Bunel v. Nester

• Decision Date: 11 April 1907
• Citation: 101 S.W. 69,203 Mo. 429
• Parties: HENRY NAPOLEON BUNEL and F. S. HEFFERNAN, Appellants, v. NESTER et al
• Court: Missouri Supreme Court

101 S.W. 69

203 Mo. 429

HENRY NAPOLEON BUNEL and F. S. HEFFERNAN, Appellants, v. NESTER et al

Supreme Court of Missouri, First Division

April 11, 1907

Appeal from Greene Circuit Court. -- Hon. James T. Neville, Judge.

Affirmed.

Barclay Shields & Fauntleroy and F. S. Heffernan for appellants.

(1) Under the evidence the guardian and curator, and his heirs receiving the property from him, are undoubtedly liable in equity to his ward A constructive trust or a resulting trust is immediately created by the conversion of the guardian, and he and his heirs hold the property as trustees for the true owner. Huttman v. Viesselman, 48 Mo.App. 582; Douschroeder v. Thias, 51 Mo. 100; Kelley v Johnson, 28 Mo. 249; Miller v. Davis, 50 Mo 572; Plumb v. Cooper, 121 Mo. 668; Boyd v. Mammoth Spring Co., 137 Mo. 482; Paul v. Chouteau, 14 Mo. 580; Shaw v. Shaw, 86 Mo. 594; In re Ferguson Estate, 124 Mo. 574. (2) Under the circumstances there was a constructive trust created by the facts in equity, by which John O'Day was bound to account, for the property in his hands, to plaintiff. The property used by O'Day was originally the property of Henry N. Bunel. It was decreed out of him by a fraudulent decree of the New York Court. When that decree was set aside by the United States Circuit Court on the ground that it was fraudulently obtained and admitted by many to be so obtained by fraud, eo instanti, H. N. Bunel's rights to the fund in O'Day's hands were restored and O'Day held the fund for him as an equitable trust, and when he converted the property sued for, to his own use, he became liable to account to the real owner. Patterson v. Booth, 103 Mo. 402; Green Tree Brewing Co. v. Dold, 45 Mo.App. 603; Gamble v. Gibson, 59 Mo. 585; Monroe v. Collins, 95 Mo. 33; 1 Perry on Trusts (3 Ed.), sec. 27; Bircher v. St. Louis Metal Co., 77 Mo.App. 500; State ex rel. v. Elliott, 157 Mo. 609; Burford v. Aldridge, 165 Mo. 419; Bircher v. Walther, 163 Mo. 461; Pearson v. Haydell, 90 Mo.App. 253; Clark v. Bank, 57 Mo.App. 277; Harrison v. Murphy, 106 Mo.App. 465; Heil v. Heil, 184 Mo. 665; Garrett v. Garrett, 171 Mo. 155; Lincoln Trust Co. v. Wolff, 91 Mo.App. 133; State ex rel. v. Berger, 92 Mo.App. 631; Crawford v. Jones, 163 Mo. 577; Farrell v. Farrell, 91 Mo.App. 665; Mayer v. Bank, 86 Mo.App. 422; Meystedt v. Madden, 86 Mo.App. 178; Davis v. Hoffman, 167 Mo. 573; Keet v. Gideon, 80 Mo.App. 609; Nuggles v. Callison, 143 Mo. 527. (3) (a) The fact that John O'Day received said property as guardian of Mary Earles Kee, she having been fraudulently adjudged to be an heir of Charles E. Bunel, did not justify said O'Day in robbing the estate of his said ward, by converting it to his own use, and when said fraudulent adjudication was admitted by his ward, and decreed to be fraudulent by the United States Circuit Court, the equitable title to all the property and its income and profits in the hands of John O'Day as such guardian, was held by him for the benefit of Henry Napoleon Bunel, and he was bound to account to Bunel for any property belonging to said funds converted by him to his own use. Patterson v. Booth, 103 Mo. 402; Gamble v. Gibson, 59 Mo. 585; Evangelical Synod of N. A. v. Schoenich, 43 Mo. 652; McGuire v. Nugent, 103 Mo. 161; Thorpe v. McPike, 62 Mo. 300; Norton v. Irwin, 43 Mo. 153; Bispham's Principles of Equity, p. 92; Perry on Trusts (2 Ed.), sec. 429; Hill on Trusts (3 Ed.), 160; Baldwin v. Dalton, 168 Mo. 20; Phillips v. Overfield, 100 Mo. 466; Monroe v. Collins, 95 Mo. 33. (b) The fraudulent conversions by O'Day being shown, the true owner can follow the fund into the property held by his heirs. Patterson v. Booth, 103 Mo. 402; Roach v. Coraffa, 85 Col. 436; Bremell v. Adams, 146 Mo. 70. (4) (a) The conveyance by Mary Earles Kee to Henry N. Bunel of all her right, title and interest in and to all the money, property or effects due her from the estate of John O'Day, deceased, her former guardian and curator, being money and property that the said John O'Day had received as her guardian and curator, and all the interests and profits arising therefrom to said Henry Napoleon Bunel, giving the said Henry Napoleon Bunel the same right to sue for the same that she had, and also all the money, notes, bonds and evidence of the debt due and held in trust for her by the New York Life Insurance and Trust Company of New York City in the State of New York, was not a mere assignment of the naked right to sue for fraud, but was based on valuable considerations. (b) The settlement was of disputed and litigated claims between them which is always a good consideration. (c) The deed was a restoration to the rightful owner, as far as in her power lay, of the property in O'Day's hands which had been fraudulently adjudged to Mary Earles by the New York court as the result of a fraudulent conspiracy. This is of itself a good consideration and canot be held to be the assignment of a mere naked right to sue for fraudulent conversion. Smith v. Wade, 43 Mo. 557; Jones v. Babcock, 15 Mo.App. 149; Lionberger v. Baker, 14 Mo.App. 353; Page v. Gardner, 20 Mo. 507; Johnson Co. v. Bryson, 27 Mo.App. 341; Conn. Mut. Life Co. v. Smith, 117 Mo. 261; Goodger v. Finn, 10 Mo.App. 226; Dickson v. Merchants Elevator Co., 44 Mo.App. 498; Smith v. Harris, 43 Mo. 557; Wilson v. Railroad, 120 Mo. 45; O'Day v. Meadows & O'Day, 194 Mo. 617. (5) Where a trustee mixes trust money with his own so that it cannot be distinguished what particular part is trust money and what part is private money, equity will follow the trust money by taking out what is due the cestui que trust. Harrison v. Smith, 83 Mo. 210; Staller v. Coats, 88 Mo. 514; Evangelical Syn. of N. A. v. Schoeneich, 143 Mo. 652; Pundman v. Schoeneich, 144 Mo. 149; Tierman's Ex. v. Security B. & L. Assn., 152 Mo. 135; Flint Roar Cart Co. v. Stephens, 32 Mo.App. 341; Bircher v. Walther, 163 Mo. 461; Leonard v. Latimer, 67 Mo.App. 138; Bircher v. Sheet Metal Co., 77 Mo. 509; Bank v. Brightwood, 148 Mo. 367; Snoregrass v. Moore, 30 Mo.App. 232; Clark v. Bank, 57 Mo.App. 281; Bank v. Sanford, 62 Mo.App. 394; Brick Co. v. Schoeneich, 65 Mo.App. 283; Leonard v. Latimer, 67 Mo.App. 138; Peck v. Elliott, 30 Kan. 156; Thompson v. Bank, 8 A. 97; Plow Co. v. Lamp, 45 N.W. 104; Phelps v. Overfield, 100 Mo. 466; Meystedt v. Grace, 86 Mo.App. 178; 144 Mo. 149; 143 Mo. 664; 83 Mo. 210. (6) Any omission or concealment that wrongs the estate must be considered fraudulent without any reference to the motive that dictates it. Clyce v. Anderson, Ex'r, 49 Mo. 37; Smiley v. Smiley, 80 Mo. 44; Byerly v. Donlin, 73 Mo. 270; West v. Revis, 13 Ind. 294; Hook v. Payne, 14 Wall. (U. S.) 252. (7) The trust will attach to the property which is the product and substitute for the original thing, as it can be traced. Phillips v. Overfield, 100 Mo. 466; Patterson v. Booth, 103 Mo. 402; Parker v. Straat, 39 Mo.App. 616; Butler v. Lawson, 72 Mo. 227; Brief, 117 Mo. 284; Oliver v. Piatt, 3 How. (U. S.) 333; Bispham's Equity Jurisprudence (4 Ed.), sec. 86; 1 Perry on Trusts (2 Ed.), pp. 515, 518; 2 Pomeroy on Equity Jurisprudence (1 Ed.), p. 626.

Delaney & Delaney with E. W. Banister for respondents.

(1) The bill does not state facts sufficient to entitle complainants to the equitable relief prayed for or to any equitable relief whatever. (2) It will be seen from the allegations of the bill that complainants seek to recover on the theory that John O'Day used the money of his ward, Mary, in paying for the land and that he purchased the property in fact for her, but took the title in his own name. To establish a trust on the theory that the money actually used in buying the property in question was trust money, the evidence, to warrant a decree, must be so clear, definite and positive as to leave no reasonable ground for doubt. Johnson v Quarles, 46 Mo. 423; Forrester v. Scoville, 51 Mo. 268; Jackson v. Wood, 88 Mo. 76; Philpot v. Penn, 91 Mo. 38; Rodgers v. Rodgers, 87 Mo. 257; Shaw v. Shaw, 86 Mo. 594; Kennedy v. Kennedy, 57 Mo. 73; Philips v. Overfield, 100 Mo. 466; Adams v. Burns, 96 Mo. 361; Burdett v. May, 100 Mo. 13; King v. Isley, 116 Mo. 155; Dailey v. Dailey, 125 Mo. 96; Buck v. Ashbrook, 59 Mo. 200; Ferris v. Van Vechten, 73 N.Y. 13; Oliver v. Platt, 3 How. 333; Story's Eq. Jur., secs. 1258; Shepherd v. McEvers, 4 Johns. Ch. 136; Dodge v. Manning, 1 N.Y. 298. "The principle to be deduced" is "that where the trust fund has consisted of money and been mingled with other moneys of the trustee in one mass, undivided and undistinguishable, and the trustee has made investments generally from moneys in his possession, the cestui que trust cannot claim a specific lien upon the property or funds constituting the investments." Hill on Trustees, 522; Moses v. Margatroget, 1 Johns. Ch. 119; Kip v. Bank, 10 Johns. 63; 2 Kent's Com., 623, 624; Trevothick v. Austin, 4 Mason 29; Falkland v. Nat. Bk., 84 N.Y. 145; 2 Pom., Eq. Jur., 623n; Atty.-Gen. v. Ins. Co., 82 N.Y. 193; Cavin v. Gleason, 105 N.Y. 263; Ward v. Higgins, 9 N.Y. 645. (3) When plaintiffs are contending that a resulting trust arose because O'Day used the purchase money of his ward in payment of the real estate purchased, surely this court will not declare a constructive trust and render judgment that O'Day had no right at all to buy. Capen v. Garrison, 193 Mo. 335; Woods v. Boots, 60 Mo. 546; Wendleton v. O'Brien, 68 Mo.App. 675. (4) The right of a cestui que trust to set aside a sale for fraud practiced by the trustee, or to have one declared a trustee who purchases property with trust funds, is not assignable. There is nothing in plaintiff's bill or in the evidence in this case which exempts the transaction between Mary and Henry from the operation of this well-established rule. Jones v. Babcock, 15 Mo.App. 149; McMahon v....