38 HARVARD LAW REVIEW.
law, denying the cestui que trust any priority. In none of tbem is there any discussion of the question, and the decisions are based on the wording of the Bankrupt Act very largely. " A proper con- struction of this clause [exempting trust property from assignment on the trustee's bankruptcy] of the Bankrupt Act will only apply it to property still held in specie and which can be distinguished from other property of the bankrupt, or where the proceeds con- stitute a separate and distinct fund, — not to cases where they have become mingled with the general assets of the bankrupt, even by his wrongful act." ^
It is frequently of the utmost importance how far the burden is placed on the cestui que trust to make out that his property actu- ally forms a part of the whole estate on which he is endeavoring to obtain a lien, that is, how much he must prove to make out ^ prima facie case. If he had to show not only that his property had been mingled with the trustee's, but also that in the payments made from the combined property the money in fact used was not de- rived from the trust, he could seldom make out his case. It has been held, therefore, that the wrongful commingling of the pro- perty being shown, it is incumbent on the trustee to show what property is his,* and it follows that in the case supposed the cestui que trust need not show that payments made indiscriminately from the mixed funds were not made with his money, but the trustee must show that they were if he wishes to disprove the claim of the cestui que trust to an equitable charge ; and the assignee in bank- ruptcy or creditors of the trustee can have no greater right than the trustee himself.
A distinction, however, should be observed which has not always been noticed by the courts.' It is not enough that the trust money should have been used to the benefit of the private estate. Unless the court is of opinion that the trust fund forms part of the estate under consideration, the cestui que trust can have no other standing than that of an ordinary creditor. If, for instance, the trustee pays his private debts with the money of the cestui que trust, it cannot give a lien on the trustee's estate. To allow this would be injustice to the simple creditors, as may easily be seen by taking a concrete example. A is trustee of $10,000 for B.
1 In re C. & T. B. ManuTg Co., I2 N. B. R. 203.
2 I Perry on Trusts, § 128.
- McCoil V. Fraser, 40 Hun, iii ; McLeod v. Evans, 66 Wis. 401.
