80 Iowa 497 | Iowa | 1890
— The plaintiff is an independent district, duly organized for school purposes under the laws of Iowa. For some years preceding the commencement of this action one M. W. Wilson was the treasurer of plaintiff, and as such received considerable sums of money, which he deposited from time to time in a bank owned by Phineas and William O. Cadwell. On the ninth day of October, 1888, the Oadwells, being insolvent, made to defendant a general assignment for the benefit of their creditors. The defendant qualified as assignee, and entered upon the discharge of the
I. The principal question presented for our determination is whether the money deposited by Wilson was so impressed with the character of a trust fund that it can be followed, and the trust enforced against the estate of the Cadwells in the hands of their assignee, to the prejudice of their general creditors. It does not appear that any of the identical money deposited went into the possession of defendant. On the contrary, the admitted facts justify the conclusion that he received but little, if any, of it; and, if a trust for the amount in question is established, it must be on the ground that the deposits must be held to have increased the estate of the insolvents, and that the balance due is represented by an increase now in the hands of the assignee. The treasurer of a school district is not authorized by law to deposit the school money in bank.
When Wilson made the deposits in question, he had no title to the money, excepting that acquired by virtue of his office as treasurer, and no right to part with that title by making a general deposit. The Cad-wells were fully advised as to the material facts, and therefore could acquire no title to the deposit adverse to the plaintiff. As to them, the money deposited constituted a trust fund, which they had no right to convert to their own use, and the fact that they mingled it with other money, so that the identity of that deposited was lost, would not destroy the trust character of the deposits, nor prevent the enforcement of the trust against property to which they had contributed. To hold otherwise would be to ratify a wilful' violation of
Much of what was said in Davenport Plow Co. v. Lamp, post, p. 722, is applicable to this case. It is claimed, in effect, that the conclusions we now announce are in- conflict with the doctrines expressed in Long v. Emsley, 57 Iowa, 12, and Lowry v. Polk County, 51 Iowa, 50. In the case cited, the question involved was the liability of the county treasurer for money which came into his hands by virtue of his office, and which was lost by reason of the failure of the bank in which he had deposited it. This court held that the depositing of the funds was in violation of law, and, in effect, a conversion of them, and that the treasurer was liable for their loss. The right of the cestui que trust to follow the funds, and have a trust therefor established and enforced, was not involved in the case.
In Long v. Emsley, a township clerk had deposited money of the township in a bank in his individual name, without disclosing the fact that it was money he had received by virtue of his office. The bankers were garnished, and proceedings were had which resulted in a judgment against the bankers as garnishees for the
Affirmed.