54 Ala. 378 | Ala. | 1875
The first section of the bankrupt law of 1841, provided: “All persons whatsoever residing in any State, territory, or district of the United States, owing debts, which shall not have been created in consequence of a defalcation as a public officer, or as executor, administrator, guardian, or trustee, or while Acting in any other fiduciary capacity,” should,( on compliance with its terms, receive a discharge from the payment of debts. The exception--was of debts, fvorñ the operation of the discharge, not of yierscms owing such debts, from the privileges of'the law. In Chapman v. Forsyth, 2 How. 202, the supreme court of the United States, determined that a debt due from a factor to his principal, for moneys received on a sale of cotton, was not a debt created by defalcation, in a fiduciary capacity, and was within-the operation of the bankrupt’s discharge. The decision was followed in Austell & Marshall v. Crawford, 7 Ala. 335. It was urged by counsel, in the argument of that case, that the law of this State, the parties residing and contracting, and the agency having been executed here, must fix the character of the relation of factors to their principals, and of the debts due from them in the execution of. their agency. The statute punishing criminally a willful conversion by a factor of the goods or moneys of his principal, it was insisted, fixed the character of the debts due from him, as created in consequence of a defalcation, while acting in a fiduciary capacity. It was said by the court, the pleadings did not disclose the offense punishable by the statute; but, independent of that consideration, the operation and construction of the bankrupt law must be the same all over the United States, not váried by the local laws of the several States; and the meaning of the terms employed in it must be ascertained from the common law.
The 33d section (§ 5117 of the Bevised Statutes) of the
It is certainly true, as a general rule in the construction of statutes, that general words preceded or followed by particular words, in the same or a subsequent clause, are qualified and restrained by the particular words. Though the supreme court of the United -States, in Chapman v. Forsyth, assigned as a reason for holding the debt of a factor not excepted from the operation of his discharge in bankruptcy, that the trust of his relation was an implied, not an express trust, and, therefore, not ejusdem generis, with the express trusts particularized, as those of an “executor,” “administrator,” “guardian,” or “trustee,” and that the general words or “other fiduciary capacity” must be limited to the class of trusts particularized, we do not understand the decision to rest on that reasoning alone. It rests on the broader ground, stated by the court in these words: “If the act embraces such a debt it will be difficult to limit its application. It must include all debts arising from agencies"; and, indeed, all cases when the law implies an obligation from the trust reposed in the debtor. Such a construction would have left but few debts on which the law could operate. In almost all the commercial transactions of the country, confidence is reposed in the punctuality and integrity of the debtor, and a violation of these is, in a commercial sense, a disregard of a trust. But this is not the relation spoken of in the first section of the act.” • *
In England bankrupt laws were originally framed to operate only on traders or merchants. The statute of 6 Geo. 4, collected in one clause the various denominations of traders, subject to bankrupt proceedings, in these general words: “All persons using the trade' of merchandise by way of bargaining, bartering, commission, consignment, or otherwise, in gross or by retail, and all persons who, either for themselves or as agents or factors for others, seek their living by buying or selling,” &c. — 1 Eden on Bank. 3. The bankrupt law of 1800, following the English precedents, was limited in its operation to “merchants, or other persons, residing within the United States, actually using the trade of merchandise, by buying and selling in gross or by retail, or dealing in exchange, or as a banker, broker, factor, underwriter or
Bankrupt laws are inseparably associated with commerce and its pursuits. They had their origin in commercial countries, and were intended to advance the interests and promote the convenience of commerce. Whether including or omitting the discharge of a debtor from all further liability, on a cession or surrender of his property; and whether confining its remedies to involuntary proceedings against a debtor, or permitting him voluntarily to make the surrender, entitling .him to a discharge; whether subjecting only particular classes, or all debtors to their operations, is matter of legislative policy. The law remains an outgrowth of commerce, intended for its interest and convenience. A bankrupt law excluding any class of merchants from its operation, -would to that extent depart from the policy and pur
Trustees and agents of the character of which we speak, cannot mingle with their own the funds they may receive in their representative character. If deposited in a bank, they must be deposited as trust funds. Mingling or depositing them as his own, is a destruction of the means of tracing and identifying them, and is a conversion rendering him absolutely liable for them. The business of a factor is not confined to a single transaction, with a single individual. It extends to a number of persons, and varied transactions. A cotton factor but seldom sells, or can- in one sale dispose of the cotton of one customer only. He sells a certain number of bales classified according to quality, the price varying according to the classification, and the aggregate proceeds of sale are paid to him. The cotton was the property of several customers, to whom he must separately account, when it is ascertained how much of the differing qualities of cotton each owned. Until then the proceeds of sale are necessarily mingled with his own funds, or if deposited, are incapable of deposit otherwise than in his own name. If lost because of such mingling, or of such deposit, it cannot be properly said he is guilty of a defalcation, which imports a breach of duty, legal and moral.—Vail v. Durant, 7 Allen, 408. A debt would be due from him to his principal he would be bound to pay, but it could not be said he had appropriated or embezzled the money of his principal.
The course of business pursued by cotton factors, certainly involves, as does all business, trust and confidence, extended by those who consign to them. The trust and confidence is
It is a general rule of statutory construction, that when a statute has received a known judicial construction, and is substantially re-enacted, the legislature is presumed to adopt such construction. The words of the act of 1841, “fiduciary capacity,” and the words of the present law, “fiduciary character,” are the same in signification in the connection in which they are found. The words of the act of 1841 had received a well known and fixed judicial construction. It was in view of this construction, as we believe, that only these general words, embracing the specific trusts enumerated in the act of 1841, and all kindred trusts, were employed to denote the fiduciary debts, which should remain unaffected by the bankrupt’s discharge. There is now, as there was in the act of 1841, an express exclusion of debts created by fraud or embezzlement, or by defalcation as a public officer, but trust or fiduciary debts, are defined only by the general words, “while acting in any fiduciary character.” Because of the judicial construction these words had received, no necessity existed for an enumeration of the specific fiduciary capacities with which they had been previously associated.—Cronan v. Cotting, supra. If congress had intended the meaning given them by judicial construction should be enlarged, and the operatioñ of the law lessened by the exclusion of a class of persons, who had been the subjects of all former bankrupt laws, the intention would have been expressed in clear and well defined terms, such as are employed in reference to debts, created by fraud or embezzlement, or by defalcation as a public officer.
We hold a debt due from a factor for the proceeds of goods