Suydam v. Belknap

Headnote

Discharge from arrest undea' the insolvent law — when granted — the fact that the defendant converted money received in a fiduciary capacity does not prevent his discharge.

Appeal by an opposing judgment creditor from an order discharging the defendant from arrest, under title 1, chapter 5, article 6 of part 2 of the Revised Statutes.

The petitioner was arrested in this action, brought by the above named appellant, for converting to his own use moneys and securities belonging to the appellant, while acting in a fiduciary capacity. Petitioner was imprisoned in default of procuring bail in the amount of thirty-five thousand dollars.

Judgment was subsequently entered and an execution duly issued against the petitioner’s person. Subsequently the petitioner brought these proceedings pursuant to the above title of the Revised Statutes for his discharge.

The petitioner was duly examined under the proceedings, and his testimony showed that after accepting the trust reposed in him he fraudulently and in violation of said trust used the money and property of the appellant for his own personal use and benefit.

Notwithstanding these facts Mr. Justice Westbrook held that the petitioner was entitled to his discharge, on the ground that the evidence did not show that he disposed of or made over any part of Ms own property with a view to the future benefit of himself or his family, or with an intent to injure or defraud any of his creditors.

The court, at General Term, said: “This case is distinguishable from that of In re Brady ( 69 N. Y., 215 ), because the charge is that the defendant received money in a fiduciary

capacity for which he has not accounted. The defendant Brady was charged with a disposition of his property with the intention of defrauding Ins creditors, and for that reason it was held that his proceedings were not just and fair.

“This case docs not show any appropriation of this kind, and therefore that he has property attainable by recourse to his grantee, or otherwise. The money received was disposed of by him, and though improperly used does not subject him to the rule established by the case referred to.

“We cannot say, under the circumstances, that his proceedings have not been just and fair.”