New Orleans Republican. [volume] (New Orleans, La) 1867-1878, 1873-03-04
suit agaisst a Bankrupt Firm-impoFtant
Decision.

In she Sixth District Court, yesterday,
in tho case of +. j. Chapman & Hess VS..
Given, Watts & CO., Judge Saucier gave
Judgment in tayer of the defendants with
oosts.
The case presents the mooted question
whether the debt Of factor, or commission
merchant, for goods sold by him on com
mission is debt created in fduciary
character" within the meaning OF the
thirty-thrd section of the bankrupt act,
not covered by the debtors discharge in
bankruptcy.
Plaintiffs allege that in March or April,
1867, they shipped and consigned to defend
ants, then carrying on general commits
sion business in this city, pork, lard and
other produce, with instructions to sell the
Same on commission, and TO remit the net
proceeds of sale thereof; that defendants
accounted for the net proceeds of the sales
of portion of the produce, but wholly
failed to account fer the proceeds of
the sales of the remainder, amount
ing TO the sum of S2l60 Al. De-
PENDANTS admit the shipment, re-
Ceipt and sale Of the produce, but allege.
that The consignment was one OF many
transactions had between tho parties, in
which no other relation existed but that of
debtor and creditor; that said transactions
were embodied in running accounts, which
huctuated, and in which interest was ri
lowed and received, according to the course
of business followed by them, of which,
:hey aver, plaintiffs had actual knowledge:
that there was balance dne to plaintiffs
on said accounts, which they can not specify
i'll the absence of their books.
Defendants aver that the balauce cCnsti-
tutps an ordinary debt. which was due prior
to February %, 1868, the day on which they
filed their petitions in bankruptcy, and
provable against themselves and their
estates, under the bankrupt act. They
plead their discharge in bar to this action.
Tho evidence shows that the produce
shipped by plaintiffs was received by de-
PENDANTS on the thirteenth of April, 1867,
and sold as follows: In April to an smOunt
OF SI72 10, leaving, after deducting charges
and commissions, the balance now claimed,
say S2l60 A, that early IN May, 1867, de-
PENDANTS failed that after their suspension
they received the proceeds of the sales of
the remainder of the consignment, and, on
the twenty seventh of the same month, paid
the net proceeds thereof, say ell39 -, to
plaintiffs.
Defendants aver that they made this pay
ment because they considered that the
amount, having come into their hands after
their suspension, was held by them in trust.
Judge Saucier concludes his opinion in
this Language:
In the case at bar, the de bt Of the defend
ants arose from the sale of the produce
Ihey mingled the proceeds with their own
funds In rendering their accounts, they
charged themselves with the proceeds of
sale, and credited themselves with the
commission and expenses thereon. This, it
seems, the course and usage of business
permit them to do. The balance must be
held 10 be debt that al oso prior to and in |
ot their Euhseurent default.
They have failed and become unable to |
pay It. Can 1t bs treated AS Debt created |
by their detalcation while acting in % fdu- |
ciary characterl think not.
1t is ordered, adiudgcd and decreed that |
there be indignant in favor of the defend !
ants, with r"sts. I: