Opinion ID: 1436870
Heading Depth: 1
Heading Rank: 7

Heading: Interest on cash proceeds from sale of stock

Text: (19) The trial court awarded Mitzi 7 percent interest on certain of Ann's stock sold by Sam following her death; interest is to run from the date of sale, rather than the date of Sam's death. Defendants contend that Sam's obligations to Mitzi did not arise until his death, and that his estate should not be held liable for interest prior to that time. Defendants fail to appreciate, however, that upon Ann's death, Sam became constructive trustee of Ann's property, with an obligation to hold all of that property for Mitzi's benefit. Upon Sam's breach of the agreement, Mitzi was entitled to the benefit of those statutory provisions, such as Civil Code section 2237, which measure the liability of a defaulting trustee. (See McDaniel v. McDaniel, 275 Cal. App.2d 927, 944 [80 Cal. Rptr. 837]; Bank of America v. Ryan, 207 Cal. App.2d 698, 710 [24 Cal. Rptr. 739].) Section 2237 obligates a trustee who has wrongfully disposed of trust property to account for all profits so made, or the value of the use of the property, or to account for its proceeds with interest. Thus, the trial court properly awarded Mitzi interest, from the date of sale, upon the proceeds of the stock Sam sold during his life.