Clingman v. W.

• Decision Date: 09 June 1923
• Docket Number: 24,508
• Citation: 215 P. 1013,113 Kan. 632
• Parties: ORD CLINGMAN, as Guardian, etc., Appellee, v. W. V. HILL et al. Appellants
• Court: Kansas Supreme Court

215 P. 1013

113 Kan. 632

ORD CLINGMAN, as Guardian, etc., Appellee, v. W. V. HILL et al. Appellants

No. 24,508

Supreme Court of Kansas

June 9, 1923

Decided January, 1923.

Appeal from Sumner district court; OLIVER P. FULLER, judge.

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

TRUST FUNDS--Wrongfully Converted by Trustee--May be Followed into Hands of Third Party. Property purchased by a trustee with trust funds wrongfully converted to his own use may be followed into the hands of one who acquired it without notice of the wrong, but who gave nothing for it beyond the discharge of a preexisting debt.

George K. Melvin, and R. E. Melvin, both of Lawrence, for the appellants.

John Q A. Norton, Walter G. Theile, both of Lawrence, and L. H. Finney, of Wellington, for the appellee.

OPINION

MASON, J.:

Ord Clingman, as guardian of Amanuel Hill, an insane person, brought this action against W. V. Hill and Brittomart Hill, his wife, seeking to impress a trust in favor of the plaintiff as such guardian upon a quarter section of land standing in the name of Mrs. Hill. The case was called for trial and after preliminary statements had been made by the attorneys the plaintiff moved for a judgment in his favor upon such statements, the pleadings, and copies of records admitted to show correctly certain probate court proceedings. The motion was granted, judgment was rendered, and the defendants appeal.

On a previous appeal the petition was held to state a cause of action. (Clingman v. Hill, 104 Kan. 145, 178 P. 243.) It contains allegations to this effect: W. V. Hill was formerly guardian of Amanuel Hill, his brother. He wrongfully used $ 4,000 belonging to the estate in the purchase of a drug store in the equipment of which he later used $ 1,000 from the same source. About September 1, 1916, he traded the drug store for the quarter section of land, taking the title to the latter in the name of his wife, who accepted it with knowledge of these facts and without paying any consideration, and with a purpose to defraud the estate. On March 13, 1917, W. V. Hill was removed as guardian, being found to have disposed of $ 6,065.57 of his brother's money, and was ordered by the probate court to turn over that sum to his successor, the plaintiff. The preliminary statement of the defendants' attorney in effect admitted all the material allegations of the petition excepting those relating to Mrs. Hill's knowledge of her husband's wrongdoing, to her purpose to defraud, and to the precise terms on which the farm was procured. The case turns upon the question whether the farm in the hands of Mrs. Hill is beyond the plaintiff's reach upon the theory that she is an innocent purchaser for value. The plaintiff contends that the judgment can be upheld upon these three grounds: (1) Mrs. Hill had constructive knowledge through her attorney of the store having been purchased with the money of Amanuel Hill; (2) she had actual knowledge of it from having heard her husband admit it as a witness in the probate court; (3) she was not a purchaser for value in the sense here involved, because she gave nothing for the farm beyond releasing her husband from an existing debt he owed her.

The attorney who represented W. V. Hill in the probate court during his guardianship testified that in the spring of 1916 Hill and his wife came to his office and "at their suggestion and dictation" he "drew for them, or for him," a note for $ 5,000 which Hill owed his wife, with a mortgage on the drug store securing it. The plaintiff argues that the attorney necessarily knew of the misuse of funds from his representing Hill in various matters relating to the guardianship, especially in view of a hearing on ...