Snorgrass v. Moore

Ellison, J.

The firm of Hannawalt & Company, •composed of Frank Hannawalt and H. Gr. Weise, owned .and ’operated a mill in Tipton, Missouri. Weise died, and, after his death, Hannawalt continued to run the mill. He made a contract with the plaintiff, by which the plaintiff agreed to furnish him wheat, to be ground in said mill, and for which he was to pay the plaintiff, out of the proceeds of the flour ground by Hannawalt in the mill. He had been carrying on business in this way for quite a while, getting wheat from plaintiff, grinding it, selling the flour, and paying plaintiff out of *237 the proceeds. Several months after the death of Welse, defendant Moore was appointed his administrator. He also gave bond, and took charge of the partnership estate. When he took into his possession the property of the firm of Hannawalt & Company,, he also took the accounts due for flour, made by Hannawalt out of wheat bought by him after the death of Weise. He collected from these accounts, and had in his hands at the time-of the trial, at least five hundred dollars, derived from that source. ■ When the defendant took these accounts, there was a balance due the plaintiff for wheat, furnished after Weise’s death, and which, under the agreement between plaintiff and Hannawalt, was to be paid for out of the funds so collected and held by defendant. Hannawalt, Weise’s estate, and the partnership estate are all insolvent. Plaintiff brought this suit, setting up, substantially, the foregoing facts, asking that the defendant be required to account for the funds that he had collected, and that were still in his hands, which arose from transactions subsequent to Weise’s death, and that the court, by its decree, enforce the payment of plaintiff’s claim out of the fund pledged to its payment as aforesaid. The petition likewise claimed defendant should account for corn and other articles and claimed a balance of $426.15 due plaintiff.

The defendant answered, denying all of the material allegations of the petition, and setting up as an estoppel that plaintiff had presented his account as a claim against the partnership estate, which the probate-court disallowed, and pleading that judgment as an adjudication of the matters involved in this suit.

The evidence tended to sustain the allegations of the petition. The defendant proved that the plaintiff presented his claim for allowance against the partnership estate. The claim was continued at the first term of the probate court, and at the next term, the defendant contested it, and it was disallowed. There was other evidence offered as to the assets of the estate, claim® against it, etc.

*238 The court found the facts to be as stated in the petition ; took an account of the money which defendant had taiken possession of that formed no part of the partnership estate, required the defendant to bring into •court to satisfy plaintiff’s demand $426.15 of the money he had collected and mingled with the partnership funds, and, in default of his doing so at the time fixed, entered a judgment against him for the amount.

I. It is objected that, as a claim consisting of the same matter involved in this suit was presented to the probate court against the partnership estate of Hannawalt & Company, and was there disallowed, that it became res adjudícala, and in consequence this action, though in different form, must fail. The only question determined in the probate court was that the claim as presented against the partnership estate was not a partnership demand. The merits of the claim itself were not inquired into before that court. In such case the matter is not res adjudicata. Bell v. Hoagland, 15 Mo. 260 ; Hickerson v. City, 58 Mo. 61 ; Spradling v. Conway, 51 Mo. 51 .

The judgment of the probate court was introduced to sustain the plea of res adjudícala. It recites that “after hearing the evidence and the argument of the counsel, and all and singular the facts being seen and fully understood by the court, it is adjudged by the court that said demand and account be disallowed, and the said plaintiff take nothing by this cause of action,” etc.

Conceding that the presentation of the account, and the judgment disallowing it, is evidence that the merits were investigated, yet it is but prima-facie, and parol evidence is admissible to show that in point of fact such was not the case. Hickerson v. City, supra. It was shown by parol testimony in this case that plaintiff’s account was disallowed for the reason simply, that it was not a partnership demand.

II. I do not regard this case as an effort to establish a claim against the estate as a qireferred creditor or *239 otherwise. It is not to establish a demand against an estate at all. It is simply to get hold of property, or, more properly speaking, of securing a fund found to be in the hands of the administrator, which does not belong to the estate. The substance of the charge is that the administrator has wrongfully taken possession of a fund which does not belong to the estate, and in which he has no right, and upon which he has no claim, but which belongs to plaintiff. This presents two questions, first, whether it be true that the money does not belong to the estate, and second, can plaintiff follow it and subject it to his claim in this action. I have no doubt as to either question. This matter all occurred after the death of Weise, and of course after the dissolution of the partnership. The wheat was furnished and the contract was made after the dissolution. The contract was not, and could not have been, made in behalf of the partnership estate, nor did its fruits pertain to, or belong to the estate. Weise v. Moore, 22 Mo. App. 330 .

Notwithstanding the fund has been improperly intermingled with the partnership estate, I do not think this can balk a court of equity in following and utilizing it for the purpose for which it was created. The fact of its consisting of money, and that such money may have been mixed with moneys belonging to the estate will not prevent its sequestration. It was once the prevailing equity doctrine that money intermixed with other moneys into an indistinguishable sum could not be laid hold of by the court, from the fact of its not having an ear mark whereby it might be separated. Such a rule was announced as late as the case of Mills v. Potts, 76 Mo. 426 , but which case has since been overruled in Harrison v. Smith, 83 Mo. 210 . In the latter case and in Bank v. Insurance Co., 104 U. S. 54 , the question is quite fully examined and the conclusion is stated to be “that as long as trust property can be traced and followed, the property into which it has been converted remains subject to the trust, and if a man mixes trust *240 funds with his own money the whole will be treated as trust property except so far as he may be able to distinguish what is Ms.” The italics are my own. The idea I gather from these cases is, that if there be difficulty or impossibility in distinguishing or separating the money or funds, the misfortune is thrown on the party who has wrongfully mingled the property. If there is no means of separation, the beneficiary of the fund will take from the entire mass till he has satisfaction.

In 1 Story’s Equity, section 553, it is stated that the fund may be impressed “so long as it can be followed and distinguished from all other money, not regarding the individual coins or pieces of money, but so long as it can be followed as a separate and independent fund or value distinguishable from all other funds.” In Bank v. King, 57 Pa. St. 202, Judge Strong very forcibly says on this subject: “But it is insisted that there was no ear-mark to the money. What of that, if the money can be followed, or if it can be traced into a substitute ? This is often done through the aid of an ear-mark. But that is only an index enabling a beneficial owner to follow the property.” And he adds that “in regard to money, substantial identity is not oneness of pieces of coin or of bank bills.”

An able law-writer has contributed two very able and instructive articles on this question which are to be found in 5 Central Law Journal, 51, 75, in which the cases are reviewed at length, and the following, among other rules, are stated by him to be the result of his research: “1. It is not necessary to identify particular pieces of money in order to follow a trust fund; it suffices to identify it as a separate and independent fund or value. 2. The fruit or product of the trust fund, into whatsoever character of goods, estate, or property it may have been transmuted, is still impressed with the trust. 4. Confusion of the trust estate with the trustee’s own property does not prevent the taking of the former out of the mass into which it has been traced.” *241 The considerations foregoing lead me to conclude that the court committed no error in laying hold of the fund found to be in the administrator’s hands in this case.

I1Í. There was an error, however, in decreeing that plaintiff is entitled to anything on account of salt, harness, glass, oats,, and corn, these items aggregating $100.70. There is no evidence that there was anything other than wheat included in the contract between plaintiff and Hannawalt. The result is that we will affirm the judgment, if plaintiff will, within fifteen days, file a remittitur for $100.70, with six per cent, interest from the day of the decree in the trial court; otherwise it will be reversed and remanded.

On account of this error, which defendants have had to come here to correct, the costs . of appeal are adjudged against plaintiff.

All concur.