Wingate v. Pool

Walker, J. It is a familiar rule, that profits arising from the use of a trust fund, or in the discharge of claims against a trust fund, by the trustee, inure to the benefit of the cestui que trust. The plaintiff in error, as administrator, occupied the relation of trustee to the estate, its creditors, and distributees. As such, it was his duty to act for the best interest of the fund in his hands, and to discharge the claim of the bank with the smallest amount that was necessary. As the claim could be paid with bank paper, which was at a discount, it was his duty to avail himself of that advantage, by the use of the funds of the estate. And he had the right to charge for all necessary and reasonable outlays and expenditures in procuring such funds. If he, in doing so, used his own means, they should be allowed him, in his account against the estate, with interest. And he had the right to be allowed for necessary traveling expenses, and for his time in procuring such funds. And all the remaining profits on such a purchase become in his hands general assets, to meet debts against the estate, and for distribution. He has no right to speculate upon or with the trust fund. He has no claim to such profits, and he cannot appropriate them to his individual use. When such profits were made by the administrator, and became assets in his hands, they were liable to distribution, precisely as any other funds of the estate. They could only be appropriated to the payment of claims allowed against the estate, and in the order and in the mode prescribed by the statute; or if anything remained after paying the debts, be distributed in the same manner as if the surplus had been derived from any other source. When assets are thus acquired, they are not distinguishable from other general funds of the estate, and are subject to the same legal and equitable rules, in their appropriation. The question is then presented, whether the defendant in error has shown himself entitled, either in law or equity, to any portion of this fund. The bill fails to allege, and the proof to show, that he has ever presented his claim, and had it allowed against the estate. And it does appear that more than two years had expired since the grant of letters of administration, and before the exhibition of his bill. This being the case, his claim is barred, by the 115th section of the statute of wills, (Scates’ Comp. 1206), from a pro rata participation with the other creditors in the general assets of the estate. To have entitled himself to that benefit, he should have filed, and had his claim allowed within the limited period. Nor can he have any benefit of subsequently discovered assets, after filing the inventory and sale bill, as his claim has never been exhibited and allowed. And even if this fund was of this latter character of assets, which does not appear from the evidence, defendant in error can have no claim to any portion of this fund. Equity follows the law, and when this claim became barred by the statute, a court of equity could not afford relief any more than could a court of law. The claim is as effectually barred in the one court as in the other. The defendant in error, having failed to show by the allegations in his bill, or by the proofs in the case, that he is entitled to any relief, the decree of the court below must be reversed, and the bill dismissed. Decree reversed.