107 Va. 233 | Va. | 1907
delivered the opinion of the court.
The first assignment of error presents the question, whether or not, in the payment of the debts of John G. Watts, deceased, out of the assets in the hands of his personal representative, priority is accorded by law to the debt owing by the said decedent as guardian de son tort of the appellant, B. Bowen Watts, the assets being insufficient to discharge all of the debts.
Section 2660 of the Code provides that, where the assets of a decedent, in the hands of the personal representative, after the
It will be observed that the priority provided for by the fourth clause of section 2660 against the estates of guardians is limited by its language to guardians who qualify in this state. It is insisted, however, that the purpose of the Legislature in using that language, was to make a distinction between a guardian who qualified in this state and one who qualified in a foreign jurisdiction, and to give to the wards of the former class of guardians additional protection, and that it never could have been the intention of the Legislature to leave the wards of a de facto guardian in this state without a like protection.
Conceding that there is no reason why the wards of a guardian de son tort and of a guardian who qualified in this state, should not have the same right of priority in the distribution of their guardian’s estate, the question is, does the statute give them such right ?
In the case of Price, &c. v. Harrison, &c., 31 Gratt. 114, 117, which arose before the amendment to the statute now under consideration, giving priority to debts due from trustees to persons under disabilities, it was argued that such persons were within the spirit or equity of the statute and should have the priority accorded by it, although they were not within the
Applying these rules of construction to this case, it is clear, we think, that the statute does not embrace the wards of a guardian de son tort. The only guardian whose estate is subject to such priority is one who has qualified as such, and whose qualification was in this state. We are no more at liberty to disregard the requirement that he has been appointed guardian—for his qualification implies this—than we are to disregard the requirement that his qualification must be in this state.
It is insisted that the appellant, B. BoAven Watts, was entitled to have priority in the payment of his debt over the general creditors of the decedent’s estate, because “the funds or estate represented by the recovery never belonged to the decedent, and upon his death, did not constitute a part of his estate, but had, by his wrongful act, become mingled with his other property.”
The record, as we understand it, does not identify any part of the funds in the hands of the personal representative or under the control of the court, arising from the sale of the decedent’s lands, as the property of the appellant, which went into the hands of his guardian, nor is it shown that said funds
There are some cases cited by appellant’s counsel which hold that, in order to give a preference to the beneficiary of a trust estate, which has been dissipated by the person holding it in a fiduciary capacity, it is not necessary to trace the trust fund into some specific property, but it is sufficient if it can be traced into the estate of the defaulting fiduciary. The better doctrine, as it seems to us, and that sustained by the weight of authority, is that, in order to recover a trust fund which has been misapplied by the person holding it in a fiduciary capacity, it must he clearly identified or distinctly traced into the property, chose in action, or fund, which is to be made the subject out of which the trust fund is to be replaced. See Nat’l Bk. v. Life Ins. Co., 104 U. S. 54, 26 L. Ed. 693, and cases cited; 3 Pom. Eq. Jur. (3rd. Ed.) secs. 1047, 1048, note “f,” and cases cited, and secs. 1079, 1080; Holmes v. Gilman, 138 N. Y. 369, 34 N. E. 205, 34 Am. St. Rep., 463, 20 L. R. A. 566; Wetherell v. O’Brien, 140 Ill. 146, 29 N. E. 904, 33 Am. St. Rep. 221.
The next question to be considered is whether or not the trial court erred in holding that the attorneys of John Gr. Watts had an attorney’s lien on certain drafts payable to the order of said Watts, in their hands at the time of his death.
A short time before the death of Mr. Watts, he deposited in a bank in Tazewell county several thousand dollars, the proceeds of the sales of lands 'or interest in lands owned by him, lying in the state of West Virginia. After making the deposit, he consulted with two firms of attorneys, who had been his counsel for some time, as to the best method of preventing the money deposited in bank from becoming involved in a suit with his wife and her sons by a former marriage and tied up, as his other propeily then was, in order that the fund in bank might bo under his personal control, to be applied by him to the payment of such of his debts as he thought proper. “They ad
The right of the attorneys to a lien on the drafts in their hands for their fees or any part thereof, is denied by the appellant, upon the ground, first, that the advice given the decedent was to enable him to conceal his property from his creditors, which was not such advice as they had the right to give, and the drafts were, therefore, not placed in their hands in the course of professional employment; and, second, that the deposit of the drafts with them was made for a specific purpose, which is inconsistent with the claim of a lien.
In the view we 'take of this assignment of error, it is unnecsary to consider the question whether or not the drafts came into the hands of the attorneys in the course of their professional employment, for, if it were conceded that the drafts were
The object of placing the drafts in the hands of the attorneys, as stated by them in their original and amended answers, was to enable the client at any time to realize the money on the drafts and apply it to the payment of such debts as he thought best. The action of the client in depositing the drafts with his attorneys, as they had advised, for that express purpose, is inconsistent with the claim of lien now asserted by his attorneys. Their debt might not be, and most probably was not, one of the debts which he intended to pay out of the money deposited in bank. If it had been, he would very likely have given his attorneys a check in payment of their debt and obtained drafts for the residue only. If their debt was not one of the debts which he, in his then financial condition, thought it “best” to pay out of the proceeds of the drafts, he would be compelled to submit to the demand of his attorneys or have the whole purpose for which he deposited the drafts in accordance with their advice thwarted.
That an attorney has no lien upon property placed in his hands for a special purpose, which is inconsistent with or adverse to the claim of a lien, see Anderson v. Bosworth, 15 R. I. 443, 8 Atl. 339, 2 Am. St. Rep. 910; Weeks on Attorneys, sec. 371; 4 Cyc. 1016; Ex parte Pemberton, 18 Vesey 281; Walker v. Birck, 6 Term. Rep. 258, 262.
The remaining assignment of error is to the action of the court in sustaining the exception of IT. Rewberry to the reports of Commissioner Chapman, and holding that the proceeds arising from the sale of the one-tenth interest in the Rye Cove tract of land should be paid to II. Rewberry.
One of the exceptions to Commissioner Chapman’s report is that it purported to furnish documentary and other evidence, to be considered by the court in passing upon the question, upon which he asked the court’s instructions.
The report made in the case, ascertaining the liens and their priorities, and which was confirmed by the court, finds that John G. Watts conveyed certain property in trust to secure the payment of the debt asserted by Hewberry. Among the property so conveyed was “'one undivided fifth of that certain tract of land containing 2,325 acres, lying in Tazewell county, known as the Hye Cove land, and being the same land purchased by John G. Watts and others from W. A. Trench and H. W. Straley.” The one-tenth undivided interest in the same tract of land, and upon the proceeds of which Hewberry claims to have a lien by virtue of the said deed of trust, was not owned by Watts when the deed of trust was executed. That one-tenth interest was one-half of the undivided interest of William Malone in the Hye Cove tract of land, and was purchased by Watts subsequently to the execution of the deed of trust at a judicial sale made in the cause of Straley and others v. New-berry and others.
While the undivided one-fifth interest purchased by Watts
We are of opinion that the decree complained of should be affirmed, except in so far as it holds that the decedent’s attorneys had a lien on the drafts in their hands for the payment of their fees; and in so far as it holds that H. Newberry was entitled to the proceeds of the sale of the decedent’s one-tenth interest in the Nye Cove tract of land, it should be reversed. As to those claims, the decree must be reversed and set aside.
Reversed in part.