Acalus L. Palmer, Respondent v. Erwin A. Hussey, Appellant

Summary

The New York Court of Appeals reversed the lower courts and granted the debtor’s motion for a perpetual injunction against enforcement of a judgment, holding that the judgment was not conclusive on the fiduciary‑capacity and fraud issues required to bar discharge under the Bankruptcy Act. The court explained that the fiduciary relationship alleged was merely an agency trust and that the alleged fraud was only implied, not the active fraud excluded by the statute. Consequently, the debt was dischargeable and the delay in obtaining the discharge was excused.