Brown v. Hannagan

• Decision Date: 29 November 1911
• Citation: 96 N.E. 714,210 Mass. 246
• Parties: BROWN v. HANNAGAN et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

210 Mass. 246

96 N.E. 714

BROWN v. HANNAGAN et al.

Supreme Judicial Court of Massachusetts, Essex.

November 29, 1911

COUNSEL

W. E. Dorman and Guy Newhall, for complainant.

J. J. Sullivan, M. A. Sullivan, and E. J. Wade, for defendants.

OPINION

DE COURCY, J.

The defendant Hannagan (hereinafter called the defendant) was executor of his mother's will, and as such executor collected her life insurance. The plaintiff was named in the policy as a beneficiary to the extent of two-fifths. The insurance money was deposited in a national bank by the defendant in his own name, and as the plaintiff's share never was paid to him nor turned over to the estate it must be assumed that it was appropriated by the defendant to his own use. The main question in the case is whether the plaintiff's claim is barred by the defendant's discharge in bankruptcy.

Upon the facts stated in the report the plaintiff's claim, originally at least, was a debt created by the defendant's misappropriation while acting in a fiduciary capacity. Crisfield v. State, 55 Md. 192. Such debts are expressly excepted from the operation of the bankrupt's discharge, by clause 4,§ 17, of the bankruptcy act (Act July 1, 1898. c. 541, 30 Stat. 550 [U. S. Comp. St. 1901, p. 3428]).

It cannot be successfully contended that the fiduciary character of the debt was affected by the acts of the defendant in depositing this money in his individual name, giving to the plaintiff a check drawn on that deposit and stopping payment at the bank before the check could be collected. Nor did the proving of the claim in bankruptcy change the relations of the parties to those of creditor and debtor. Tallant v. Stedman, 176 Mass. 460, 57 N.E. 683; Madison v. Dunkle, 114 Ind. 262, 16 N.E. 593. And under the bankruptcy act the original character of the liability was not lost by being reduced to judgment. Lee v. Tarplin, 194 Mass. 47, 79 N.E. 786; Boynton v. Ball, 121 U.S. 457, 7 S.Ct. 981, 30 L.Ed. 985; Packer v. Whittier, 91 F. 511, 33 C. C. A 658; Murphy v. Manning, 134 Mass. 488; Way v. Brigham, 138 Mass. 384; Haggerty v. Badkin, 72 N. J. Eq. 473, 66 A. 420.

We are of opinion that the plaintiff's judgment was exempted from the operation of the defendant's discharge in bankruptcy. In accordance with the report the case is to stand for further hearing on the other question in issue.

So ordered.