LAW.coLAW.co

McCook vs. Harp

Supreme Court of Georgia1888-06-01
81 Ga. 229

Summary

Holding. The court affirmed the judgment holding the trustee liable for the value of the commingled Confederate money, but modified the decree to exclude interest accruing before the life tenant's death and to disallow the trustee's claimed allowance for taxes.

A trustee received Confederate currency as part of a trust estate but commingled it with personal funds and used it for personal expenses rather than maintaining it separately or reinvesting it. When the war ended, the trustee attempted to satisfy the trust obligation by producing Confederate money then on hand, claiming it represented the trust fund. The court rejected this approach, holding that a trustee who mingles trust assets with personal property and spends them cannot later discharge the trust by producing similar assets and claiming they represent the original trust property.

The court affirmed the judgment against the trustee but modified the decree on two grounds. First, the trial court improperly included interest that accrued before the life tenant's death in May 1882; such interest belonged to the life tenant, not the remaindermen. Second, the court disallowed the trustee's claim for tax payments, since taxes on the trust corpus were the life tenant's responsibility, and the trustee's position that the fund was entirely lost was inconsistent with seeking tax reimbursement.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Liability of trustee for commingled trust assets spent for personal use
  • Whether trustee can satisfy trust obligation by producing similar assets claimed to represent the original trust property
  • Proper treatment of interest and taxes in trust accounting after commingling and loss of principal

Procedural posture

The decree of the trial court was appealed, and the appellate court affirmed the judgment with modifications to the trial court's decree.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Bleckley, Chief Justice.

We discover no error committed by the court in shaping questions and submitting them to the jury. There was no infringement upon any doctrine of sound practice enunciated in Coleman vs. Slade, 75 Ga. 61; Ruffin vs. Paris, Id. 653; The Mayor vs. Harris, Id. 761, or Creech vs. Richards, 76 Ga. 36, It seems to ns also, that the range of the questions was wide enough to comprehend all the essential elements of the case. If, however, counsel for the defendant below had thought otherwise, it was his province to suggest to the court in due time such appropriate questions as he conceived were by the court omitted. It is not a commendable practice to come forward on a motion for a new trial with a list of questions which ought to have boon suggested when the trial was in progress, or at the conclusion of the judge’s charge to the jury.

The controlling question in the case is, as to the liability of the trustee for the value of the confederate money received by him, though the money may have been lost by the results of the war. For the doctrine that a trustee could receive and use Confederate money as prudent persons dealt with their own, we are referred to Campbell vs. Miller, 38 Ga. 304; Miller vs. Gould, Id. 465; Westbrook vs. Davis, 48 Ga. 473; Saxon vs. Sheppard, 54 Ga. 286; Nelms vs. Summers, Id. 605; and we have examined also Venable vs. Cody, 68 Ga. 171. The doctrine of these cases we recognize as sound and correct, but they are no authority for relieving a trustee who has mixed trust money with his own and used the same as his own. The case of McWhorter vs. Tarpley, 54 Ga. 291, furnishes the correct rule on this subject. The court below comprehended the spirit of that case and administered it properly to the circumstances of the present ease. The trustee, by making the Confederate money received by him his own, and not keeping it or loaning it in a way to identify that money or its proceeds, cannot discharge himself by producing a sufficient amount of Confederate money which he may have happened to have had on hand at the conclusion of the war, and may have been ■ pleased then to consider as representing the trust fund. Eor aught that appears, the identical Confederate money belonging to the trust may have been expended by the trustee for paying the expenses of himself and family, or for any other object, and not one cent of the same may have gone to produce the Confederate money which he happened to have when the war closed.

If the jury committed any error, it was in stating the amount received April 5, 1862 as $84.77, instead of $284.77, and in finding that $300 was received July 20th, 1864; but the result was in favor of the trustee and not against him; for the value of the $300 was only $15, whereas the value of the $200 omitted would be $150. This result is not complained of by the other party, and certainly the trustee has no cause to complain of it.

The decree is excepted to, and-we think it is erroneous in allowing interest previous to the death of the tenant for life, which it seems took place May 10th, 1882. The interest accruing upon the fund up to that time was her property, not that of the remaindermen. We direct that the decree he modified so as to eliminate all interest accruing prior to May 10th, 1882.

"We direct also that no allowance be made to the trustee for the payment of taxes, inasmuch as the taxes were chargeable to the tenant for life. Austell vs. Swann, 74 Ga. 278. Had any taxes been paid on the corpus by the trustee since the death of the tenant for life, such payment would have been proper matter of allowance; but we do not understand that any such have been paid, his position being that the trust fund was wholly lost. To pay taxes as trustee would be inconsistent with this position.

Judgment affirmed, with direction to modify the decree.