In re McGiboney, Bankruptcy No. 80-04234
| Decision Date | 17 February 1981 |
| Docket Number | Bankruptcy No. 80-04234,Adv. No. 80-0975. |
| Parties | In re Larry W. McGIBONEY, Debtor. BIRMINGHAM TRUST NATIONAL BANK, Plaintiff, v. Larry W. McGIBONEY, Defendant. |
| Court | United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Northern District of Alabama |
Alan D. Levine, Levine & Levine, Birmingham, Ala., for Birmingham Trust Nat. Bank.
James B. Morton, Birmingham, Ala., for debtor.
Jerry W. Schoel, Birmingham, Ala., trustee.
Jack Rivers, Birmingham, Ala., U.S. trustee.
The facts alleged in the Complaint for non-dischargeability are based on the allegations of a "willful and malicious conversion" of a vehicle. There is no provision in the Bankruptcy Code for a "wilful and malicious conversion." The former provision in the Bankruptcy Act in Section 17(a)(2) ". . . or for willful and malicious conversion of property of another;" was not carried into the Code. However, Section 17(a)(8) of the Act which provides ". . . are liabilities for willful and malicious injuries to the person or property of another . . ." was re-enacted as clause (6) of Section 523 of the Code as "for willful and malicious injury by the debtor to another entity or to property of another entity."
Did the drafters of the Code intend to eliminate acts of willful and malicious conversion as grounds for objection to the discharge? No.
No doubt the legislative intent was to eliminate a superfluous provision which had only a brief appearance in the Bankruptcy Act by the advent of the Dischargeability Act of 1970 which provision really contributed nothing to existing law.
It may also have been the congressional intent to retain Mr. Justice Peckham's famous definition and characterization of "willful and malicious" as "a willful disregard of what one knows to be his duty, an act which is against good morals and wrongful in and of itself, and which necessarily causes injury and is done intentionally" as amended by Mr. Justice Cardozo in Davis v. Aetna Acceptance Co., 293 U.S. 328, 55 S.Ct. 151, 79 L.Ed. 393, 26 A.B.R. (New Series) 577, in the following words:
For many years prior to 1970, clause (8) of Section 17 was construed to include "willful and malicious conversion" under the terms of "willful and malicious injuries to property of another." Collier 17a(8), page 1650.3 et seq. Professor Vern Countryman discusses these legislative variations in his article "The New Dischargeability Law," The American Bankruptcy Law Journal, Vol. 45 (Winter 1971), much of which does not pertain to the question at hand, although it is a magnificent commentary any Bankruptcy Judge should find interesting reading no matter how much experience he has had.
The carrying into the Code the phrase "willful and malicious" adopts all the gloss these words have gathered by judicial interpretation over the years. The concept announced in Tinker v. Colwell, 193 U.S. 473, 24 S.Ct. 505, 48 L.Ed. 754 (1904); Crawford v. Burke, 195 U.S. 176, 25 S.Ct. 9, 49 L.Ed. 147 (1904); McIntyre v. Kavanaugh, 242 U.S. 138, 37 S.Ct. 38, 61 L.Ed. 205 (1916); Davis v. Aetna Acceptance Co., 293 U.S. 328, 55 S.Ct. 151, 79 L.Ed. 393 (1934), and the line of cases cited in Vol. 1A Collier, 14th Ed. starting at page 1650.3 have evolved a definition and meaning to a phrase peculiarly federal. We, who for many years, have had to interpret and translate state court judgments based on laws wholly reft and lacking of any such concept, had hoped for a congressional definition that would be easy to follow in classes of cases, such as driving while intoxicated, excessive speed, hitting non-moving or parked cars, running stop signs, selling out of trust, fraud and false pretenses and a myriad of others. The list would run the gamut of tort action or wrongful conduct and no one could compile an all inclusive list.
It seems no such specific detail of non-dischargeable acts is possible and none has been attempted.
Wantonness in the state law is an established field of liability, but a pleader casting his lot on allegations of willful and malicious conduct often ended up on the shoals of disaster for lack of proof. The Supreme Court of Alabama finally ruled that the words mean the same thing and are "tantamount." Pridgen v. Head, 282 Ala. 193, 210 So.2d 426; Feore v. Trammell, 213 Ala. 293, 104 So. 808 (1924).
However, Federal Courts are not bound by State Court interpretation of Federal questions and the phrase is peculiarly federal. In re Cox, 543 F.2d 1277, 1280; see also, 36 C.J.S. Federal Courts' § 169(1), (2) and (3).
There is, as stated above, a well defined body of federal cases stating a well defined pre-code meaning of general acceptance. Collier states it in a somewhat modified form as quote:
Note the large number of state court cases cited indicating state court interpretation of a federal statute. This has caused some variation in interpretation which will not likely occur under the Code.
Since willful and malicious are in the conjunctive both elements must be present. Willful means done with the will or intentionally, and not inadvertently or negligently. Malicious is not used in the sense of evil, personal ill will or hatred, but simply done consciously and knowingly wrongful, and without just cause or excuse.
Intent to harm or injure is not required. Intent to do the wrongful act is sufficient and that constitutes the willful part of the act. Unintentional, negligent or technical conversion may not be willful, but note how one can become enmeshed in a shaded area. Morals may or may not be involved in a wrong.
Judging human conduct is always difficult. When asked why they sold the creditor's furniture, the bankrupt replied, "Because I was hungry"; "My baby had no clothes";...
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