Lolordo v. Lacy , 337 Mo. 1097 ( 1935 )

ON MOTION TO TRANSFER TO COURT EN BANC. Defendant asks that this case be transferred to the Court en Banc on the ground that the opinion sanctions imprisonment for debt in violation of Section 16 of Article II of the Constitution. Defendant says that this is the effect of that part of the opinion, ruling on the demurrer to the evidence, which holds that if there was evidence tending to show that any of the sale proceeds received by defendant had not been paid to the administrator or for the benefit of the estate, then it was the duty of the court to overrule the demurrer and submit the case to the jury to determine what that amount was. (As first written the opinion said: "due to the estate from these proceeds," by which was meant "due" because part of such proceeds were being withheld therefrom, but since that term seems likely to be misunderstood that part of the opinion has been modified.) Defendant says that the opinion holds that if he used the funds of the estate in his hands to pay the personal debts of the administrator, he did so at his own risk and that if it was not proper for him to do so, the judgment against him must be affirmed. This he contends would subject him to imprisonment, under Section 66, Revised Statutes 1929, if he does not pay over the amount of the judgment to the administrator, even though he does not have this amount of money and cannot get it, because he has spent it all. It is enough to say that there is no question of imprisonment for debt before us on this record, because defendant has not been imprisoned; because he certainly will not be if he satisfies the judgment which we cannot assume he will not do; and because the question decided herein was only that there was substantial evidence to warrant a finding that defendant had received money belonging to the estate and was wrongfully withholding it therefrom. How this judgment may be enforced, if defendant does not pay the amount found due from him, is not now before us.

[6] The opinion does rule, and we reaffirm it upon the authority there cited, that when a trustee is shown to have received trust money, which belonged to an estate to which it was then immediately due, but instead of paying it to that estate, commingled it with his own money, a prima facie case is made against him, even though he shows that he paid personal debts of the administrator out of the commingled fund, because all money paid out of the commingled fund for purposes other than to or for the benefit of the estate will be, in the absence of a satisfactory showing to the contrary, considered paid out of the trustee's own money and not out of the trust money. Therefore, in the absence of such a showing to the contrary, a jury would be justified, under such circumstances, in finding that such trustee still had the trust money "in his possession or under his control" and was wrongfully withholding it from the estate.

We agree with a recent opinion of the Supreme Court of Illinois that a proceeding to discover assets is not an available remedy to collect a debt due an estate; that "where the relation of debtor and creditor arises for money lent, the debtor owns the money and is indebted to the creditor for it;" and that "consequently the debtor has no money belonging to the creditor, or to the latter's estate, in his possession." [Johnson v. Nelson, 341 Ill. 119, 173 N.E. 77, 88 A.L.R. 849.] However, the Illinois courts have held under their statute, no broader in its scope than ours, that where a fiduciary relation, rather than the relation of debtor and creditor, exists, the summary proceeding does lie. [Blair v. Sennott, 134 Ill. 78, 24 N.E. 969; Mulvihill v. White, 89 Ill. App. 88; Adams v. Adams, 81 Ill. App. 637, affirmed 181 Ill. 210, 54 N.E. 958.] The relation of defendant to this estate was fiduciary. He obtained the fund in question as a trustee. He procured his appointment as trustee from the circuit court to foreclose the two deeds of trust owned by this estate. It was his duty, immediately after the foreclosure, to turn over to the administrator the proceeds of the sale (less the expenses thereof and the amount of the mortgages) and his failure to do so did not give him any title to the trust fund or make him a debtor to the estate. He was given credit in this case for such part of the fund as it was shown he paid out for obligations properly chargeable against the estate. We hold that the jury was justified in finding that he had the rest of the funds "in his possession or under his control" when he showed only that he had paid some personal obligations of the administrator and a claim to himself out of a bank account in which these trust funds and his own funds (in an amount not shown) were commingled together. This court has held (as have the Courts of Appeals) that, where specific personal property of an estate has been sold and the proceeds deposited in the bank account of the seller, the summary proceeding to discover assets is a proper remedy to compel him to pay the amount of the proceeds to the estate, and that this remedy is not "confined to a particular fund — the actual money which belonged to the decedent." [Tygard v. Falor, 163 Mo. 234, 63 S.W. 672; Clinton v. Clinton, 223 Mo. 371, 123 S.W. 1; Vazis v. Zimmer (Mo.), 209 S.W. 909; Newell v. Kern (Mo. App.), 218 S.W. 443; In re Van Fossen (Mo. App.), 13 S.W.2d 1076; for the origin and amendments of this remedy see In re Trautmann's Estate, 300 Mo. 314, 254 S.W. 286; Kelly's Probate Law and Practice, Chapter 17.]

The motion to transfer this case to the Court en Banc is overruled.