Smith v. Fuller

Citations

• 86 Ohio St. (N.S.) 57

Syllabus

<p>Dtides of trustees in settling affairs — Of insolvent savings company— Trustee no power to loan trust funds — Deposit in bank by trustee of trust funds — Taking certificate of déposit therefor — Presumed deposit was special and not general — Court of equity may engraft trust upon such deposit, when — Trustee regarded as preferred creditor.</p> <p>1. It is the duty of a trustee appointed to wind up and settle the affairs of an insolvent savings company to protect the trust property in every reasonable way; to get possession of the assets, reduce them to money, and under the direction • of the court appointing him, after the payment of expenses, apply the funds to the satisfaction of the claims of creditors of the insolvent company.</p> <p>2. Such trustee has not, in the absence of a proper order of court, the right or power to loan the funds of the trust coming into his hands as such trustee.</p> <p>3. A general deposit by such trustee of the trust funds in a bank is in legal effect a loan to the bank, and unless authorized by the court, is a violation of duty by the trustee.</p> <p>4. Where a trustee deposits trust money in a bank, taking as evidence thereof a certificate of deposit certifying that he as trustee has deposited the fund payable to self on return of the certificate properly indorsed, the same not' being subject to check, and no stipulation for interest made, a presumption will be indulged, in the absence of proof to the contrary, that the trustee intended to perform and not violate his duty, and that the deposit was intended as a special, and not a general, deposit.</p> <p>5. Where, in such case, the bank fails and makes an assignment for the benefit of creditors before such fund is withdrawn, and it appears that the bank, upon receiving such deposit, had mingled the trust money with its own funds, money paid out from such fund for its own purposes will be presumed to have been paid from its own money, and not from the trust fund. And if it be shown