Hardenbrook v. Colson

Hardin, J. It was decided by this department in Whittaker, treasurer, etc., agt. Chapman (3 Lansing, 155), that a debt due from a factor for goods sold by him on commission, is a debt created in a fiduciary character, within the meaning of the bankrupt act of 1867, and is not covered by the debtor’s discharge in bankruptcy. This case'-has not been [431] overruled. It has been referred to and approved by subsequent cases. It was quoted by Miller, J., in Barber agt. Sterling (68 N. Y., 273; see, also, 53 N. Y., 260); Platt agt. White (5 Denio, 271; 50 Barb., 288; 70 N. Y., 486). Section 5117 of the laws of the ¡Revised Statutes of United States is as follows, viz.: “Ho debt created by * * * the bankiupt * * * while acting in any fiduciary character shall be discharged by proceedings in bankruptcy.” It has been held that the meaning of the words “fiduciary capacity ” having been ascertained and declared by judicial construction of the act 1841, is affixed to the term, and the fixed definition is carried into the new statute 1867 (104 Mass., 245). It was held in Johns agt. Russell (11 B. R., 478), that an auctioneer acts in a fiduciary capacity, or character, and his discharge does not relieve him from his liability for goods placed in his charge for sale (See Cardin agt. Cardin, 8 Barb., 41, and Hullibent agt. Carter, 10 N. B. R., 359, and 155 Mass., 435 ; Treadwell agt. Halloway, 12 N. B. R., 61, and 46 California, 547). The appellant’s learned counsel cite Hennequin et al. agt. Clews (77 N. Y., 427), and argues that it is an authority upholding a contrary doctrine. We do not so understand that case. The defendant had received certain securities as pledge, with no other rights with respect to them than such as that relation entitled him to—and had wrongfully hypothecated and sold them. The court held that his discharge in bankruptcy operated upon the plaintiff’s claim, and the defendant was not, after such a discharge, liable to an order of arrest. Hor does the case of Neal agt. Clark (95 U. S. R., 704), aid the appellant. The case simply holds that an executor who, without any positive, active, affirmative fraud, had committed a devastavit, was discharged in proceedings in bankruptcy. Hor can the composition proceedings have any greater effect than would a discharge. If one would not cut off the debt, the other would not (Libbey agt. Strasburger, 14 Hun, 120; Argall agt. Jacobs, 21 Hun, 115). The second defense predi [432] cated upon a separate independent contract, was improperly stricken out (Patterson agt. Richardson, 22 Barb., 145; Bank agt. Monteith, 39 N. Y., 297; Chambers agt. Lewis, 11 Abbott, 110 ; Allen agt. Patterson, 3 Seldon, 476; 53 N. Y., 307; 42 N. Y., 83). There was evidence upon which the jury were warranted in finding there was no authority to sell upon credit, and there was no proof of a custom to sell on credit shown to have been known to plaintiff (50 Barb., 288). We see no other error in the course of trial calling for a reversal of the judgment. Judgment reversed and a new trial ordered, with costs to abide the event, unless the plaintiff stipulates to reduce the verdict and judgment by deducting therefrom twenty dollars and interest from the 30th day of "November, 1873, in which case the judgment as so modified is affirmed with costs. Taloott, P. J., and Smith, J., concur.