Court Opinion

ID: 3426186
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:54:12.478038+00
Date Added: 2024-06-11T13:55:12.753135
License: Public Domain

ON PETITION FOR REHEARING.
Appellant in its petition for rehearing insists that the court failed to decide the real question in the case and which is stated by appellant in his petition as follows:
"Is appellant entitled to a preference claim for the amount of its collateral funds which the trial court says, and the undisputed evidence of record proves, were collected by appellee's insolvent and invested in its property now in the possession of appellee, and which question this court has always heretofore answered in the affirmative?"
If it be assumed that there existed a fiduciary relation between appellant and appellee's insolvent we understand the equitable rule applicable, to be that, if trust property, 6.  either in its original or substituted form, can be traced into the assets in the hands of the insolvent, or his assignee, the fiduciary may have a lien established or a preference decreed over the claims of the general creditors, although the identity of the trust fund is lost. But in such cases it must be made to appear that the trust property is actually represented in the assets. Windstanley et al. v.Second National Bank (1895), 13 Ind. App. 544, 41 N.E. 956, and cases there cited. It was said in the case last cited that: "If *Page 140 
the agent should take the money (meaning the money of its principal) and apply it to the payment of his debts, or use it for other purposes, so that it is consumed, it would then form no part of his estate. The beneficiary under such circumstances is not equitably entitled to a preference. While it is true that in using the money to pay his debts it may have inured to the benefit of the estate, still this may be said of all contract debts. `In a very general sense, all creditors of an insolvent may be supposed to have contributed to the assets which constitute the residuum of his estate.' Cavin v. Gleason
(1887), 105 N.Y. 256, 11 N.E. 504. We know of no reason founded in justice why the beneficiary should have a superior right over the general creditors under such circumstances."
If the money collected by appellee's insolvent went into the property now represented by the assets in the hands of the assignee, appellant would be entitled to a preference 7, 8.  over general creditors. There is nothing in the findings, nor is there any evidence from which the court could have found that the money belonging to appellant went into any of the assets coming into the hands of the receiver. The evidence shows that appellee's insolvent collected certain money upon accounts that had been placed with appellant as collateral security. That when so collected it was deposited in the general bank account of said insolvent and was used in the payment of the expenses of running the business, salaries, commission and things of that kind. That merchandise was purchased with some of it, manufactured into articles and sold, and other merchandise was purchased to take the place of that which was previously purchased and used, and new accounts were created, but nowhere was it shown that the money collected by appellee's insolvent purchased any of the merchandise that passed into the hands of the receiver. It *Page 141 
is a well established rule that a party seeking to invoke judgment of the law must produce the facts which will support the judgment; and no inference or intendment will be indulged in favor of a special finding or verdict.
The court's finding No. 16 specifically found that "said receiver does not now have in its possession any funds or other property represented by funds collected on accounts assigned to the petitioner."
If, as we said in the beginning, the fiduciary relation as contended for by appellant, be conceded, yet it is not entitled to a preference under the rules above stated.
Rehearing denied.