In re Kimball

14 F. Cas. 478 | U.S. Circuit Court for the District of Southern New York | 1869

NELSON, Circuit Justice.

The application for the discharge of the bankrupt from arrest is founded on the latter clause of the 26th section of the act, which provides, that “no bankrupt shall be liable to arrest during the pendency of the proceedings, in bankruptcy, in any civil action, unless the same is founded on some debt or claim from which his discharge in bankruptcy would not release him.” The 33d section provides, that “no debt created by the fraud or embezzlement of the bankrupt, or by his defalcation as a public officer, or while acting in any fiduciary character, shall be discharged under This act” The district court held that the debt in tliis case was created by the defalcation of tlie debtor while acting in a fiduciary character, and would not be discharged in bankruptcy, and, hence, refused to discharge him from arrest. I am inclined to concur in this opinion. [Case Ko. 7,7GSJ I concur the more readily, as the decision of the question by the district court extends, in its operation and effect, only to the matter of arrest, and dpes not affect the question ultimately to be determined, whether the debt will or will not be discharged by a discharge in bankruptcy. The simple question here is, under the 20th section, whether the court will discharge the bankrupt from arrest during the pen-dency of the proceedings, and nothing more; and this must depend upon the case presented on which the arrest was made in the action in the state court. Looking at it as thus presented, it seems to me there is great difficulty in saying that the flour was not received and held by the bankrupt in a strictly fiduciary character. The article was placed in his possession simply to sell it, and to remit the proceeds over and above his commission. The money was not the bankrupt’s when it was received on the sale, but was tlie money of the owner of the flour. It was a gross breach of trust to apply it to his own use. I have looked at the ease of Chapman v. Forsyth, 2 How. [43 U. S.] 202, but do not regard it as controlling the one in hand. The provision in the present act is much broader than that in the act of 1S41 [3 Stat. 440], The order of the district court is affirmed.