Present: Carrico, C.J., Compton, Stephenson, Whiting,*

 Hassell 

and Keenan, JJ., and Cochran, Retired Justice 

CRESTAR BANK 

v. Record No. 941300 

GEOFFREY T. WILLIAMS, ET AL. 

VIRGINIA S. SMITH 

OPINION BY JUSTICE A. CHRISTIAN COMPTON 

v. Record No. 941563 September 15, 1995 

GEOFFREY T. WILLIAMS, ET AL. 

THE RELIANT GROUP, L.P., ETC. 

v. Record No. 941574 

JOSEPH P. BRACCO, ET AL. 

FROM THE CIRCUIT COURT OF ARLINGTON COUNTY 

William T. Newman, Jr., Judge 

 These appeals stem from a trial court's decree in two 

consolidated chancery suits that, inter alia, granted a 

constructive trust in favor of 17 "investors" with reference to 

seven assets of a defaulting debtor. The constructive trust 

established priority of the investors' claims over those of 

certain of the debtor's judgment creditors. 

 The dispositive question on appeal is whether the court 

below erroneously declared a blanket constructive trust in favor 

of the investors when they failed to trace "invested" funds to 

the debtor's acquisition of any particular asset. 

 The pertinent facts are not in dispute. Generally between 

 

 *Justice Whiting participated in the hearing and decision of 

this case prior to the effective date of his retirement on 

August 12, 1995. 
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1986 and 1990, at least 17 individuals, the investors, deposited 

sums of money with Geoffrey T. Williams, an Arlington attorney. 

Williams represented that his "net worth" was $5 million and that 

he would invest the funds and provide high returns on the 

investments, with little or no risk. He required a "minimum 

investment" of $10,000. The separate agreements between Williams 

and the individuals generally provided that the investment funds 

would be used to acquire real estate, or other interests, that 

the funds could be withdrawn upon demand, and that the return 

would be at least 13.5%. Some investors received promissory 

notes, others did not. 

 Williams "jumbled" the investors' deposits together with the 

funds of his law practice and other real estate investments. He 

issued periodic statements of account balances to his "family of 

investors" and, in some cases, permitted withdrawals. During 

this period, Williams borrowed millions of dollars from 

commercial and private lenders, acquiring many assets. 

 By 1990, Williams did not allow withdrawals from the 

investors' accounts. Thereafter, he rarely came to his Arlington 

law office, instead communicating by courier and by mail from an 

address in Maryland. In February 1992, he fled the Commonwealth 

leaving many creditors, after a capias was issued in his divorce 

case for his arrest. In July 1992, Williams arranged for the 

removal of all his financial records from his bookkeeper's home. 

 The whereabouts of the records and Williams is unknown. Sums 
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owed the investors range from approximately $15,000 to $100,000 

each. 

 In 1992, the 17 disappointed investors filed the present 

suits, labelled "creditors bills," seeking monetary and other 

relief. They alleged that Williams breached his agreement to 

invest their funds at a guaranteed return and sought, inter alia, 

a constructive trust upon certain of Williams' property. The 

seven assets involved in this appeal are four parcels of real 

property titled in the name of Williams as trustee (or his 

sister, Constance Rogers-Panos), two partnership interests held 

by "Williams, Trustee," and one partnership interest titled in 

the name of Williams individually. Named as defendants, either 

initially or through amendment to the suits, were many of 

Williams' judgment creditors. 

 Also named as a defendant was Williams individually and as 

trustee. During the course of the litigation, Williams, who did 

not personally appear, filed a stipulation stating that he had 

been properly served with process and that the trial court had 

personal jurisdiction over him. In the stipulation, the 

investors withdrew a claim for punitive damages against Williams. 

 After consolidation of the suits below, the matter was 

referred to a commissioner in chancery who held six hearings 

during the period September 1992 to December 1993. In a March 

1994 report, the commissioner recommended, inter alia, imposition 

of a blanket constructive trust upon the seven properties with 
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the 17 investors as beneficiaries. The commissioner found that 

the constructive trust had priority over all record judgment 

creditors and over a charging order entered against one of 

Williams' partnership interests. See Code § 50-28 (upon 

application by judgment creditor of a partner, court may charge 

the interest of the debtor partner with payment of unsatisfied 

amount of judgment). In addition, the commissioner recommended 

that money judgments be entered in favor of the investors against 

Williams individually and as trustee, and that charging orders be 

entered against certain of Williams' partnership interests. 

Exceptions were filed to the commissioner's report. A common 

ground of the exceptions filed by each of the present appellants 

was that the commissioner's recommendation regarding imposition 

of a constructive trust was erroneous because the investors 

failed to show by clear and convincing proof a tracing of funds 

to particular assets. 

 In a June 1994 decree from which these appeals are 

prosecuted, the trial court generally confirmed the 

commissioner's report. The court found that Williams owed a 

total of $449,789.83 to the investors from whom he had obtained 

funds during the period in question. The court entered money 

judgments in favor of each investor for the amount of their loss 

against Williams individually and as trustee. The court "granted 

a constructive trust" in the investors' favor against the seven 

properties and interests. The court ordered that "these 
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constructive trusts are held" by the investors "pro rata in 

proportion to their judgments" against Williams and that the 

trusts "are liens superior to judgments against Geoffrey T. 

Williams, either individually and as trustee." The court also 

ordered, as recommended by the commissioner, sale of the realty 

subject to the priorities the court had established, and that the 

proceeds be applied to the discharge of the judgments, pursuant 

to Code § 8.01-462, finding that the rents and profits of the 

realty subject to the judgment liens would not satisfy the 

judgments in five years. 

 Three of the creditors appeal. Appellant Crestar Bank, 

successor by merger to one of Williams' judgment creditors, had a 

charging order against a partnership interest of Williams and its 

judgments docketed against real estate displaced by the trial 

court's imposition of the constructive trust. 

 Appellant Virginia Seekford Smith had her interest in a 

condominium unit and a general partnership displaced by the 

imposition of the constructive trust. Appellant The Reliant 

Group is the successor in interest to the holder of a recorded 

judgment lien in the principal amount of $277,475.51 displaced by 

the trial court's ruling. 

 The investors have not appeared in these appeals beyond the 

petition stage; they elected neither to file appellate briefs nor 

to participate in oral argument. Instead, they filed in this 

Court a suggestion of mootness with reference to a number of the 
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appellants' assignments of error because, they assert, "most of 

the assets subject to the constructive trust imposed by the 

Circuit Court are no longer available to apply to the judgments 

obtained" by them. The appellants have not joined in the 

suggestion, and we shall disregard it. There is no proof in the 

appellate record to sustain the claim of mootness. 

 A constructive trust arises by operation of law, 

independently of the intention of the parties, in order to 

prevent what otherwise would be a fraud. Leonard v. Counts, 221 

Va. 582, 589, 272 S.E.2d 190, 195 (1980). Such a trust may be 

established not only when property has been acquired by fraud or 

improper means, but also when it has been properly acquired but 

it is contrary to equitable principles that the property should 

be retained, at least for the acquirer's own benefit. Id. 

Accord Jones v. Harrison, 250 Va. 64, 70, 458 S.E.2d 766, 770 

(1995). The evidence required to establish a constructive trust 

must be clear and convincing. Cooper v. Cooper, 249 Va. 511, 

517, 457 S.E.2d 88, 92 (1995). 

 Moreover, in order to be entitled to the benefit of a 

constructive trust, a claimant's money must be "distinctly 

traced" into the chose in action, fund, or other property which 

is to be made the subject of the trust. Watts v. Newberry, 107 

Va. 233, 240, 57 S.E. 657, 659 (1907). See Cooper, 249 Va. at 

517-19, 457 S.E.2d at 92-93. 

 And, notwithstanding the weight ordinarily given a 
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commissioner's report confirmed by the chancellor, and the 

respect that is accorded to the findings, no judgment based 

thereon will be affirmed on appeal when the findings are 

unsupported by the record. Clevinger v. County School Board of 

Buchanan County, 139 Va. 444, 447, 124 S.E. 440, 441 (1924). 

This is such a case. 

 The record is devoid of proof, by clear and convincing 

evidence, distinctly tracing the investors' money into any of the 

properties that are the subject of the constructive trust. Thus, 

the claim of each investor-beneficiary for breach of trust 

becomes merely that of a general creditor. 

 For example, investor John Baird testified that Williams 

"never told me that he was going to use my specific money to 

invest in real estate." Williams presided over a meeting of some 

of the investors in January 1989. There, he presented to those 

in attendance a long list, heavily relied upon below by the 

investors, of purported investments in local bank stocks, 

publicly traded stocks, real estate, and pizza shops. But that 

document fails to show which investment related to any particular 

investor in any particular proportion. 

 Also, investor Joseph Bracco, who had been one of Williams' 

clients and who innocently interested friends and relatives in 

Williams' "enterprise," testified that he understood from the 

January 1989 meeting that about $130,000 of his funds were 

invested by Williams in real estate, but he did not identify 
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specific sums used to purchase specific assets. 

 In addition, investor Rodger Hicks testified that Williams 

made "no provision" to advise him what properties Hicks' funds 

"would be invested in." Also, investor Patrick Glott, who 

attended the 1989 meeting, testified he merely "drew the 

assumption" that his "investment money was being directed to" the 

properties on the list. The testimony of the remaining investors 

was equally vague and nonspecific. 

 In sum, the record is clear that the investors' funds were 

hopelessly commingled and not traceable. The funds were not 

earmarked for the acquisition of specific property, and there is 

no documentary evidence to identify the amount of each investor's 

money that was used in the acquisition of any specific asset. 

The record shows that Williams had the general authority to 

invest and divest the pooled funds in a variety of ventures at 

his sole discretion, and that the investors had no idea how their 

funds were being used other than a general understanding that the 

funds might be used to acquire real estate and other investments. 

 Because of the failure of the investors to satisfy the tracing 

requirement for imposition of a constructive trust, the property 

in question titled in the name of Williams or Williams as trustee 

is subject to the lien of all valid record judgments against him. 

 Appellant Virginia Seekford Smith, while joining the other 

appellants' argument on the tracing issue, raises two additional 

issues in her appeal. She is interested in two of the properties 
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in question: Unit 812 of The Representative condominium, located 

in Arlington County; and Lee Stafford Associates partnership, an 

investment trust. 

 Smith, co-owner of an Arlington real estate company, engaged 

"in a number of business deals" with Williams from 1986 to 1992. 

 Although not a member of Williams' "family of investors," Smith 

advanced funds to Williams during the period 1987 to 1991 

totalling $327,904.29, plus interest, accepting unsecured notes 

for some of the obligations. When Williams failed to repay the 

loans, Smith threatened suit. In exchange for her forbearance to 

sue, Williams executed several additional notes, one secured by a 

deed of trust on Unit 812 in the amount of $50,000 in 1991. 

 The trial court implicitly confirmed the commissioner's 

finding that the sum of $50,000 represented money "Smith had lent 

Williams over a period of time and had nothing to do with" Unit 

812. The commissioner merely found, however, "that the 

constructive trust is superior to said deed of trust." 

 On appeal, Smith seems to argue that the trial court 

expressly invalidated the $50,000 deed of trust on Unit 812. We 

find no such specific ruling either in the commissioner's report 

or in the decree confirming it. The commissioner only ruled that 

the constructive trust was superior to "said deed of trust." Our 

ruling on the tracing issue affords Smith all the relief to which 

she is entitled regarding Unit 812 based on this record. 

 Regarding the Lee Stafford Associates partnership, the 
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commissioner found that Williams as trustee had a 12% interest. 

The interest originally had been 4%, but he purchased an 

additional 8% with $75,000 Smith "gave" him. The partnership 

agreement required consent of a majority of the voting partners 

for a transfer of an interest in the entity. To avoid this 

requirement, Smith entered into a side, joint venture agreement 

with Williams whereby she would receive a 4% interest in the 

partnership, representing $37,500 of the "loan" to Williams. 

According to the commissioner, Williams agreed to repay Smith 

"the balance he had borrowed, $37,500." The commissioner found, 

and the trial court confirmed, that Smith was entitled to a 4% 

interest in the entity and the remaining 8% interest was subject 

to the constructive trust. 

 On appeal, Smith contends she should be awarded an 

additional 4% interest in the Lee Stafford partnership. We 

disagree. We cannot say that the commissioner's finding is 

unsupported by the facts and reasonable inferences to be drawn 

from those facts. 

 Finally, Smith assigns error to the failure of the 

commissioner and the trial court to rule upon a statute of 

limitations defense she raised at every stage of the proceedings. 

 She contends that "a substantial portion" of the investors' 

claims are time barred. She argues that many of the investors 

received demand notes from Williams in exchange for their money, 

none of which stated a date for final payment of the note. She 
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says that others sued upon agreements not reduced to writing. 

Asserting that as a "co-creditor" she may rely on the bar of the 

statute of limitations in a creditor's suit, Smith asks that the 

trial court be ordered to determine the applicability of the 

statute of limitations to each of the investor's claims. We 

decline this request. 

 The investors' suits were not based upon demand notes but 

upon the continuing relationship between themselves and Williams 

as their fiduciary in the investment of their funds. The trial 

court acknowledged this relationship in a colloquy during Smith's 

oral argument on the exceptions in June 1994. This continuing 

relationship did not end until Williams fled the Commonwealth and 

ceased to render monthly statements of account in early 1992, 

shortly before the first suit was filed in July 1992. Thus, no 

purpose will be served by a remand on the statute of limitations 

issue; the suits clearly were timely. See Keller v. Denny, 232 

Va. 512, 516-19, 352 S.E.2d 327, 329-31 (1987). 

 Consequently, the decree from which the appeals are taken 

will be affirmed in part, reversed in part, and remanded. The 

money judgments entered in favor of the investors, set forth in 

paragraphs 1 through 11 on the first three pages of the decree, 

will be affirmed. The constructive trust against the subject 

properties and interests set forth in paragraphs 1 through 7 on 

the third and fourth pages of the decree will be reversed and 

annulled. 
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 The unappealed ruling voiding certain deeds to Constance 

Rogers-Panos, the ruling on Smith's 4% interest in Lee Stafford 

Associates, and the unappealed ruling awarding a charging order 

against Williams' interest in certain of the properties, all set 

forth on the fourth page of the decree, will be affirmed. 

 The finding that the rents and profits from the subject 

properties will not satisfy the judgments in a five-year period 

(and the order for sale of the properties, execution of the 

charging orders, and appointment of special commissioners of 

sale), set forth on the fifth page of the decree, will be set 

aside and annulled because there is no evidence in the record to 

support that finding. 

 The unappealed orders for reimbursement of costs, for award 

of costs for title examination and photocopies, and quashing of a 

lis pendens, set forth on the fifth page of the decree, will be 

affirmed. Smith's request for an award of attorney's fees will 

be denied. 

 Because the decree appealed from did not end the causes and 

strike them from the docket, although it did adjudicate the 

principles of the causes, the matters will be remanded for entry 

of a decree, not inconsistent with this opinion, which ends the 

causes. 

Affirmed in part,

reversed in part,

 and remanded.