Court Opinion

ID: 5585701
Source: CourtListenerOpinion
Date Created: 2022-01-11 01:52:50.433826+00
Date Added: 2024-06-11T08:36:14.223873
License: Public Domain

Atkinson, J.,
dissenting. As originally enacted, § 17 of the bankruptcy act provided: “A discharge in bankruptcy shall release a bankrupt from all his provable debts, except such as . . (2) are judgments in actions for frauds, or obtaining property by false pretenses or false representations, or for willful and malicious injuries to the person or property of another; . . . (4) were created by his fraud, embezzlement, misappropriation, or defalcation while acting as an officer or in any fiduciary capacity.” This was amended by act of February 5, 1903, so as to read: “A discharge in bankruptcy shall release a bankrupt from all his provable debts, except such as . . (2) are liabilities for obtaining property by false pretenses or false representations, or for willful and malicious injuries to the person or property of another, or for alimony due or to become due, or for maintenance or support of wife or child, or for seduction of an unmarried female, or for criminal conversation; . . or (4) were created by his fraud, embezzlement, misappropriation, or defalcation while acting as an officer or in any fiduciary capacit3r.” Applying this law to the facts stated in the question propounded by the Court of Appeals, the debtor’s discharge in bankruptcy would pre*373vent any money judgment against him in the bail-trover action. The bill of sale was a mere security for debt, which debt was dis-chargeable in bankruptcy. It was the duty of the bankrupt to deliver possession of the property described in the bill of sale to the trustee in bankruptcy, in whom the debtor’s equity of redemption vested by operation of law. The delivery of the property and discharge in bankruptcy did not affect the security of the holder of the bill of sale. The rights of the holder of the bill of sale could be asserted in the court of bankruptcy or in the hands of purchasers at sales made in the court of bankruptcy. But the fact that the debtor delivered the property to the trustee in bankruptcy as it was his duty to do did not amount to a fraud or to a willful ■ trespass, or the like, which would bring the transaction within the exceptions stated in •§ 17 of the bankruptcy act as amended. On the facts stated in the question propounded by the Court of Appeals, when the plaintiff elected to take a money verdict, as he was authorized by the statutes of this State to do (Civil Code, § 5930; Acts 1860, p. 43), the obligation of the debtor to pay such money demand would fall within the general provisions of the bankruptcy act above mentioned, and not within any of the exceptions. To hold otherwise would deny full effect to the clear meaning and intention of the bankruptcy act and put the statute of the State above the Federal statute. It is apparent that the case is different on its facts from those involved in McIntyre v. Kavanaugh, 242 U. S. 138 (supra). The facts in that case are sufficiently indicated by the statement in the syllabus which follows: “One who, being entrusted with the possession of corporate stocks as security for an indebtedness, deliberately sells them and appropriates the proceeds, in excess of the debt secured, without the knowledge or consent of their owner, is guilty of a ‘willful and malicious’ injury to property within the meaning of § 17, clause 2, of the bankruptcy act, as amended by the act of February 5, 1903, 32 Stat. 798, and, consequently, his liability is not released by a discharge in bankruptcy.” If what is stated above conflicts in any way with Berry v. Jackson, 115 Ga. 196 (supra), in which the defendant was in possession of the property at the time the suit was brought, the ruling in that case, not being by an entire bench of six Justices, is not binding as a precedent and should not be followed.