Debtor's breach of his obligations as escrow agent was defalcation while acting in fiduciary capacity.

A Chapter 7 debtor-attorney's conduct, in his capacity as escrow agent for both the vendor and purchaser on a sale in which he had represented the vendor, in applying the purchaser's escrowed deposit to attorney fees owed by the vendor without the purchaser's consent, was in the nature of a "defalcation" that the attorney committed while acting in a fiduciary capacity and served to preclude discharge of the resulting debt. A bankruptcy judge in Massachusetts rejected the debtor's argument that the purchaser had breached the sales agreement and lost any right to the escrowed funds.