Mass. Bonding & Ins. Co. v. Josselyn

• Decision Date: 19 July 1923
• Docket Number: No. 8.,8.
• Citation: 194 N.W. 548,224 Mich. 159
• Court: Michigan Supreme Court
• Parties: MASSACHUSETTS BONDING & INS. CO. v. JOSSELYN et al.

224 Mich. 159

194 N.W. 548

MASSACHUSETTS BONDING & INS. CO.

v.JOSSELYN et al.

No. 8.

Supreme Court of Michigan.

July 19, 1923.

Appeal from Circuit Court, Wayne County, in Chancery; Orien S. Cross, Judge.

Suit by the Massachusetts Bonding & Insurance Company against Rose Reeber Josselyn and another. Decree for plaintiff, and defendants appeal. Affirmed.

Argued before WIEST, C. J., and FELLOWS, McDONALD, CLARK, BIRD, SHARPE, MOORE, and STEERE, JJ.James O. Murfin, of Detroit, for appellants.

Monaghan, Crowley, Reilley & Kellogg, of Detroit, for appellee.

SHARPE, J.

Albert J. Reeber, an attorney of Detroit, the former husband of defendant Rose Reeber Josselyn, was appointed administrator of the estate of Albert Zeitz on August 30, 1916, and gave the usual bond, in which the plaintiff was surety, in the sum of $6,000. On December 21st of the same year he was appointed administrator with the will annexed of the estate of John A. Moeller, and gave a similar bond, in which plaintiff was also a surety, in the sum of $50,000. He administered these estates until his death on October 11, 1917. The Detroit Trust Company was appointed administrator of his estate. It presented final accounts in both estates, which were duly allowed, showing an indebtedness by him to the Zeitz estate in the sum of $5,147.91, and to the Moeller estate in the sum of $26,000. These sums the plaintiff company paid to the duly appointed administrators of said estates, and assignments of their respective claims against the estate of Reeber and such other persons as might be in possession of trust funds or property were duly made to plaintiff.

At the time of his first appointment Reeber had a checking account in the Central Savings Bank at Detroit, showing a balance of $33.69. He deposited substantially all of the moneys received by him belonging to these estates in such account, thus commingling the funds belonging to the two estates with his personal funds. At the time of his death, there was a balance of $742.19 to his credit in the bank. During this period Reeber had made deposits of large sums received by him from other sources, the amount of which seems to be somewhat in dispute.

Previous to his appointment as administrator of either estate Reeber had caused his life to be insured by three policies issued by the John Hancock Life Insurance Company, each in the sum of $5,000, payable in the event of his death to his wife. The last premium on one of these policies, amounting to $138.60, the last two premiums on another, amounting to $320.20, and the last premium on the third policy, amounting to $139.10, were paid by him in 1916 and 1917, after the commingling of such funds, by check on the bank in which they were deposited. After such appointments he caused his life to be insured by policies payable to his wife in the sum of $60,000. The premiums on all of these policies were paid by checks drawn on the bank in which the estate moneys were deposited. After his death the defendant Rose Reeber Josselyn received as beneficiary under the policies first referred to $15,026.03, and under the latter $47,054.50.

It is plaintiff's claim that each and every of the premiums paid on these policies after Reeber's appointment as administrator was paid at a time when he had no money other than that belonging to these estates in the bank, and that consequently they were paid out of the funds of the estates. Plaintiff, in this proceeding, seeks to impress upon the properties in which the defendant, Rose Reeber Josselyn, has invested these insurance moneys, one parcel of which is in the name of her present husband, Henry E. Josselyn, the other defendant, and herself, and on the moneys not invested but deposited by her in certain banks, the trust arising from the use of the moneys of the estates in paying the premiums on such policies to the extent to which the beneficiary in the several policies benefited by such payments.

It appears clearly from Reeber's bank account that the balances on deposit at the time the several checks for premiums were paid were less than the amount of the moneys of the estates which had been theretofore deposited and not withdrawn. It will serve no useful purpose to insert in this opinion a copy of the entries in the books of the bank or the summary compiled by an accountant and appearing in the record establishing this fact.

The trial court determined that the sums received on policies issued prior to Reeber's appointment as administrator should be prorated ‘in the proportion that the trust funds and private funds invested therein bore to each other,’ and concluded that of the total insurance moneys received, $62,183.53, $54,471.80 thereof ‘belonged to and was the property of the two said estates, and, by virtue of the assignment hereinbefore mentioned, became and was the property of the said plaintiff herein.’

It is an elementary rule that a trustee may make no profit out of the handling of a trust estate. It is also well settled that, where money held upon trust is misapplied by the trustee, and traced into an...