
    Frederick Bissell vs. Benjamin Couchaine.
    Wh^re the facts ¿f a case are submitted to* the Court of Common Pleas without the • intervention of a Jury, and error intervenes m applying the law to such facts, the judgment will be reversed. •* ¡ ’. - ■
    
    If A deliver money to B, which he promises to pay to C, on the note of A, but refuses . so to do, it is not a debt contracted iñ a fiduciary capacity, and is not within the,provisions of the Bankrupt Law of the United .States.
    ■ This suit is brought before the Court by a Writ of Error to the Court of. Common Ple.as of Lucas County. ■
    The’ declaration, sets forthjin substance, that,, on' the 16th day of June, 184Í, the defendant in. error- delivered to the plaintiff in error the: sum of $418 in trust, to be by the pláintiff in error applied in payment and discharge of a certáin promissorynoté foxy $-100, and interest, made by, the'defendant 'in error with Bisselí and Gardner, on the 12th day of June, 1838, and payable to Chandler Knapp, on the first day of December then next;. that- the plaintiff in error promised' to execute the trust,- but had wholly failed so to dp, and thé note remained unpaid and outstanding against the defendant in error.
    In Bank.
    Dec. Term, 1846
    Then-follow the ;cpmmon money counts. Two pleas were .pleaded'by the plaintiff in error; 1. Non-assumpsit; .2. A special plea in bar, of discharge in bankruptcy and Certificate thereof, granted December 5 th; .1842, on,a petition filed-July'. 18th, 1842, &c.
    The defendant in error replied,'that the debt -and -' cause- of action, arose,, and was contracted; in a fiduciary capacity, and that the plaintiff in error had applied.said money to his own use, and not .in the payment or discharge of the note. -. The plaintiff rejpined,' and put in. issue the facts averred’ in the .replication'.' ■ ’
    • On these issues, the causé was submitted to the Court without the intervention of a'jury, and judgment given for,the defendant in error; and to the finding of the Court the plaintiff in,error excepted. . ..
    It appears from the record, that, on the trial, the defendant in error, to maintain the issue on his part, gave in evidence the rióte described, arid that the plaintiff in error was one of the firm of Bissell and Gardner,* -who signed the note as sureties for the defendant in error, the other'maker thereof; and that to indemnify Bissell and Gardner, as such sureties, on the 20th day of June, 1839, the defendant in error, as principal, with one' Peter Navarre as his surety, executed and delivered to said Bissell and Gardner their promissory note, for the sum of one hundred and three dollars and fifty cents, payable on demand. The defendant in error also proved, that he paid $100- qn the last' mentioned note to said Bissell and Gardner, with the understanding, that they were to apply it on the note to Knapp; The small balance due on the note, to indemnify Bissell and Gardner, was, afterwards; paid to Gardner, after the dissolution of the firm, but was receipted for by him in the name of the partnership. It was likewise proved, that Bissell and Gardner to have paid the $ 100 so received to Iinapp, on tiro note first mentioned, but the firm soon after becoming embarrassed, failed, and said note remained unpaid. The payment to Bissell and Gardner was proved to have been made before the discharge of Bissell, the plaintiff in error, in bankruptcy, and the counsel for him therefore submitted a motion for a non-suit. This motion was resisted by the counsel for the defendant in error, on the ground that the debt, for which the action was brought, was contracted in a fiduciary capacity. The Court of Common Pleas so held — overruled the motion, and gave judgment for the defendant in error.
    
      Lam, Hill fy Bennet, for Plaintiff in error.
    Is the finding of the Court, as to the issue on the plea of discharge in bankruptcy, (which finding appears only in the bill of exceptions,) sustained by the evidence ? Did Bissell become indebted in a fiduciary capacity? We maintain that he did not. The evidence shows, that the $100 was paid to Bissell and Gardner in part payment of the note given to them by Couchaine and Navarre. This $100 is all that oven constructively came to the hands of Bissell; the balance having been paid to Gardner, after the firm of Bissell and Gardner was dissolved.
    It does not appear that Bissell and Gardner were to pay over the money within a specified time, or that they were to pay over the identical money received from Couchaine on his note; but they were to “ apply that amount ” on the note which they had signed as his sureties. The $100, undoubtedly, wont into the cash drawer of Bissell and Gardner — was mixed up and used with their own funds; and, before the balance was paid by Couchaine, the firm of Bissell and Gardner had become embarrassed, and failed, “ having no means or effects with which to take up said first mentioned note.” Whatever remained, then, of the estate of said firm, acquired in whole or in part by means of this $ 100, passed to, and vested in the assignee in bankruptcy, by operation of law. U. S. Bankrupt Law, sec. 3, passed Aug. 19th, 1841.
    Such would be the case with money in the hands of a bankrupt executor or administrator, if it could not be “ specifically ‘ distinguished and ascertained to belong to a testator-or intestate, and not to the bankrupt.” 3 Burr, 1369; Owen on Bankruptcy, 125, 126.
    
      A ud where a bankrupt, who is factor for another, has sold the property of his principal, and received the price, before any notice to the vendee not to pay him, the principal has no other remedy but to prove for the amount upon the estate, unless the price remain in the hands of the factor, specifically distinguishable from the factor’s own property. Owen .on Bankruptcy, 126.
    It was for the defendant in error to show that this money, or some part of it, did remain in the hands of the plaintiff in error, ' specifically distinguishable from the plaintiff’s own property, and, not having shown it, the certificate and discharge in bankruptcy should have been held a bar.
    The principle which we are contending for, is again declared in Waller v. Edwards, 6 Little’s (Ky.) Reports, 384; where it is held, that a certificate and discharge in bankruptcy is no bar to the recovery of specific property held by the bankrupt as executor,. Aliter, as to a recovery by distributees of money received by him in his fiduciary capacity, and for which he was liable before bankruptcy.
    But we suppose it will be contended on the other side, that Bissell had assumed a trust in favor of the owner of the first mentioned note; and although the trust was purely voluntary, and without any consideration, yet, as the beneficiary is not shown to have become a party to it, it was revocable, and being revoked, an implied trust results in favor of the party who originally created it, and that the nonpayment of the money establishes the fact of indebtedness in a fiduciary capacity.
    
      Before this position can' be made available to the defendant jn error some proof would seem to be required that the trust . ■ . ■ ' was revoked before suit was brought;-but there is no proof-whatever oh that subject.- .-
    'Again, — the construction of that clause in the bankrupt law, winch is involved in this suit, has, been authofitively settled by the Supreme-Court of the United States,-in the case of Chapman v. Forsyth et al., 3 Howard’s Rep.- 202, showing that the indebtedness'proven in this casé, is not a fiduciary debt within the meaning of the act. : 'We extract so much of the opinion of the.Coürt as bears directly on the'point under consideration: ■
    “.The second .point is, whether a factor, who retains the c money of his principal, is a fiduciary debtor within the mean- ‘ ing'of the act? .
    “If the act embraced such a-debt, it will be difficult to limit ‘ its application.- -.It must include all debts arising from agen- ‘ cies; and, indeed, all cases where the' law implies- an obliga- , ‘ tion from the trust' reposed in the’debtor. -Such, a construc- £ tion would have left but few debts on which the, law could. £ operate. In almost-dll' the commercial transactions of’th'e £ country, confidence is reposed in the punctuality and integrity £ -of the debtor, and a violation of these is, in á commercial ‘ sense; a!disregard of á trust. But this is not the relation ‘ spoken of in-the-first section, pf the act-.
    . “ The cases enumerated — ‘-the defalcation of a public offi‘•cer,’ -f executor,’. ‘ administrator,i ‘ guardian,’ of ‘ trustee’— are ‘ not cases of implied, but.special trusts;, and the ‘other'fidu- ■ ‘ -ciai;y capacity,’ mentioned, must mean the same class of trusts. ‘ Thé act. speaks of technical trusts. ■ A factor is not, therefore, ‘ within the act.. . • -. 1
    “This view is strengthened, and indeed made conclusive,' ‘ by thé provisions of the fourth section, which declares that no ■ ‘..‘merchant,' banker, factor, broker, undér-writer,-:ór marine- ‘ insurer,’ shall be entitled' ,to.a discharge ‘ who- has ;not kept - ‘ proper books of accounts.’ In answer to the second question, ‘ then, we say, - that a factor, who- owes his principal money,'. ■£ received on the sale of his goods; is not a fiduciary debtof £ within the meaning- of the act.” . - y',
    Upon the strength of these authorities, we feel warranted in spying, that. the case at bar does not'.present, a fiduciary debt .within the meaning -of the' act of Congress, as found by the. Commpn Pleas, and that its judgment' ought to be reversed. ■
    
      F. Johnson, for. Defendant-in error.-
   Wood, C. J.'•

It is insisted by -the counsel for -the defendr ant in error, that, as' this case •' was' submitted . to .the Coúrt instead of a jury to determine.the issues of .factj if the judgment is' reversed it must' be because thé- Court of .Common ■Pleas gave too much or too lit-llie credit to. the testimony introduced, and, in the opinion of this 'Court, did, not give the evidence its' proper and .legitimate .influence, pr weight, .in' its application to the facts of.-.the. cáse. If it be sought’to disturb this judgment bn this ground, the-position assumed cannot for a moment be entertained. The reason why, not, is given in several reported cases, and. need not, in this, be again' repeated from the bench. Utter v. Walker's Adm'r, Wright’s Rep. 46 ; Price v. Orange, Ibid. 568; Reynolds v. Rogers, 5 Ohio Rep. 169; Bank of Cincinnati, v. Buckingham, 12 Ohio Rep. 482.

The record, however, shows no such case as belongs propeily to that class of case's, in .which the.principle alluded to has been maintained. The record presents all the testimony adduced upon the'trial. ■ There does not appear to. have been any disagreement with Court pr counsel ps to the proof;, and,..from the facts adduced, the Court held,.thát the money received by. the plaintiff in error, in-truth, in discharge of- his own note of indemnity, and which he. -agreed .to apply on the note of the defendant in error to Knapp, was received'in a--fiduciary capacity, and' therefore not- embraced- within the terms, and -could not be-.discharged under, the bankrupt law. Not for the erro-' neous finding of á fact, but-for. deducing the' legál result from the fact, that the debt was created in a fiduciary capacity, the error is assigned, and this Court is called upon to revise the judgment of the Court below. What is a fiduciary capacity, is a question of law; and if the Common Pleas erred in applying the law to the facts, the judgment is erroneous. It is, perhaps, only necessary to refer to the case of Chapman v. Forsyth et al., 2 Howard’s Rep. 202. The Supreme Court of the U. States holds this language:

The second point is, whether a factor, who retains the ‘ money of his principal, is a fiduciary debtor within the mean- ‘ ing of the act ?
££ If the act embraced such a debt, it will be difficult to limit its application. It must include all debts arising from agen- £ cies; and, indeed, all cases where the law implies an obliga- tion from the trust reposed in the debtor. Such a construction £ would have left but few debts on which the law could operate. ‘ In almost all the commercial transactions of the country, con- * fidence is reposed in the punctuality and integrity of the £ debtor, and a violation of these is, in a commercial sense, a £ disregard of a trust. But this is not the relation spoken of in £ the first section of the act.
££ The cases enumerated —£ the defalcation of a public offi- cer,’ executor,’ £ administrator,’ £ guardian,’ or £ trustee ’— £ are not cases of implied, but special trusts; and the £ other £ fiduciary capacity,’ mentioned, must mean the same class of £ trusts. The act speaks of technical trusts. A factor is not, £ therefore, within the act.
££ This view is strengthened, and indeed made conclusive, £ by the provisions of the 4th section, which declares that no £ £ merchant, banker, factor, broker, under-writer, of marine insurer,’ shall be entitled to a discharge £ who has not kept proper books of accounts.’ In answer to the second question, then, we say, that a factor, who owes his principal money, £ received on the sale of his goods, is not a fiduciary debtor within the meaning of the act.”

If a factor is not within the act, when .he. refuses to pay to the principal the money in his hands for the sale of goods, why is the plaintiff ,in error, who received $ 100 on his own note of indemnity, but which he promised to pay in discharge of the obligation for which his was taken ? It was a debt created ; but not a special, technical, or express trust. If a trust, legally speaking, was created, a bill in equity, to compel an account and a decree for its execution, would be an appropriate remedy; but we think the most careless and unskillful solicitor would hardly dream of that form of remedy in the case at bar.

Judgment Reversed,.  