In Re Kelley

MEMORANDUM OF DECISION

This is an appeal from the Order of the Referee in Bankruptcy wherein the debt of the Bankrupt to respondents was held to be a willful and malicious injury to the property of another within the meaning of the Bankruptcy Act, Sec. 17a (2), 30 Stat. 550 (1898), 11 U.S.C. § 35a (2) (1964) and thus not discharge-able.

The findings of fact by the Referee and the evidence in the record disclose that the following transactions took place with regard to the debt in question. On September 1, 1960, and all times important herein, the bankrupt was President of Century Enterprises, Inc., (hereinafter referred to as “Century”), a California corporation, and that one Earl J. Messier was Vice-President of said corporation. The bankrupt and Messier were the sole owners and managers of Century. On the above date the bankrupt and Messier, acting on behalf of Century, entered into an agreement with respondents which provided that funds deposited by respondents with Century would be “maintained in a Trust Account at a bank,” that funds in said trust account would not be withdrawn except upon the simultaneous assignment to the respondents of valid promissory notes secured by…