Keefauver v. Hevenor

148 N.Y.S. 434 | N.Y. App. Div. | 1914

McLaughlin, J.:

Appeal from an order denying the judgment debtor’s motion for a stay of proceedings supplementary to execution. The stay was asked for on the ground that the judgment to recover which the proceedings were instituted had been discharged in bankruptcy.

The moving papers show that the claim of the judgment creditor was duly set forth in the bankruptcy petition. The affidavits used in opposition to the motion do not deny this fact. They state that the debt was for moneys wrongfully appropriated, and no notice or knowledge of the bankruptcy proceeding came to the judgment creditor or his attorneys of record.

Section IT of the Bankruptcy Act provides that “ A discharge in bankruptcy shall release a bankrupt from all of his provable debts, except such as * * * (3) have not been duly scheduled in time for proof and allowance, with the name of the creditor if known to the bankrupt, unless such creditor had notice or actual knowledge of the proceedings in bankruptcy; or (4) were created by his fraud, embezzlement, misappropriation, or defalcation while acting as an officer or in any fiduciary capacity.” (30 U. S. Stat. at Large, 550, § 1Y, as amd. by 32 id. Y98, § 5.)

Only public officers and trustees, and not agents, factors, commissionmen and the like, are fiduciary debtors within the meaning of subdivision 4. (Collier Bankruptcy [9th ed.], 402; Crawford v. Burke, 195 U. S. 176; Tindle v. Birkett, 183 N. Y. 267; affd., 205 U. S. 183.)

The papers used upon the motion show that the judgment was not recovered on a fiduciary debt as contemplated by this section.

It is not disputed that the claim was duly scheduled, and, therefore, it seems unnecessary to inquire whether the judgment creditor had the notice contemplated by subdivision 3. But however that may be, it does appear from the record that he did have notice. He had employed another attorney to collect the judgment, and the. attorneys of record had, so far as appears, no connection with the judgment or its collection, at the time the bankruptcy proceedings were pending. Notice to the attorneys of record, under such circumstances, would have served no useful , purpose. (Matter of Quackenbush, 122 App. Div. 456.) But while the bankruptcy proceeding was pending, and in ample time to avail himself of its benefits, the judgment creditor had notice through the attorney employed to collect the judgment. This attorney was told of the proceeding and that he could come in and prove the judgment if he so desired. But instead of doing so he instituted, before the discharge in bankruptcy, proceedings supplementary to execution — evidently believing that the indebtedness which resulted in the judgment was that of a fiduciary and for that reason the judgment would not be affected by a discharge. The judgment as indicated was not recovered upon a debt of a fiduciary character.

The order appealed from, therefore, is reversed, with ten dollars costs and disbursements, and the motion granted, with ten dollars costs.

Ingraham, P. J., Scott, Dowling and Hotchkiss, JJ., concurred.

Order reversed, with ten dollars costs- and disbursements, and motion granted, with ten dollars costs.