Williams v. Williams

• Decision Date: 10 May 1882
• Citation: 12 N.W. 465,55 Wis. 300
• Parties: WILLIAMS, ADM'R, v. WILLIAMS AND OTHERS.
• Court: Wisconsin Supreme Court

55 Wis. 300

12 N.W. 465

WILLIAMS, ADM'R,

v.WILLIAMS AND OTHERS.

Supreme Court of Wisconsin.

Filed May 10, 1882.

Appeal from circuit court, Rock county.

July 10, 1875, Harry C. Williams had in his possession, as administrator of said estate, $665.70, and deposited the same, for safe-keeping and greater security and convenience, in the Corn Exchange Bank of Waupun, near which he resided, taking a certificate of deposit in his own name for the amount. The court found that the bank was at the time in good credit and repute, as safe, solvent, and in all respects trustworthy; that in making the deposit the administrator informed the teller, who received the money and gave the certificate, that the moneys were trust funds, and did not belong to him individually, but did not inform him as to whom the money did in fact belong, nor give any direction as to the deposit being made or the certificate issued in any other than his individual name; that said administrator had previously had money on deposit to his individual credit, but at the time in question had none; that the $665.70 was at the time in fact placed to his individual credit on the books of the bank, and so remained; that at the time of making the deposit he took the certificate and retained the same; that in August, 1875, the bank failed, and the amount became wholly lost and the certificate wholly worthless, except as to a small dividend upon the assets in the hands of the receiver; and, as a conclusion of law, that the administrator was not entitled to credit for the amount of such loss, but must fully account for and pay over to the estate the amount of the money so deposited, and accordingly affirmed the order or judgment of the county court disallowing such credit and holding him to such accountability. And from the judgment thereupon entered this appeal is brought.Bennett & Sale, for appellant.

S. U. Pinney and H. S. Winsor, for respondents.

CASSODAY, J.

The very small portion of the argument heard, and a hasty reading of the printed briefs, strongly impressed the writer with the justice and equity of the appellant's theory; but my brethren, who heard all the arguments, are clearly of the opinion that the findings of the circuit court are in accordance with the evidence, and that the law applicable thereto rigidly holds the administrator accountable for the amount of the deposit in question. A very careful examination of the authorities induces me to acquiesce in their judgment. Undoubtedly the general rule is that trustees are liable only for good faith and common prudence, and that if a loss happens to a trust fund, in relation to which they have exhibited this care and prudence, they may be allowed for the loss in their accounts. This is abundantly shown by the authorities cited by the able counsel for the appellant. But here the trust fund was not left with the bank for safe-keeping, and to be preserved in kind as a special deposit, but as a deposit to the credit of the depositor, and the amount of which was “payable to the order” of the depositor “ in currency on the return of” the “certificate properly indorsed.” Thus it is plain that the identical money deposited was not to be returned, but the amount of it was to be paid “in currency” on presentation of the certificate properly indorsed. In other words, the depositor departed with the money for the general use of the bank, and took from the latter its obligation to repay a like amount in currency when required as stated. The authorities seem to hold, and it would probably be conceded, that the cestui que trust of this fund could have held the bank liable as against the personal representatives, creditors, or legatees of the depositor. But the question here is whether the depositor is released from liability to his cestui que trust by reason of such deposit, and the subsequent failure of the bank?

The earliest case cited is Knight v. Lord Plymouth, 3 Atkyns, 480; S. C. 1 Dickens, 120, decided by Lord Chancellor Hardwicke in 1747, where it was held that “where a receiver pays money to a tradesman, and takes bills for the sum, if he was in credit at the time, though he fails soon after, it shall not affect the receiver.” It does not appear from the report of that case whether the deposit was made by the receiver as receiver or as an individual.

In Wren v. Kirton, 11 Ves. Jr. 377, Lord Chancellor Eldon said: “In Knight v. Lord Plymouth, I apprehend, the deposit with the country banker was to the account of the receiver as receiver; not to his individual account.” And subsequently, in the same case, he said: “I should not much fear to contradict that case of Knight v. Lord Plymouth, upon what has been done by later authorities, if it is as represented; for nothing is more dangerous. * * * If he goes to a responsible banker, and gets a bill upon a responsible house in London, in his favor as receiver, that bill, so ear-marked, would be specific assets to the credit of the trust property.” And so, in the case last cited, he held the “receiver charged with a loss by the failure of the banker; having made the remittances to his own credit and use, and not to a separate account for the trust.” The same rule was followed by Lord Chancellor Brougham in Salway v. Salway, 2 Russell & Mylne, 215, subsequently affirmed by the house of lords, Id. 751. See White v. Baugh, 3 C. & F. 44. It is true that Knight v. Lord Plymouth has frequently been referred to in other cases without such discrimination, ( Routh v. Howell, 3 Ves. Jr. 566; Lovell v. Minot, 20 Pick. 119;U. S. v. Thomas, 15 Wall. 343;Seawell v. Greenway, 22 Texas, 697;) but the distinction thus made by Lords Eldon and Brougham seems to be well supported by authority. See Massey v. Bonner, 4 Madd. 413; Tebb v. Carpenter, 1 Madd. 290; Matthews v. Brise, 6 Beav. 239.

In holding the trustee liable in the last case cited, the learned master of the Rolls lays stress on the fact that the exchequer bills “remained undistinguished” as trust property in the hands of the broker, and indicates that if he would have escaped liability he should have distinguished them as such trust property. To the same effect is Massey v....