Little v. Chadwick

• Decision Date: 26 February 1890
• Citation: 151 Mass. 109,23 N.E. 1005
• Parties: LITTLE et al. v. CHADWICK et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

151 Mass. 109

23 N.E. 1005

LITTLE et al. v. CHADWICK et al.

Supreme Judicial Court of Massachusetts, Suffolk.

February 26, 1890

COUNSEL

George

E. Smith, for defendants.

Horace G. Allen and Wm. R. Howland, for Roxbury Institution for Savings.

OPINION

C ALLEN, J.

The executor and trustee under the will of Mrs. Williams, having assigned his property in trust for the benefit of his creditors, the annuitants under that will seek to establish a trust in that property, and to obtain a decree that $10,000 be set apart by the assignees, and appropriated to secure and raise the annuities. It was, however found at the hearing that none of the property so conveyed was charged with any such trust, and this finding appears to be the only one that the evidence would warrant. There is nothing to show that there was ever any distinct trust fund in the hands of Williams, the executor and trustee, which was represented by any specific property. He was also the residuary legatee, and nearly one-half of the assets of the estate consisted of a debt due from himself. The rest was chiefly notes secured by mortgages. There was no real estate. The moneys received by Williams from the estate were mixed with his own. He paid the debts and other legacies, and rendered an account, called "final," in which he charged himself with "balance of this account retained to pay annuity of $600 per annum to Charles Bugbee $10,000." It was his duty to set apart this sum, and to keep it separately invested, but he did not do so. The settlement of the account merely showed that he was held responsible for that sum; and, if he had set it apart, as he ought to have done, the trust would have attached to the property thus set apart. But, since this was never done, the trust was never impressed upon any specific property or money held by Williams. There was merely an indebtedness or liability on his part to account for that sum. This indebtedness or liability might itself be the subject of a trust, just as if it has been the indebtedness of another person. The trust, however, in such case, attaches merely to the indebtedness, and to whatever may be realized from it and not to any particular property held by the debtor. The view most favorable to the annuitants that could be taken is that Williams had the sum of $10,000 in money in his hands which was retained for the purpose of raising the annuities. The evidence shows that this was not the case. But assume that it was, the trust would then attach to it as long as the money could be identified or traced, but no longer. When trust money becomes so mixed up with the trustee's individual funds that it is impossible to trace and identify it as entering into some specific property, the trust ceases. The court will go as far as it can in thus tracing and following trust money; but when, as a matter of fact, it cannot be traced, the equitable right of the cestui que trust to follow it fails. Under such circumstances, if the trustee has become bankrupt, the court cannot say that the trust money is to be found somewhere in the general estate of the trustee that still remains. He may have lost it with property of his own. And in such case the cestui que trust can only come in and share with the general creditors. The Attorney General v. Brigham, 142 Mass. 248, 7 N.E. 851; Howard v. Fay, 138 Mass. 104; White v. Chapin, 134 Mass. 230; Bresnihan...