Sec 726

A trustee, so far as concerns funds flowing into his hands in his fiduciary capacity, is not liable in this form of action to the cestui que trust, until account stated, or until a sum is specifically set apart by him as due the latter in an action for money had and received. The procedure must be in equity. "No action at law for money had and received, can be maintained against him, though he has money in his hands which, under the terms of the trust, he ought to pay over to the cestui que trust, but which he still holds in the character of trustee only."1 It is otherwise as to balances conceded to be due. - " If the trustee by appropriating a sum as payable to the cestui que trust or otherwise, admits that he holds it to be paid to the cestui que trust and for his use, the character of the relation between the parties is changed, and the trustee does not hold it as a trustee, properly so called, but as a receiver, for the other party, who may maintain an action at law for money had and received."2 - The fact that a trust is so constructed as to involve in its execution acts contravening a statute does not relieve the trustee from his liability to pay over an admitted balance when demanded by the cestui que trust.3 - A trustee who mingles trust-money with his own funds, is liable for interest,4 and is liable for compound interest in case of any negligence, or in case of his using the money in business.5 If he fail to distinguish between his funds and his principal's, in a common mass, the aggregate will be charged to him as his principal's.6

Trustee who admits balance due cestui que trust is thus liable.

1 Per cur. in Edwards V. Lowndes, 1 E. & B. 89; adopted in Leake, 2d ed. 116; Pardoe V. Price, 16 M. & W. 451; Hexter V. Loughry, 6 Ill. App. 362.

2 Per cur. in Edwards V. Lowndes, 1 E. & B. 891; Remon V. Hayward, 2 A. & E. 666; see Boynton V. Dyer, 18 Pick. 6; Jenkins V. Walter, 8 Gill & J. 218.

3 Supra, sec 335, 341, 343, 352; Sheppard V. Oxenford, 1 K. & J. 491; Worthington V. Curtis, L. R. 1 C. D. 419.

4 Wh. on Ag. sec 243, 788; Barney V. Saunders, 16 How. U. S. 535; Green V. Winter, 1 Johns. Ch. 26; Jacot V. Emmett, 11 Paige, 142; Dyott's Est., 2 Watts & S. 565; Graver's App., 50 Penn. St. 189; Jenkins V. Walter, 8 Gill & J. 218.

5 Boynton V. Dyer, 18 Pick. 1; Evertson V. Tappan, 5 Johns. Ch. 497; Luken's App., 7 W. & S. 48; Rowan V. Kirkpatrick, 14 Ill. 1; see Norris's App., 71 Penn. St. 106.

6 Wh. on Agency, sec 203.

Sec 727

Distributive interests in an estate cannot ordinarily be sued for, when in the hands of an executor, as money had and received. The proceeding must be in the probate or other court having jurisdiction.1 But when an executor admits that he holds a specific fund to the use of a particular legatee, then he can be sued for such fund in an action for money had and received.2 And such, also, is the rule as to distributive shares admitted to be due.3 He is, also, thus liable for money lent to him, or had and received by him as executor.4