South Atlantic Guano Co. v. Childs

SOMERVILLE, J. In Butler-Kyser Mfg. Co. v. Mitchell, 195 Ala. 240, 70 South. 665, following Crawford v. Burke, 195 U. S. 177, 25 Sup. Ct. 9, 49 L. Ed. 147, and other federal decisions, we held that where goods were consigned by the owner to another for sale on commission, the title to remain in the consignor, and the consignee to account for the proceeds, the breach of the latter’s obligation to so account was not a debt “created by his fraud, embezzlement, or misappropriation, or defalcation, while acting * * * in any fiduciary capacity,” and hence was not embraced within tlje class of debts described in subdivision 2 of section 17 of the Bankruptcy Act of 1898 (Comp. St. § 9601), and excepted from the debts that are provable for discharge. But the cases above referred to are readily distinguishable from the case here presented. I-Iere there are express provisions creating a relation of trust and effecting a complete transfer of the proceeds of fertilizer sales, whether in the form of notes, mortgages, or accounts payable to the plaintiff company, which the defendant received back for collection merely as plaintiff’s agent. Under such an agreement, the securities and debts, and all collections made thereon, were the property of plaintiff, morally and legally, and a conversion of them by defendant was an act of misappropriation . while acting in a fiduciary capacity, under subd. 4 of section 17 of the act, and, if willful, was also within the exception of subd. 2; viz., a liability for “willful and malicious injuries to the person or property of another.” Baker v. Bryant Fertilizer Co. (C. C. A.) 271 Fed. 473 (in every material detail like the present case); McIntyre v. Kavanaugh, 242 U. S. 138, 37 Sup. Ct. 38, 61 L. Ed. 205. In our own case of Williams v. Va. Car. Chem. Co., 182 Ala. 413, 62 South. 755, which is, in its material features, indistinguishable from the present case, the same conclusion was reached and declaimed, and the case of Crawford v. Burke, 195 U. S. 176, 25 Sup. Ct. 9, 49 L. Ed. 147, was clearly distinguished. *639 The matters set up in plaintiff’s replications 2 and 3 to defendant’s plea 2 were a good answer to the plea, and the demurrers to the replications were improperly sustained. Let the judgment be reversed, and the cause remanded for further proceedings in accordance with this opinion. Reversed and remanded. ANDERSON, O. J., and THOMAS and BOULDIN, JJ., concur.