Cross v. CrossCross v. Cross
Action in equity to recover a trust fund and to impress a lien for the amount thereof on real and personal property held in entirety by Sam Cross and Maggie Cross, husband and wife, and, since the death of Sam Cross in 1947, held by Maggie Cross. The Circuit Court’s decree ordered a personal judgment against Maggie Cross for the amount of the original trust fund, $2422.38, with interest from the date of death of Sam Cross to the time of entering the decree, $264.00, and interest thereafter, at 6%; and also provided that she could not claim any homestead or other exemptions against the judgment, which was also ordered against the estate' of Sam Cross. (However, there were no assets in the Sam Cross estate.) Maggie Cross appealed to the Kansas City Court of Appeals, which after opinion reversing and remanding with directions, transferred the case here as involviqg a question of great public importance.
The principal question for decision is whether a personal judgment can be entered against Maggie Cross under the facts of this case; also involved is the matter of following trust funds through an estate in entirety to the property held by the surviving spouse. The part of the petition, showing plaintiffs’ theory of recovery, and the material parts of the decree are set out in the opinion of the Court of Appeals.
(Cross v. Cross,
The trust fund was created by the will of Clay Cross, a brother of Sam Cross, and was to go at the death of Sam Cross to another brother, plaintiff Marvin Cross during his lifetime; and at the death of Marvin Cross it was to go absolutely to the other brothers and sisters of the testator. They or their descendants are the other parties hereto. Sam Gross received the fund in 1925 while a resident of California. He came back to Missouri in 1945 and bought a residence in Clark, taking title in entirety. Maggie Cross did not testify but in answer to interrogations put in evidence by plaintiffs, said that she had
no recollection
of her husband ever receiving the trust fund. However, there ivas evidence that Maggie acknowledged knowing about the trust fund; and said to Mrs. Marvin Cross, in 1945, that it had helped them but that “she didn’t think we ought to have to pay it”; and that she. also said to a niece in 1948 : “I have a year to pay it in and I want you all to know I’m going to pay it. ’ ’ It was shown that Sam also received $5233.63 as his own property, in 1937, from the estate of another brother, J. T. Cross. Maggie said in the interrogatories that Sam owned 65 acres near Clark at the time they were married in 1897 and sold this land in 1945 for $2900.00, of which all but $1050.00 was paid to him, which balance was collected by Maggie, after his death. The note on which this balance was paid was payable to them jointly. At his death, other property in their names jointly .included a house in California worth $3000.00 (which she later sold), government bonds in the. amount of $2325.00 (purchased between 1942 and 1945) and $1000.00 in a bank account, out of which Sam’s funeral expenses were paid. In the interrogatories, Maggie Cross also said that at one time in California, they used $1500.00 paying hospital
The trial court found (and the evidence supports this finding) that Sam Cross commingled the trust fund with his own property; that Maggie had no separate property going into this commingled property; and that the whole was eventually placed in their joint names so that at Sam’s death Maggie got the whole title. In this situation she was in the position of a donee of trust property, because all the property she received was the product of the commingled trust fund and Sam’s own property; except perhaps the proceeds of the sale of Sam’s 65 acres which will be discussed later. “It is a well-established nrle that when a trustee has received and commingled trust funds with his own funds, it is presumed, in the absence of a
contrary showing, that the trust funds are still there, and it will be considered that what was paid out of the commingled funds for other than trust purposes was paid out of the trustee’s-personal funds and not out of the trust money, and that all the rest remains as trust funds.” (Lolordo v. Lacy,
As donee of trust property, by thus receiving her title without consideration, Maggie does not hold the property free from the trust. (Restatement of Trusts, Sec. 289; Scott on Trusts, Sec. 289.) “A pei-son to whose hands a trust fund comes by conveyance from the original trustee is chargeable as a trustee in his turn, if he takes it without consideration, whether he has notice of the trust or not.” (Scott, Sec. 289, quoting Justice Holmes in Otis v. Otis,
While it is true (as the Court of Appeals said) it was not shown that, during.Sam’s lifetime, Maggie “had received the fund and had commingled it with her property or with property belonging to her and Sam”; it was likewise trxxe (as the Court of Appeals also said) “that she. knew her husband had received the fund; knew that it was a t.rxxst fund; and knew that he had hot accounted for it.” (
Thus plaintiffs were entitled to a personal judgment against Maggie and were entitled to an equitable lien upon the property she received from Sam and had not disposed of at the time of the suit (as listed in the interrogatories) or upon the proceeds of such property if she had disposed of any of it. (Restatement of Trusts, Sec. 291, comment n; Scott on Trusts, Sec. 291.4; Crawford v. Jones,
The judgment is reversed and the cause remanded with directions to enter a decree in accord with the rulings herein made.