RANDALL, C. J.,
delivered the opinion of the Court..
I. The first question deemed necessary to be ■ disposed of is one raised by the answers of Allen & Farrar, in which they insist that that the plaintiff in advancing money to them in the common course of mercantile business in discounting their drafts, violated its charter and exdéeded its powers - unlawfully carrying on the business of banking with the funds of depositors held by it in trust for other purposes specified in its charter, and therefore that the plaintiff has no right of action. This action is brought to recover money so advanced.
Were this a new question here Ave might deem it proper to enter into some discussion of the principles involved. Put this court has long since disposed of it, and we'are entirely satisfied with the law as it has been thus settled. By the charter undér which the plaintiff exists, it is authorized to receive-deposits and hold them in trust for depositors and invest them in bonds and. securities of the United States, bearing-interest. The corporation is thus by its charter a trustee of all the funds deposited, and the moneys deposited are “ trust funds.” There is nothing in. the charter which declares any other transaction, not expressly authorized, .or any other security taken for such moneys loaned or advanced, to be void. The courts generally hold that however such a corporation may, by unauthorized, transactions, violate the law under which it exists, and thus subject itself to be proceeded against as for a forfeiture of its franchises, if does not lie Avith one who has thus obtained its funds and impaired the security of depositors and the public to consummate a fraud against them by such a plea. Southern Life Insurance & Trust Co. vs. Lanier, 5 Fla., 110, 164, and cases cited; Utica Ins. Co. vs. Scott, 19 John. R. 6; Munt vs. Stokes, 4 T. R., 561, per Lord Kenyon and Buller, J.; Parker vs. Rochester, 4 Johns. Ch. R., 332: Robinson vs. Bland, 4 Burr, 1077; Angell & Ames on Corp., 242.
[429]*429Selden, J., in Bissell vs. The Mich. So. and N. Ind. Railroad Co., 22 N. Y., (Court of Appeals,) while holding to the fullest extent that contracts by corporations, which are unauthorized and entirely beyond the powers of corporations, in view of the limitations contained in their charters, are void and will not therefore be enforced, yet holds this language, (p. 305): “ It has been repeatedly held by this court, that where corporations by means of contracts or engagements prohibited by law, i. e., which are unauthorized by their charters, have obtained from other persons any money or other thing of value, while the contract itself is void' and can never be enforced, the corporation may nevertheless be compelled, in a suit brought in disaffirmance of the contract and founded upon the equities of the case, to restore what it has obtained.”
Under this rule, the plaintiff’s action in the case at bar may be sustained against Allen & Farrar, as the amended complaint does not claim judgment upon the drafts, but for money had and received irrespective of them. -
II. The plaintiff insists that it was entitled to the provisional remedies employed, viz: the aid of an injunction and a receiver to reach the property of the defendants, Allen & Farrar, in which the “ trust funds” were supposed to be involved or invested.
The doctrine that trust funds will be followed into whatever property or into whosesover hands they may be traced, for the. protection of the eestid que trust against fraudulent transactions, and the like, is guarded with extreme jealousy and vigilance by courts of law and equity everywhere, and we would gladly apply the rule to the present case if it were practicable to do so.
In this instance the Freedman’s Savings, and Trust Company, plaintiff, by its cashier and agent, advanced to Allen & Farrar, a firm engaged in the business of buying logs, sawing timber and lumber for market, and selling, shipping and consigning it in- the ordinary course, a large sum of money [430]*430belonging to the customers of the Trust Company, upon certain bills and drafts drawn by them upon their house in Boston, Mass., which drafts were not paid. Allen & Earrar owned the mill where lumber was manufactured in this State. The money was used in the purchase of logs, the hire of labor and other expenses of the firm in conducting their business, in the payment of debts incurred in conducting it, and in repairs of their mill, &c. The money was obtained from the plaintiff in the -same manner as it might have been obtained from bankers, viz: by the discounting of defendants’ drafts, without stipulation as to the manner in which the money should be expended by them. It does not appear that the defendants, Allen & Parrar, had any other connection or relations with the plaintiff except as a boi’rower for business purposes. The character of their business was known to the agents of the plaintiff". The identity of the money loaned was lost as soon as it was placed with other moneys and used by defendants in their business, and it ceased to be “ trust funds,” and became the property of the firm.
Where a party purchases trust property, knowing it to bo such, from the trustee in violation of the objects of the trust, courts of equity will force the trust upon the purchaser and hold the property subject to it in the same manner as the trustee held it. And “ wherever the property of a party has been wrongfully misapplied, or a trust fund has been . wrongfully converted into another species of property, if its identity can be traced, it will be held in its new form liable to the rights of the original owner, or eestui que trust.” u It matters not in the slightest degree into whatever other form different from the original the change may have been made, whether it be that of promissory notes, or of goods, or of stock ; for the product of a substitute for the original thing still follows the nature of the thing itself so long as it can be ascertained to be such. The right ceases onl/y when the means of ascertainment fcdl, which, of course, is the case [431]*431when the subject-matter is turned into money and mixed and confounded in a general mass of property of the same description.” See Story’s Eq. Jur., sections 1,257-8-9, and the English and American cases cited.
In the present case a great difficulty seems .to exist in the fact that nothwithstanding Allen & Earrar knew the character of the moneys in the possession of the plaintiff, yet it was practically impossible for the plaintiff to identify it the moment after it went in their possession, and it could not therefore be followed. It was not invested in any particular article or parcel of property, but used and dispersed in such manner, as we have seen, from the nature of their business, that “ the means of ascertainment failed ” on the instant. The money was obtained in 1871. In 1873, when this suit was commenced, it had clothed and fed a retinue of laborers at the mills and logging camps, and the lumber had gone to the several quarters of the globe. There was nothing left of the “ trust” funds. The authorities, cited by the plaintiff’s counsel, it seems to us, do not bear him out in his propositions. The effort is to establish a lien upon the mill property itself, and upon its earnings, because of the character of the funds loaned, and by reason of the agreement between the parties and other creditors soon after the protest of the drafts. “It was agreed that Allen &
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RANDALL, C. J.,
delivered the opinion of the Court..
I. The first question deemed necessary to be ■ disposed of is one raised by the answers of Allen & Farrar, in which they insist that that the plaintiff in advancing money to them in the common course of mercantile business in discounting their drafts, violated its charter and exdéeded its powers - unlawfully carrying on the business of banking with the funds of depositors held by it in trust for other purposes specified in its charter, and therefore that the plaintiff has no right of action. This action is brought to recover money so advanced.
Were this a new question here Ave might deem it proper to enter into some discussion of the principles involved. Put this court has long since disposed of it, and we'are entirely satisfied with the law as it has been thus settled. By the charter undér which the plaintiff exists, it is authorized to receive-deposits and hold them in trust for depositors and invest them in bonds and. securities of the United States, bearing-interest. The corporation is thus by its charter a trustee of all the funds deposited, and the moneys deposited are “ trust funds.” There is nothing in. the charter which declares any other transaction, not expressly authorized, .or any other security taken for such moneys loaned or advanced, to be void. The courts generally hold that however such a corporation may, by unauthorized, transactions, violate the law under which it exists, and thus subject itself to be proceeded against as for a forfeiture of its franchises, if does not lie Avith one who has thus obtained its funds and impaired the security of depositors and the public to consummate a fraud against them by such a plea. Southern Life Insurance & Trust Co. vs. Lanier, 5 Fla., 110, 164, and cases cited; Utica Ins. Co. vs. Scott, 19 John. R. 6; Munt vs. Stokes, 4 T. R., 561, per Lord Kenyon and Buller, J.; Parker vs. Rochester, 4 Johns. Ch. R., 332: Robinson vs. Bland, 4 Burr, 1077; Angell & Ames on Corp., 242.
[429]*429Selden, J., in Bissell vs. The Mich. So. and N. Ind. Railroad Co., 22 N. Y., (Court of Appeals,) while holding to the fullest extent that contracts by corporations, which are unauthorized and entirely beyond the powers of corporations, in view of the limitations contained in their charters, are void and will not therefore be enforced, yet holds this language, (p. 305): “ It has been repeatedly held by this court, that where corporations by means of contracts or engagements prohibited by law, i. e., which are unauthorized by their charters, have obtained from other persons any money or other thing of value, while the contract itself is void' and can never be enforced, the corporation may nevertheless be compelled, in a suit brought in disaffirmance of the contract and founded upon the equities of the case, to restore what it has obtained.”
Under this rule, the plaintiff’s action in the case at bar may be sustained against Allen & Farrar, as the amended complaint does not claim judgment upon the drafts, but for money had and received irrespective of them. -
II. The plaintiff insists that it was entitled to the provisional remedies employed, viz: the aid of an injunction and a receiver to reach the property of the defendants, Allen & Farrar, in which the “ trust funds” were supposed to be involved or invested.
The doctrine that trust funds will be followed into whatever property or into whosesover hands they may be traced, for the. protection of the eestid que trust against fraudulent transactions, and the like, is guarded with extreme jealousy and vigilance by courts of law and equity everywhere, and we would gladly apply the rule to the present case if it were practicable to do so.
In this instance the Freedman’s Savings, and Trust Company, plaintiff, by its cashier and agent, advanced to Allen & Farrar, a firm engaged in the business of buying logs, sawing timber and lumber for market, and selling, shipping and consigning it in- the ordinary course, a large sum of money [430]*430belonging to the customers of the Trust Company, upon certain bills and drafts drawn by them upon their house in Boston, Mass., which drafts were not paid. Allen & Earrar owned the mill where lumber was manufactured in this State. The money was used in the purchase of logs, the hire of labor and other expenses of the firm in conducting their business, in the payment of debts incurred in conducting it, and in repairs of their mill, &c. The money was obtained from the plaintiff in the -same manner as it might have been obtained from bankers, viz: by the discounting of defendants’ drafts, without stipulation as to the manner in which the money should be expended by them. It does not appear that the defendants, Allen & Parrar, had any other connection or relations with the plaintiff except as a boi’rower for business purposes. The character of their business was known to the agents of the plaintiff". The identity of the money loaned was lost as soon as it was placed with other moneys and used by defendants in their business, and it ceased to be “ trust funds,” and became the property of the firm.
Where a party purchases trust property, knowing it to bo such, from the trustee in violation of the objects of the trust, courts of equity will force the trust upon the purchaser and hold the property subject to it in the same manner as the trustee held it. And “ wherever the property of a party has been wrongfully misapplied, or a trust fund has been . wrongfully converted into another species of property, if its identity can be traced, it will be held in its new form liable to the rights of the original owner, or eestui que trust.” u It matters not in the slightest degree into whatever other form different from the original the change may have been made, whether it be that of promissory notes, or of goods, or of stock ; for the product of a substitute for the original thing still follows the nature of the thing itself so long as it can be ascertained to be such. The right ceases onl/y when the means of ascertainment fcdl, which, of course, is the case [431]*431when the subject-matter is turned into money and mixed and confounded in a general mass of property of the same description.” See Story’s Eq. Jur., sections 1,257-8-9, and the English and American cases cited.
In the present case a great difficulty seems .to exist in the fact that nothwithstanding Allen & Earrar knew the character of the moneys in the possession of the plaintiff, yet it was practically impossible for the plaintiff to identify it the moment after it went in their possession, and it could not therefore be followed. It was not invested in any particular article or parcel of property, but used and dispersed in such manner, as we have seen, from the nature of their business, that “ the means of ascertainment failed ” on the instant. The money was obtained in 1871. In 1873, when this suit was commenced, it had clothed and fed a retinue of laborers at the mills and logging camps, and the lumber had gone to the several quarters of the globe. There was nothing left of the “ trust” funds. The authorities, cited by the plaintiff’s counsel, it seems to us, do not bear him out in his propositions. The effort is to establish a lien upon the mill property itself, and upon its earnings, because of the character of the funds loaned, and by reason of the agreement between the parties and other creditors soon after the protest of the drafts. “It was agreed that Allen & Earrar should go on with their business, sell the lumber on hand amounting to nearly two millions of feet, and apply the proceeds to the satisfaction of plaintiff’s demands; to which Otis Allen agreed and consented to look to the future for his pay.” (This is the allegation of the plaintiff, and though' denied or qualified by the defendants, we will treat it as undisputed for the purpose of this case.) “ And relying upon this agreement for payment out of the proceeds of sales of lumber on hand, plaintiff forebore legal proceedings, and relied in good faith upon such agreement. And while plaintiff’s agent was reposing confidence in defendants and entertaining the hope [432]*432of early payment from the proceeds of the lumber, the defendants were practising treachery with consummate skill.”'
Now, we do not see how this statement of facts, taken in. connection with the loan, affords the basis of a lien of any kind upon the mill property. All the parties agreed to repose further confidence in Allen & Farrar, to give time and' rely upon their faithful application of the proceeds of the-lumber on hand to the payment, first of plaintiff’s claim, and then of other claims. Whatever grounds their conduct may have afforded for attaching their property in- a suit at law, it created no right in the plaintiff' to pursue the extraordinary remedies which were invoked.. There was no trust or lien created which might be enforced' as against the mill or its earnings in equity. The whole was a mere verbal arrangement, which seems to have been disregarded by all except the plaintiff.
Here is no specific lien as for purchase money, nor as for property consigned for a specific purpose, nor as between partners, nor a case of accident, fraud or mistake, to which classes of cases the authorities cited seem to apply.
The Code authorized the appointment of a receiver “ before judgment, on the application of either party, when he establishes an apparent right to property which is the subject of the action, and which is in the possession of an adverse party, and the property, or its rents and profits, are in danger of being lost or materially injured or impaired, except in cases where judgment upon failure to answer may be had without application to the court.”
Now it seems clear that by the very terms of this section a receiver should not have been appointed in this action.. The cause of action was contract for money only, precisely the case to which the exception in the above section applies, for judgment upon the cause of action could, under the Code,, have been had without application to the court, upon failure-of 'defendants, Allen & Farrar, to answer.
Nor does the complaint show cause for the injunction. It [433]*433was entirely settled before the adoption of the Code that a creditor could not by injunction restrain or interfere with the control of the defendant’s property until he had established his claim by judgment and issued execution thereon. The Code changed the rule so as to allow an injunction before obtaining judgment in the cases specified in section 168. It must appear — 1, that the plaintiff is entitled to the relief demanded in his complaint and that such relief or some part thereof consists in restraining the commission or continuance of some act, which, during the litigation, would produce injury to the plaintiff; or — 2, when it shall appear that the defendant is doing, or threatens, or is about to do, or procuring, or suffering some act to be done in violation of the plain-, tiff’s rights respecting the subject of the action and tending to render the judgment ineffectual; and — 3, where during the pendency of an action it shall appear by affidavit that the defendant threatens, or is about to remove or dispose of his property with intent to defraud his creditors.
It cannot be insisted that the first or second divisions of the section can be applicable, because the action is for the recovery of money and incidentally seeks the aid of ancillary measures in securing its payment. The third division only can be made available, but the plaintiff has not shown that the facts exist which entitle him to the restraining process. The section does not relate to any act already consummated by the defendant or others, but to threats or. acts which may be done. Nor is any ground shown for making Otis Allen a party to this action brought to obtain a judgment against the debtor, he not being a party to the original transaction, nor having made himself liable as a joint debtor or as surety. This is not fatal to the whole action, however, for the court is authorized, either of its own motion,- or on the application of parties to amend in that particular by striking out the name of a party. Sec. 123, Code.
One of the errors assigned is that the court held the answer to be frivolous and gave judgment against T. O. Allen [434]*434& Earrar for the amount claimed and by them confessed to be due. Treating the action as we do, as a suit for the recovery of money only, and regarding the various other matters contained in the complaint as surplusage, and there being no issue as to the cause of action except the question of ultra vires, we cannot say that there was any legitimate issue made by T. O. Allen & Parrar in their answers. They admit the cause of action as stated in the complaint, and we therefore must .permit the judgment as against them testan d.
The judgment of this court is that the judgment of the. Circuit Court in favor of the Preedman’s Savings and Trust Company against Thomas O. Allen and William E. Parrar be affirmed. That the several orders of the Circuit Court-awarding injunction and appointing a receiver must be set-aside, and the receiver discharged upon rendering a satisfactory account of his doings to the Circuit Court. The Circuit Court will forthwith direct that the mills and other property, which came to and still remain in the possession, of the receiver in pursuance of his appointment, be surrendered to them. As to the defendant, Otis Allen, the suit-must be dismissed with costs. ' The appellants must have judgment for the costs of this appeal.
The Clerk of this Court is directed to send without delay, to the Circuit Court for Duval County, a copy- of the ]udg_ ment of this court, together with a copy of this opinion.