Ehrhart v. Rork , 114 Ill. App. 509 ( 1904 )

Mr. Presiding Justice Baume

delivered the opinion of the court.

Appellee brought this action in assumpsit against appellant, and on the trial recovered a judgment for $107.75 and costs. To the declaration, consisting of the common counts, with a bill of particulars, defendant filed pleas of the general issue and discharge in bankruptcy, on October 5, 1899. Plaintiff replied that the several causes of action accrued to him after October 5, 1899, and that the same were excepted by the provisions of the Bankruptcy Act from the operation of such discharge. The items in controversy are, first, the sum of $55 with accrued interest, paid by plaintiff in liquidation of a note for $70 dated January 10, 1890, upon which he was surety for defendant; second, the'sum of $70 claimed by plaintiff to have been paid by him. to defendant for two abstracts of title prepared for plaintiff by one McIntosh, which amount defendant failed to pay over to McIntosh; and third, the sum of $110 and accrued interest, being the amount of two notes payable to plaintiff and placed by him in defendant’s hands for collection, which plaintiff claims defendant collected or negotiated and failed to account for. The defense as to the first item was payment and as to the second and third, payment and discharge in bankruptcy.

Plaintiff introduced evidence tending to prove a new .promise by defendant, after his discharge in bankruptcy, to pay the third item of the account, and the court gave an instruction authorizing a recovery, based upon proof of such new promise. It is insisted that evidence of a newT promise was not competent under the pleadings and that the instruction should have been refused. Plaintiff did not specifically plead a new promise, but if the evidence was not ■'competent under his replication that the cause of action accrued to him after October 5, 1899, it was introduced without objection, and whether or not a new promise was made, was treated by defendant as a fact properly in issue, by introducing contradictory evidence. Defendant cannot now, for the first time, be permitted to urge that the introduction of such evidence and the giving of an instruction predicated thereon was error. It is insisted by plaintiff that proof that he paid to defendant the sum of $70 to be by the latter paid to McIntosh for the abstracts of title, and that he gave to defendant the two notes in question for collection, established such a fiduciary relation ..between the parties, as, that, within the meaning of section 17 of the Bankruptcy Act, the debt to plaintiff created by defendant’s failure to pay the $70 to McIntosh and his collecting or negotiating the two notes without accounting therefor to plaintiff, would not be released by defendant’s discharge in bankruptcy. The trial court adopted this view, and so instructed the jury. The section in question, so far as it is pertinent to this case, is as follows : “ A discharge in bankruptcy shall release a bankrupt from all his provable debts, except such as * * * (4) were created by his fraud, embezzlement, misappropriation, or defalcation while acting as an officer or in any fiduciary capacity.” v The phrase “ while acting as an officer or in any fiduciary capacity ” does not qualify or limit the words “ fraud, embezzlement, "misappropriation,” that precede it, but only the word “defalcation,” and this section must be so interpreted. Crawford v. Burke, 201 Ill. 581.

There is great contrariety of opinion in courts of last resort, as to the interpretation of the words “ fiduciary capacity ” as used in the section under consideration. However we might be inclined to interpret them if the question was presented as one of first impression, we are bound to follow the interpretation adopted by our own Supreme Court in Svanoe v. Jurgens, 144 Ill. 507. The court in that case, in construing the language of the Bankruptcy Act of 1867 adopted the reasoning of the Supreme Court of the United States in Chapman v. Forsyth, 2 How. (U. S.) 202, wherein it construed somewhat similar language in the Bankrupt Act of 1841, and hold that the words “ fiduciary capacity ” are to be interpreted in a restricted sense, and to include only technical trusts and not such as arise by implication of law from a contract of agency.

In this case the court in instructing the jury misinterpreted section 17 of the act in question, by denominating the relation of the defendant as fiduciary, and in qualifying or limiting the words “ fraud, embezzlement, misappropriation ” by the phrase, “ while acting,” etc. The instructions were also erroneous in authorizing the jury to find the defendant guilty of embezzlement, upon proof merely that he collected money for the plaintiff and appropriated the same. To constitute embezzlement the misappropriation must be intentional and fraudulent. 2 Bishop’s New Crim. Law, par. 352; 1 Wharton’s Crim. Law, par. 1009. In view of the fact that there was evidence tending to prove that plaintiff consented to the appropriation by defendant of the money collected, and knowingly assumed the relation of an ordinary creditor, the instructions should have been qualified as suggested.

The evidence comes far short of authorizing a recovery by plaintiff of the item of $70 paid by him to defendant for abstracts of title prepared by McIntosh. There was no contract relation whatever between plaintiff and McIntosh.' The abstracts of title were prepared by McIntosh upon an order therefor to him by defendant and not by plaintiff, and the charge therefor on the books of McIntosh was made against defendant. The evidence of thetransa ction shows conclusively that the defendant and not the plaintiff was the debtor to McIntosh.

The judgment is reversed and the cause remanded.

Reversed, and remanded.