Pierce v. Shippee

Mr. Chief Justice Craig delivered the opinion of the Court: This record contains no evidence which would warrant the jury in finding that the debt was created by fraud. So far as is shown by the proofs, the money was obtained in good faith and invested as was contemplated by the parties. The speculation did not, however, prove to be a fortunate one, and hence the loss, and consequent liability of the defendants, but the transaction by which the defendants became indebted to the plaintiff is divested of any element of fraud, so far as we can perceive from an examination of the evidence. It will not be necessary, therefore, to spend any time over this branch of the case. The next question that arises is, whether the debt was created by Shippee while acting in a fiduciary capacity, If it was, his discharge in bankruptcy would not relieve him from the liability incurred. The money which the plaintiff furnished the defendants was furnished under a contract, which must determine the character and nature of the debt. That contract was, in substance, that plaintiff would furnish the money necessary to buy a certain quantity of corn. Defendants were to furnish the cribs, do all the work, and bear all the expense, and when the corn should be sold each party was to have one-half of the amount the corn brought, after first deducting the amount paid for the corn when purchased. If the corn should not sell for as much as was paid for the same, then defendants were to pay the plaintiff one-half of the loss. As appears, the corn was bought, cribbed, and in the following spring shipped, and sold at a heavy loss. We perceive no element in the transaction which would make it a fiduciary debt. The money was invested in corn, as agreed upon. The corn was cribbed as contemplated, held as understood. The fact that the corn was not bought in the name of the plaintiff or shipped in his name, if such be the fact, does not change the character of the transaction. Here was a limited partnership created, where the parties to the contract were to share in the profits and losses of the enterprise. The defendants were not trustees of the plaintiff, nor does the transaction disclose any relation of trustee and cestui que trust. The case of Matteson v. Kellogg, 15 Ill. 547, cited and relied upon by the plaintiff, is so different in its facts that it can not be regarded as an authority in this case. There, money was received under a written agreement by which Wright bound himself to buy a quarter-section of land in Warren county for certain parties; he failed to use the money for the purpose for which it was furnished him, and it was there held his discharge in bankruptcy did not release him from the debt. It was there said : “Where one receives the money or property of another as agent or bailee, the title to which is to remain in the principal, and which is to be paid over or delivered to him, or to be used in a particular way, or for a specified purpose, for his use, then the money or property is received or held in a fiduciary capacity, or as trustee.” In Chapman v. Forsyth, 2 Howard, 202, it was held that a factor who receives the money of his principal is not a fiduciary, within the meaning of the Bankrupt act. In that case it was said: “If the act embraced such a debt, it would be difficult to limit its application. It must include all debts arising from agencies, and, indeed, all cases where 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.” There is no material difference between the language of the Bankrupt act of 1841 and the present act, so far as this question is concerned, and under the decision last cited it would be impossible to make the defendants fiduciary debtors. So far as the evidence shows, the only default of the defendants arises from the fact that they failed to pay over to the plaintiff one-half of the money he advanced with which the parties engaged in the speculation. This default is not a breach of trust,—it is a mere breach of contract; and should this undertaking be held to be a fiduciary obligation within the meaning of the act, upon the same principle almost every legal or equitable obligation of a debtor would have to be included within the same list. We are satisfied the verdict is in accordance with the preponderance of the evidence, and perceive no ground for disturbing it. The judgment will be affirmed. Judgment affirmed.