In re Butts

Citations

• 120 F. 966
• 1903 U.S. Dist. LEXIS 382

Syllabus

<p>1 Bankruptcy — Discharge—Debts Excepted erom Release.</p> <p>Bankr. Act July 1, 1898, § 17, cl. 4 (30 Stat. 550 [U. S. Comp. St. 1901, p. 3428]), providing that a discharge shall release a bankrupt from all provable debts except such as “were created by his fraud, embezzlement, misappropriation, or defalcation while acting as an officer or in any fiduciary capacity,” should be so construed as to include within the exception debts created by fraud, embezzlement, or misappropriation in whatever capacity or relation the bankrupt was acting.</p> <p>2. Same.</p> <p>Goods were shipped to a bankrupt under a written contract which on its face purported to be one of sale and purchase, contemplating that the goods would be resold by the purchaser and payment therefor made at stated times in cash or notes received on sales at prices therein fixed. It contained the words: “For conditions of settlement, see reverse side of contract.” On the back was the provision: “It is agreed that you will hold in trust and separate for the settlement of our account with you all of said goods unsold and all currency, open accounts, notes, liens, mortgages or other values received for goods sold.” Held, that such provisions did not convert the contract from one of sale into one creating a trust and establishing. a fiduciary relation between the parties, nor render the debt from the bankrupt on account of goods sold and not paid for one created by fraud, embezzlement, misappropriation, or defalcation while acting in a fiduciary capacity, within the meaning of Bankr. Act July 1, 1898, § 17, cl. 4 (30 Stat. 550 [U. S. Comp. St. 1901, p. 3428]), so as to prevent its release by a discharge of the bankrupt.</p>