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county treasurer 214 in this state by virtue of the office, are considered as public moneys, and the state or the county may maintain an action like the ones at bar to charge with a trust the property purchased with such public moneys, or the moneys in whatever form or transmutations they may have undergone, provided they can be traced or identified. A difficulty arises under the findings of the district court in these cases, as it does not appear that the public funds deposited with Kent can be traced or have been traced into any specific fund or property. Their deposit is found to be a general and not a special deposit, and they were evidently not to be returned in specie, but in equivalents. They can be traced to the possession of the insolvent, the assignor, and into his estate, but no further. No particular property is discovered into which they were converted or found their way, or for which they were substituted, but the findings, on the contrary, are that they went into the mass of the funds of the bank and were applied generally to the payment of the debtors, including the mass of depositors in the usual course of business. There is no property of the insolvent estate, other than the moneys on hand and the balances due and owing to Kent from other banks at the time of his assignment, which can be considered to represent any portion of the trust moneys. Some loans were negotiated by Kent and passed by the assignment, but at the time of the assignment there was in the vaults of the bank only the sum of $2,058.72 in cash and on deposits in other banks the sum of $1,684.32.

In following trust funds, they must first be traced to the estate of the trustee or quasi trustee, and the corpus of the funds must be found. It must be in esse in some form, or it cannot be identified. Where the trust moneys are mingled with those of the trustee, the trust may be impressed upon such fund or property with which it is mingled, but if it appears that the trust moneys are dissipated or lost, there is no fund to impress with the trust, and the sole remedy of the beneficiary is a proceeding against the trustee personally. Where he is solvent, this is the usual remedy pursued, as by judgment and execution, the whole estate can 215 be impressed with the amount of the judgment. Some of the courts have held as the "modern" equity doctrine that all that is necessary is to trace the trust moneys into the estate of the trustee, which then becomes impressed with the trust. This was the rule established by a number of cases in the supreme court of Wisconsin until a return to the general rule was announced in Nonotuck Silk Co. v.

[Wyoming, Flanders, 87 Wis. 237, and the former cases were overruled. The leading cases on the subject are those of Cavin v. Gleason, 105 N. Y. 256, 262, Little v. Chadwick, 151 Mass. 109, and Slater v. Oriental Mills, 18 R. I. 352.

That the money constituting the trust may have been wrongfully converted by the defaulting or delinquent trustee does not seem to alter the situation as some of the courts hold. There is no peculiar sanctity that surrounds an action ex delicto, as distinguished from an action ex contractu, at law, so far as the obtaining satisfaction of any judgment is obtained, and, when equity is invoked in the former cases, equitable rules must be applied. Where no specific lien is created by contract or the acts of the parties, none exists. The only course open in equity is to discover the corpus of the trust fund, or to follow the changes and transmutations of the trust moneys into some particular property that can be charged with the trust, saving the rights of innocent purchasers for value. The courts generally have gone as far as it seems possible in holding that the presumption always is that the trustee has used his own funds in his business operations, and if there be any money on hand at the time the trust is sought to be enforced, that presumption controls. So the trustee who has blended trust moneys with his own is not permitted to say that he has used trust moneys when he had a right to use his own. This appears to be one of the principles that governed the decision in the famous case of Knatchbull v. Hallett, L. R. 13 Ch. Div. 696, which overruled some prior English decisions. It is to the effect that if a person who holds money as a trustee, or in a fiduciary character, pays it to his account at his bankers and mixes it with his own money, and afterward draws out sums by checks 216 in the ordinary manner, the drawer must be taken to have drawn out his own moneys in preference to the trust money. This principle pervades some of the cases which adopt the rule that the entire estate of the trustee is impressed with the trust moneys traced to it. In Kimmel v. Dickson, 5 S. Dak. 221, 49 Am. St. Rep. 869, the moneys found in a defunct bank amounted to $259.71, while the amount left there by the plaintiff before it failed to be used for the payment of his note was $265. The case was decided upon the authority of Ellicott v. Barnes, 31 Kan. 170, Peak v. Ellicott, 30 Kan. 156, 46 Am. Rep. 90, and upon the case of McLeod v. Evans, 66 Wis. 401, 57 Am. Rep. 287, which had then been overruled by Nonotuck Silk Co. v. Flanders, 87 Wis. 237, but the order of the trial court was affirmed, and that

was that the receiver of the insolvent bank pay to the plaintiff "the sum found in the bank at the time of its failure, although it was less than the sum left there for the specific purpose of paying the note. So it was in the case of Massey v. Fisher, 62 Fed. Rep. 958, very recently decided. In the course of the opinion the court remarks: "It is not important that the plaintiff's money bore no mark and cannot be identified. It is sufficient to trace it into the bank's vaults and find that a sum equal to it (and presumably representing it) remained continuously there until the receiver took it. The modern rules of equity require no more." Some of the cases cited by the learned judge go farther than he, but his conclusion, though reached at the extreme limits of the rule, seems correct. The trust moneys here are traced to the bank vaults and to deposits made elsewhere, and the sum found there represents a portion of it. The amount of moneys on hand at the time of the assignment to the defendant for the benefit of the creditors of Kent constitutes the only portion of the trust moneys that can be traced and identified as trust moneys, and these only under the fiction or presumption that seems to be a well-established rule of equity, that the trustee is presumed to have paid out his own moneys and kept those belonging to the trust. This was tacitly conceded upon the argument by counsel for the defendant.

217 The commercial paper representing loans made to different parties before the assignment and passing by it to the assignee, as the court below finds, were severally exchanged for moneys when there was sufficient funds of Kent on hand out of which the loans were made. Upon the presumption as established in equity and referred to above, it must be held that these loans were made from the moneys of the trustee and not from the trust funds, and should not be impressed with the trust.

As the inquiries of the district court have been answered generally by this opinion, it will not be necessary to specifically answer the questions propounded.

Corn and Blake, JJ., concur.

Hon. J. W. Blake, judge of the district court for the second judicial district, sat in lieu of Mr. Justice Conaway, who was disqualified by reason of his interest in the proceeding.

COMMON LAW-EXISTENCE OF, IN THIS COUNTRY.Only so much of the common law as is applicable to our circumstances and customs is recognized as part of our common law: Note to Reno Smelting Works v. Stevenson, 19 Am. St. Rep. 374. Compare note to Parsons v. Lindsay, 13 Am. St. Rep. 290.

ASSIGNMENT FOR BENEFIT OF CREDITORS-CLAIM OF STATE-PRIORITY.-The claims of the state are prior to those of other creditors: Note to Yeatman v. King, 33 Am. St. Rep. 804; but the priority of the state is lost by a valid assignment for the benefit of creditors: State v. Bank of Maryland, 6 Gill & J. 205; 26 Am. Dec. 561. The money of a general depositor in a bank is the property of the bank, and subject to assignment by it for the benefit of creditors: Hawes v. Blackwell, 107 N. C. 196; 22 Am. St. Rep. 870.

TRUSTS-FOLLOWING TRUST FUNDS-IDENTIFICATIONPRESUMPTION.-A trust creditor cannot obtain a lien or preference over other creditors of an insolvent estate until he makes it appear that the fund or property of the debtor which he seeks to affect with such lien or preference includes the trust property or the proceeds thereof. The trust fund or its proceeds must be traceable. Hence, the cestui que trust, after dissipation of the trust fund, has no longer any remedy in equity to fix a charge upon the estate of such trustee, but must come in and share with the general creditors: Ferchen v. Arndt, 26 Or. 121; 46 Am. St. Rep. 603, and monographic note thereto on the right to follow trust funds. See, also, Springfield Inst. v. Copeland, 160 Mass. 380; 39 Am. St. Rep. 489. If trust funds are traced into assets of the unfaithful trustee, or one who has knowledge of the character of the funds, they become a preferred charge upon the entire assets with which they are mingled, no matter of what such assets consist: Myers v. Board of Education, 51 Kan. 87; 37 Am. St. Rep. 263. Compare monographic note to Union Nat. Bank v. Goetz, 32 Am. St. Rep. 125-130, on the right to pursue and recover trust funds. If a trustee draws checks upon his bank account, he will be presumed to have drawn out his own funds, and to have left moneys held in trust: Drovers' etc. Nat. Bank v. Roller, 85 Md. 495; 60 Am. St. Rep. 344, and note.

SNYDER V. STATE.

[5 WYOMING, 318.]

OFFICERS-OFFICIAL

BONDS-MISAPPLICATION

OF

FUNDS AFTER SURETY'S DEATH-LIABILITY OF HIS ESTATE. The estate of a deceased surety upon an official bond is liable for any misapplication of funds, by the officer, occurring after the surety's death.

OFFICERS--OFFICIAL

BONDS-MISAPPLICATION

OF

FUNDS AFTER SURETY'S DEATH-LIABILITY OF HIS ESTATE.-If a testator signs an official bond as surety, his estate, after his decease, is liable for a misapplication of funds by the officer, although it is made after a sole executrix and legatee has given a bond to pay the debts of the testator.

OFFICERS-OFFICIAL BONDS-CHANGE OF LAW-RELEASE OF SURETIES.-A change in the law, after an official bond is given, providing for a different kind of a bond, does not release the sureties on the former bond for any misapplication of funds occurring after such change, if the subject matter of the action is not affected by the change.

OFFICERS INCREASING

RESPONSIBILITIES

BY

CHANGE OF LAW-RELEASE OF SURETIES.-Increasing the responsibilities of a public officer, in matters properly pertaining to his office, does not have the effect of discharging the sureties on his bond from liability. Hence, if the fees of his office, at the time he is elected, are his compensation, a subsequent law requiring him to account for them does not release the sureties on his official bond from liability for the officer's failure to account for money deposited with him in his official capacity.

EXECUTORS AND ADMINISTRATORS-TERM "DEBTS” INCLUDES WHAT.-The term "debts," as used in statutes relating to the estates of deceased persons, is not limited to such as are strictly legal debts, but manifestly includes every claim and demand by a creditor, whether recoverable at law or in equity.

Suit in the name of the state, for the use of Catherine Donnelly, upon a bond given by a sole executrix and legatee, against Priscilla M. Snyder, as principal, and Joseph A. Breckons, Ephraim S. Johnston, and Abram Underwood, as sureties. On September 11, 1890, one Samuel Atkinson was elected as a clerk of the court for the term ending January 2, 1893. He executed an official bond with Albert D. Kelley, John K. Jeffrey, Albert C. Snyder, and George L. Beard, as sureties, conditioned that he should account for all moneys coming into his hands as clerk, and that he should otherwise faithfully discharge the duties of his office. On March 17, 1892, there was paid into his hands, as clerk, in a certain condemnation proceeding, the sum of three hundred and fifty-seven dollars and fifty cents, for the use of Catherine Donnelly. He never accounted for this money. It was alleged in the petition that the condition of the bond of Priscilla M. Snyder had been broken, and judgment was prayed for the sum named, with interest. A copy of each bond was attached to the petition. A general demurrer to the petition was overruled, judgment was awarded in favor of Catherine Donnelly, and the defendants appealed by prosecuting a writ of error. The clerk of the court was elected at the first state election. At that time the laws of the territory provided fees for such officer which were retained as his compensation. The constitution required that all officers, with some minor exceptions, should be paid fixed salaries, and that the fees should be paid into the proper treasury. The first state legislature enacted a law to that effect, fixing the salary of the clerk, as well as of other officers.

R. W. Breckons, for the appellants.

Baird & Churchill, for the appellee.

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