Court Opinion

ID: 6507434
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:19:25.862344+00
Date Added: 2024-06-11T15:54:46.725565
License: Public Domain

A. J. WALKER, C. J.
A trustee loaned the funds of the trust, on note and mortgage executed to himself individually. This was a commingling of the trust funds with his own, and a destruction of their identification; and therefore he is liable for their loss. This principle may work an individual hardship in this case ; but it is the law, long established, and recognized by the courts as “essential to the general interests of mankind.”—Lewin on Trusts, m. p. 296, 333; 2 Story’s Equity, § 1270; Fonblanque’s Equity, 474, n.; Freeman v. Fairlie, 3 Merivale, 28; Wren v. Katon, 11 Vesey, 377; Massey v. Banner, 4 Mad. 413; Fletcher v. Walker, 3 ib. 73; Routh v. Howell, 3 Vesey, 565; Verner’s Estate, 6 Watts, 250; Kellett v. Rathbun, 4 Paige, 102; Case v. Abeel, 1 ib. 402 ; Hart v. Ten Eyck, 2 Johns. Ch. 108; Mumford v. Murray, 6 ib. 1; Diffenderfer v. Winder, 3 G. & J. 342 ; Jameson v. Shelby, 2 Hum. 198 ; Dayton on Surrogates, 489 ; 2 Lomax on Ex. 561, m. p. 341; Hill on Trustees, 376 ; Ex parte Hilliard, 1 Vesey, 89 ; Roche v. Hart, 11 Vesey, 61; Ivey v. Coleman, at the present term; Tiffany & Bullard on the Law of Trusts & Trustees, 582; 2 Williams on Ex. 1546; Pennell v. Deffield, 23 Eng. L. & Eq. 460; In the matter of Stafford, 11 Barb. 353 ; 3 L. C. in Eq., m. p. 740, top 445; West Br. Bank v. Fulmer, 3 Penn. St. R. 390 ; McAllister v. Commonwealth, 30 Penn. St. 536; Commonwealth v. McAllister, 28 Penn. State, 480 ; 2 Lomax on Ex. 485 ; Boyers’ Appeal, 11 Penn. St. 36 ; Matthews v. Brise, 6 Beavan, 239; Macdonall v. Harding, 7 Sim. 5; Stanley’s Appeal, 8 Penn. St.
We do not mean to affirm, that when the investment is made in the individual name of the trustee, the cestui que trust may not follow the fund into the investment. All that we need decide, or do decide in this case, is, that the trustee is guilty of a devastavit, at the election of the cestui que trust.—Pennell v. Deffield, 23 Eng. L. & Eq. 460. It may be admitted, that such investment does not constitute a devastavit, until the election of the cestui que trust is signified. *711This view would reconcile our position with the argument of the court in Tompkies v. Reynolds, 17 Ala. 109, 116.
The decree is affirmed.
JUDGE, J.
In the case of Beasley and Wife v. Watson, decided at the June term of this court, 1867, the guardian deposited in the Confederate States “ Depository Office,” at Eufaula, a sum of money belonging to his ward, to be funded in Confederate States four-per-cent, bonds, and took a certificate of the deposit in his own name as an individual, and not as guardian. On the final settlement, the introduction of this certificate in evidence by the guardian was objected to ; and we held that it was properly admitted, inasmuch as it was competent to show by parol evidence, in connection with the certificate, that the investment had been made with the money of the ward. The question was not distinctly presented, though it may have been covered by the general objection made, that the guardian, by taking the certificate in his own name as an individual, had been guilty of a conversion of the fund, and that on that ground the ward elected to charge him with the amount of it; and no such question was presented, or argued, in this court. The point decided in that case, in this connection, there^re, was simply this : that it was competent to show by parol with what funds, and for whose benefit, the investment, under the circumstances, was made, which we still think it was clearly competent to do. The decision in the case of Beasley and Wife v. Watson, therefore, is not to be taken as an authority against the conclusion attained in the present case, which seems to be sustained by such an overwhelming array of authorities.
Walker, G. J., and Byrd, J., assent to the explanation above given, in reference to the opinion in the case of Beasley and Wife v. Watson.