Court Opinion

ID: 4004705
Source: CourtListenerOpinion
Date Created: 2016-07-06 11:05:52.685719+00
Date Added: 2024-06-11T13:34:24.229301
License: Public Domain

The following facts are not in controversy. On July 25, 1924, H. A. Robson purchased from Prichard School, in his own name, an undivided one-half interest in three city lots. The purchase was made for Robert and Luther Mankin. The purchase price was $34,750.00, of which Robson paid $750.00 in cash and executed his personal notes for the balance. One note of $4,000.00 was due in six months and three notes of $10,000.00 each were due in one, two and three years, respectively, from date of purchase. The $4,000.00 note was paid about two weeks after it fell due. On May 21, 1925, Lewis Prichard Charity Fund, at the instance of Robson, its trustee, loaned Robert and Luther Mankin $35,000.00, which was placed to the account of R. Mankin Company, a partnership composed of Robert and Luther. On July 25, 1925, R. Mankin Company paid to Prichard School the first of the $10,000.00 notes and in course of time paid the two remaining notes.
The Mankins and Robson testify that he received none of the money borrowed from the Charity Fund. The Mankins say that this money was used in their general business and none was paid directly to Prichard School. The following conclusion, however, seems clear. Robson, by obligating himself to pay Prichard School for the moiety purchased in behalf of the Mankins, underwrote the Mankins for that payment, of which $30,000.00 was still unpaid in May, 1925. The Mankins were then in financial straits, as evidenced by the mortgage of their homes to secure the loan from the Charity Fund. By arranging that loan to them, Robson eased their financial strain and enabled them to pay from their general funds *Page 144 
the $30,000.00 for which he himself was still obligated. Thus, the loan, in effect, relieved him of that obligation. A trustee is not permitted ordinarily to manipulate trust funds so as to derive any personal advantage. Perry on Trusts (7th Ed), sec. 427; Pomeroy Eq. Juris. (4th Ed.), sec. 1075; 65 C. J. subject Trusts, sec. 520.