279 Pa. 329 | Pa. | 1924
Opinion by
W. J. Donoughe Company and the decedent were lumber dealers, each doing a separate business. Donoughe Company paid for lumber purchased from decedent by its negotiable notes, delivered prior to his death. From a statement submitted and accepted by the court below, “It was understood between the parties these notes could not always be lifted at maturity, and renewals thereof would be arranged. Donoughe Company, prior to maturity of any note or notes which it was unable to pay, would forward new notes in amount sufficient to realize enough funds to take care of maturing obligations. These notes were to be discounted by Vosburgh, and the proceeds forwarded to Donoughe Company, so that when the original notes became due, Donoughe Company would have sufficient funds to pay the original notes in full. Accommodation paper was handled in the same manner. In pursuance of this arrangement, notes were from time to time executed and delivered to Vosburgh, discounted by him, and when he died the proceeds were
At Vosburgh’s death there were balances in his favor in the several banks discounting the notes given by Donoughe Company. Appellant makes claim to these credit balances, or parts thereof, because decedent was a trustee for claimant, depositing, in his own name, company funds secured from the discounted notes. The various items for preference through the several banks are stated in the accounting; they will not be repeated here. Claimant’s right to so participate was denied by the court because it found the relation of debtor and creditor existed between .the parties. In this the court erred.
The new notes were not given pro tanto as renewal of the old notes. Had they been, this question would not likely be here. Donoughe Company was obliged to pay both the old and the new notes when they became due. This it would not be compelled to do if these were renewal notes. They were given with the express understanding they were to be discounted, and the proceeds remitted to Donoughe Company.
These deposits were impressed with a trust, and, as there was sufficient funds in the banks in Vosburgh’s name, the property was identified, being easily traced through the banks’ records of the proceeds of the notes, and must be allowed as a preference in the audit.
The right to the funds exists not because of the character of the claim or as compensation for loss, but is founded on the right of property. The particular property into which the fund has been converted must be
A trust is a relation between two persons, by virtue of which one of them as trustee holds property for the benefit of the other. The term “trust” is a very broad and comprehensive one. Every deposit is a trust, except possibly general bank deposits; every person who receives money to be paid to another or to be applied to a particular purpose is a trustee, if so applied as well as when not so applied. “The cases of hirer and letter to hire, borrower and lender, pawner and pawnee, principal and agent, are all cases of express trust”: Warner v. McMullin, 131 Pa. 370, 382, citing Kane v. Bloodgood, 7 Johns. Ch. 90; Yorks’s App., 110 Pa. 69. There must be sufficient words to raise a trust, property to be subject to it, and a purpose to be accomplished.
Here we have all the essential elements of a trust; the claimant was able at the hearing to point out the particular places where the funds could be found. The identification was none the less complete because the trustee had mingled other moneys with these funds. If all the money is lost or dissipated there is no fund on which to impress the trust; if any is paid out by the trustee, the trust fund yet remains intact as long as
The decree of the court below is reversed, and the record is remitted with direction to reframe the distribution in accordance with the law as expressed in this opinion; costs to be paid from the estate.
