it would be extremely harsh and unjust, as well as against the spirit of the law to hold that, under such circumstances, a liability was incurred by the defendant while acting in a fiduciary capacity.
The judgment was right and should be affirmed.
All concur, except EARL, J., dissenting.
Judgment affirmed.