Court Opinion

ID: 3666933
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:16:42.394927+00
Date Added: 2024-06-11T14:08:45.464921
License: Public Domain

If the facts in this case do not establish a loan of money to Devereux 
McMahon, they certainly make a case of a regular deposit, which authorized the firm to mix this money with their other moneys, and use it as their own until applied for by the depositor. It seems to us that the transaction can receive no other reasonable construction.
This money originally came to the hands of Devereux  McMahon, a firm in credit, as a special deposit, to be kept in their iron safe; but they having used, it or reported the fact to Mr. Hill, the depositor, when he assented thereto and agreed that they might continue to use the money, upon condition that it should be repaid whenever needed.
When Fitzpatrick succeeded Hill as Clerk and Master, he did not require his predecessor to collect this money and pay it over to him, nor did he require Devereux  McMahon to count it out, so that he could separate it from their moneys, put it into a package and make a special deposit of it in their iron safe; but he contended himself with the assurance that the money was all on hand, and gave his predecessor a receipt for the same, and took from the firm of Devereux  McMahon the following paper: "Received of T. Fitzpatrick, Clerk and Master in Equity for the county of Halifax, State of North Carolina, eight hundred and fifty-one dollars, being the same received by him of T.N. Hill, in the case of J. W. Tatem v. J. H. Everettand Hill and Anthony, which we are to return upon application." That Fitzpatrick regarded this transaction *Page 467 
as one authorizing Devereux  McMahon to handle this money and treat it as a general deposit, is established beyond doubt by the fact that when three hundred and eighty dollars of the amount was needed to comply with orders of the Court, Fitzpatrick did not call for his special deposit and take therefrom that sum, but he demanded payment of Devereux  McMahon, and when they did pay out of their general moneys, he made the following endorsement on the paper they had given him, to-wit: "Received on the within, the sum of eighty dollars," c. The paper called "the within" was evidently the security to which he then looked, and the idea of a special deposit had not at that time entered his head. The defendant, admitting his original liability, pleads in bar of this action his discharge in bankruptcy. To which the plaintiff replies "that no debt created by the fraud or embezzlement of the bankrupt, or by his defalcation as a public officer, or while acting in any fiduciary character, shall be discharged under this act." Section 33, Bankrupt Act.
The Bankrupt Act is a statute of repose, highly remedial in its character, and should be liberally construed. But if the 33d section be strictly construed and applied in its utmost rigor, it cannot embrace, under any of its heads, the case before us.
The defendant was not a public officer, nor was he acting in a fiduciary character. Williamson v. Dickens, 5 Ired. 257; Cronan v. Cotting, 104 Mass. Rep., 245; Grover  Baker v. Clinton, 8 Nat. Bank. Reg. 312.
Admitting that the use, by the defendant, of the special deposit made by Hill, would have amounted to fraud or embezzlement within the meaning of the Bankrupt Act, yet that was condoned by Hill, and express permission given by him to the firm, to use the money until demanded.
And as we have already seen such continued to be the contract between Fitzpatrick and the firm of Devereux  McMahon until the defendant became insolvent.
The judgment of the Superior Court is affirmed.
PER CURIAM.                                 Judgment affirmed. *Page 468