Holden v. Piper

• Decision Date: 11 June 1894
• Citation: 5 Colo.App. 71,37 P. 34
• Parties: HOLDEN v. PIPER.
• Court: Colorado Court of Appeals

37 P. 34

5 Colo.App. 71

HOLDEN v. PIPER.

Court of Appeals of Colorado

June 11, 1894

Error to district court, Pueblo county.

In the matter of the petition of D.L. Holden, administrator d.b.n of the estate of John T. Sullivan, deceased, against C.J Piper, assignee of the estate of Frederick Rohrer. Judgment for petitioner for amount in hands of assignee. Error and cross error assigned. Reversed.

Betts &amp Vates and B.F. McDaniel, for plaintiff in error.

D McCaskill, for defendant in error.

BISSELL P.J.

For some years, Frederick Rohrer was doing business in the city of Pueblo as a banker, under the name of the Bank of Pueblo. In 1890 he was appointed administrator of the estate of John T. Sullivan, and as such representative collected about $4,600. Of this sum, he disbursed, in the course of his administration, a little upwards of $1,200, leaving $3,364.58 unaccounted for. On the last day of May, 1892, he made a statutory general assignment for the benefit of his creditors; and at the date of the present litigation the defendant in error, Piper, was the assignee of the estate. Rohrer turned over $551.80 to the assignee. There was probably other property belonging to the assignor which passed by the transfer, but to what extent, and of what it consisted, the record is silent. In the September following, Holden, the present plaintiff in error, filed a petition in the matter, and prayed a decree that the assignee be directed to pay him the unpaid balance of $3,364.58, and that Sullivan's estate be given a preference over all the other of Rohrer's creditors. When the petition was filed the assignee took issue, and the case was heard upon an agreed statement of facts. This proof established the facts above stated, and further that, during a period of about two years subsequent to the date of his appointment, Rohrer had, from time to time, received the moneys which went to make up the total sum belonging to the Sullivan estate. The petition is silent as to the exact dates of the payments, and simply recites that within a period named all the money had been received. This period antedates the assignment by some two or more weeks. Rohrer used the money which he received in his general business, mingled it indiscriminately with his other funds, and treated it as personal assets in the transaction of his business and in the payment of his debts. Aside from this general statement, there is no showing as to the time when the last money was collected, nor whether any of it went into other property which passed to the assignee.

On this state of facts the petitioner claimed that the fund which Rohrer had appropriated was a trust fund, and whatever property he transferred to the assignee was impressed with a lien in favor of the estate, which the present administrator had a right to assert against Rohrer's general creditors. Measurably accepting this claim as well founded, the court decreed that the cash on hand at the time of the assignment should be paid to the administrator, and dismissed the petition as to the residue. The judgment entered cannot stand. The assignee assigns cross error as to the judgment for $551.80, and his error is well laid. The administrator is entitled to no decree giving him a preference over Rohrer's general creditors. There has been considerable conflict of opinion among the courts as to the limitations which restrict the doctrine that trust funds may be followed into the hands of third parties, and either the funds themselves, or the property into which they have gone, be subjected to a liability resulting from their original trust character. The supreme court, in Bank v Hummel, 14 Colo. 259, 23 P. 986, accepted the rule of the more modern cases,--that funds might be pursued, and impressed with their trust character, even though the trust property itself consisted of money, which was without the earmarks formerly held essential to the application of the doctrine. This case undoubtedly went to the uttermost limit in the assertion of the rule that, so long as trust property could be traced and followed, it should remain subject to the trust, and wherever trust funds were mingled with another's assets the whole would be treated as trust property, except in so far as the...