Mills v. Post

• Decision Date: 28 October 1879
• Citation: 7 Mo.App. 519
• Parties: LUCIUS F. MILLS, Plaintiff in Error, v. HENRY M. POST, ADMINISTRATOR, Defendant in Error.
• Court: Missouri Court of Appeals

7 Mo.App. 519

LUCIUS F. MILLS, Plaintiff in Error,

v.HENRY M. POST, ADMINISTRATOR, Defendant in Error.

St. Louis Court of Appeals, Missouri.

Oct. 28, 1879.

Where a trust fund has been by the trustee converted to his own use, if it can no longer be identified as a separate and independent fund of value, the right to follow the specific fund into the hands of the trustee's administrator is gone.

ERROR to St. Louis Circuit Court.

Affirmed.

JOHN P. ELLIS, for plaintiff in error, cited: Cent. L. J. 51-75; Brocchus v. Morgan, 5 Cent. L. J. 53; Cook v. Tullis, 18 Wall. 332; Ex parte Hobbs, 14 Nat. Bank Reg. 495; Greene v. Haskell, 5 R. I. 456.

T. A. & H. M. POST, for defendant in error.

BAKEWELL, J., delivered the opinion of the court.

The petition alleges that plaintiff, at dates named, placed in the hands of defendant's intestate two sums, amounting in the aggregate to $3,000, to be invested in behalf of plaintiff in contracts for organs,--decedent to account to plaintiff for the funds so invested, and to receive as compensation, as trustee and agent of plaintiff, one-half of the profits; that for the principal and residue of the profits he was to account to plaintiff on demand. It was further agreed that the business was to be conducted and the accounts kept in the name of “Joseph Mills, trustee;” in the event of the death of defendant's intestate, plaintiff to take charge of the fund so invested, and to have full control of settling the business. Deceased received the funds, and deposited them in the Clerk's Savings Bank in the name of “Joseph Mills, trustee;” but before his death, in violation of the trust, deceased, without plaintiff's knowledge or consent, took the entire sum except $159 and invested the same in his own business and converted the same to his own use. The amount so taken has been by deceased so mingled and confused with the individual estate of the deceased as to be incapable of separation from the general mass. That at the time of the death of Mills there was in his hands, uninvested, the said sum of $159, which defendant wrongfully claims and holds as part of the estate of his intestate; and that there is in defendant's hands as administrator the sum of $3,000 in money, and other property inventoried at $40,000. The prayer is that the assets be impressed with a trust to the amount of the fund wrongfully converted, that an accounting be had, and defendant required to pay out of the assets to plaintiff the amount converted, and also $159 and interest.

Defendant demurred, on the ground that the petition did not set forth facts sufficient to constitute a cause of action. The demurrer was sustained; and plaintiff declining further to plead, there was final judgment.

It is well settled that where a trustee converts trust funds into another species of property, it will be held liable to the rights of the cestui que trust if its identity can be traced under the new form. The cestui que trust is held to be, in equity, the owner of the new property, and it is accordingly decreed to him. But this is only when the identity can be established; and in the case supposed, it must be proved clearly that the very fund pursued has been paid out for the identical property which is to be affected with a trust. Where the subject-matter of the trust has been turned into money, or was originally money, and the means of ascertainment fail, owing to its being mixed and confounded with the mass of the estate of the trustee, the right to follow the property ceases, because that right depends upon the power of identifying the original property through any change of its original state and form.

The cestui que trust may follow the money into the hands of a banker, if the account, though in the individual name of the trustee, is not complicated with funds belonging personally to the trustee; and even if the trustee has deposited his own money in the same account, and withdrawn part of the trust fund for his own purposes by checks, yet if by applying the checks to the earliest items of deposit, whether of the trust fund or the trustee's money, and reducing the earliest items pro tanto, it can be clearly seen that any of the trust fund remains in the bank, under...