large the issues, and admit further proofs, as it had before the entry of the decree." Nelson v. Hubbard, 13 Ark., 253; Woolman v. Garringer, 2 Mont., 405; Commissioners v. Carey, 1 Ohio St., 463; West v. Brashear, 14 Pet., 5; Supervisors v. Kennicott, 94 U. S., 498; In re Sanford Fork & Tool Co., 160 U. S., 247; Ex parte Sibbald v. The United States, 12 Pet., 448.

And where an appeal is taken from a judgment of an inferior court entered under a mandate of the appellate court, the latter tribunal will construe its own mandate in connection with its opinion to determine whether the inferior court proceeded in accordance therewith. Gaines v. Rugg, 148 U. S., 228; In re Sanford Fork & Tool Co., supra.

We are of the opinion that the court erred in ordering a trial de novo, under the circumstances of this case.

We are also of the opinion that the demurrer, to the amended answer of W. W. Corey was improperly overruled. This suit was brought against him for the misappropriation or misuse of a trust fund, and breach of duty, occasioned through neglect while he was acting in a fiduciary capacity. The facts set up in the complaint, if established by competent proof, show a condition of at least constructive fraud. Breach of duty by a person acting in a fiduciary capacity is "constructive fraud." Story, Eq. Jur., Secs. 258-9, 307-8, 311; Cooley on Torts, p. 607; Baker v. Humphrey, 101 U. S. 494, 502.

This case, as to Corey, therefore, falls within the exception contained in Section 17 of the Bankruptcy Act, 30 U. S. Stat. at Large, 550, which, so far as material here, reads: "A discharge in bankruptcy shall release a bankrupt from all of his provable debts, except such as * * * (4) were created by his fraud, embezzlement, misappropriation, or defalcation while acting as an officer or in any fiduciary capacity."

Corey having been charged in the complaint with a breach of duty by negligent management of the affairs of the bank, of which he was a director and officer, and consequent loss to the institution, his discharge in bankruptcy constituted no bar to this action, which had been previously brought against him, and therefore the demurrer ought to have been sustained. Likewise, although a judgment had previously been entered against him for a debt which he owed the bank, he was still liable for any breach of duty or negligent management of the affairs of the bank of which he may have been guilty while a director or officer of the institution, if such breach of duty resulted in injury to his trust.

So, we are of the opinion that this action survived against the executors of S. S. Schramm, he having been a defendant at the former trial, but having since died. He and others were directors of the bank and acted in a fiduciary capacity. The complaint charges that, while so acting, the deceased was negligent and inattentive to duty and that, in consequence thereof, loss resulted to the bank, that is, funds and property of the institution, through his carelessness and inattention to his duties were permitted to be wasted and lost. In such case the action survives, and may be maintained against the executors, under Section 3916, Rev. Stat.

It has been held likewise in California under a statute like ours. Fox v. Hale & Norcross, S. M. Co., 108 Cal., 478; Coleman v. Woodworth, 28 Cal., 567.

The judgment must be reversed with costs, and the cause remanded with directions to the court below to proceed in accordance with this and our former opinion herein.

It is so ordered.

BASKIN, J., and HIGGINS, Dist. Judge, concur.

C. E. THUM, RECEIVER OF C. BUNTING & CO., BANKERS, A CORPORATION, RESPONDENT, DANIEL WOLSTENHOLME, APPELLANT.

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v.

INSURANCE Delivery of POLICY - EXECUTION OF PREMIUM NOTE -PAYMENT. LIFE INSURANCE POLICY-CONTAINING CONDITION PRECEDENT — ANNUITY. NEGOTIABLE NOTE - WHEN PAYMENT OF PREMIUM ON LIFE INSURANCE ESTOPPEL. LEGAL TITLE TO INSURANCE POLICY VESTED BY PAYMENT OF FIRST ANNUAL PREMIUM. EQUITABLE LIEN - ON PROCEEDS OF LIFE POLICY - FOR TRUST FUNDS INVESTED IN PREMIUMS. FUND CREATED BY MISAPPROPRIATION OF TRUST FUNDS HOW FAR IMPRESSED WITH TRUST BY COURT OF EQUITY.

Insurance - Delivery of Policy - Execution of Premium Note - Payment.

Where it appears that upon the issuance and delivery of a life insurance policy a note is executed and delivered by the assured to the general agent of the insurance company for practically all the first premium; that the note bears the same date as the policy; and the policy was among the effects of the assured at the time of his death, the presumption is that the policy was delivered at the time it bears date; that the difference between the face of the note and the amount of the premium was paid in cash or arranged by the assured, and the giving and delivery of the note and the receiving of the policy must be held to operate as a payment of the first annual premium.

Life Insurance Policy - Containing Conditions Precedent — Annuity.

A life insurance policy which stipulates for the payment of an annual premium by the assured, with a condition to be void in case of non-payment, is not an insurance from year to year, but the premium constitutes an annuity, the whole of which

is the consideration for the entire assurance for life, the condition is a condition subsequent, making the policy void by non-performance, and the acceptance of a note for the annual premium is a waiver of the payment of the premium, and brings into operation the conditions in the policy referring to the note.

Negotiable Note- When Payment of Premium on Life IusuranceEstoppel.

The giving and acceptance of a negotiable promissory note for the first annual premium on an insurance policy, at the time of delivery of the policy and its subsequent sale and indorsement before maturity, operates as a payment of the premium, for the first year even if the note was never paid and, as between the maker and the insurance company, as a collection of the note, and the company is thereafter estopped from claiming a forfeiture of the policy because of the non-payment of the note.

Legal Title to Insurance Policy Vested by Payment of First PremiumTrust.

Where the first annual premium on a policy of insurance is paid by giving and accepting a note and delivering the policy, the legal title to the policy and its proceeds vests in the assured, and the subsequent payment of premiums maturing thereafter out of funds belonging to a bank in which the assured is a large stockholder and of which he is manager can not create a trust in favor of such bank.

Equitable Lien-On Proceeds of Life Policy-- For Trust Funds Invested in Premiums,

After an assured has obtained title to a policy of insurance, if he uses funds of a bank of which he is manager, in paying subsequent premiums, and such funds can be traced "into the policy," a court of equity will give a lien for such sums and interest on the proceeds of the policy.

Fund Created by Misappropriation of Trust Funds pressed with Trust by Court of Equity.

How Far Im

Where a fund sought to be impressed with a trust is grossly disproportionate to the amount of the trust funds alleged to

have been used in the creation of such fund, courts of equity will not decree the entire fund as a trust fund, but will allow a lien for the trust funds used.

Resulting Trust - Equitable Lien.

While Bunting was owner and manager of the Bunting Bank, a corporation, which was insolvent, although it paid its debts, he insured his life with the New York Life Ins. Co., for $50,000, payable to his heirs, and gave his negotiable note due in six months to Fritter, the general agent of the Company, for $1,500, and other considerations for the payment of the first premium. The policy was delivered to Bunting in exchange for the note. Fritter thereafter, and before maturity, transferred the note to the Pocatello bank for value, which bank forwarded the same to the Bunting Bank for collection and the amount was credited to the Pocatello Bank, which bank was then owing the Bunting Bank. Two other notes were given the insurance company for other premiums on the policy which were afterwards paid by Bunting's bank. Bunting died after the third note was paid, and the $50,000 was paid on the policy to defendant.

In a proceeding by the receiver of the Bunting Bank to impress all the insurance fund of $50,000 with a trust for the $5,110 paid by the bank, Held, that the note given in payment of the first premium having been sold and transferred by the insurance company before due, vested the title to the policy in Bunting on its delivery; that the sale of the note by the insurance company, operated as between the company and Bunting, as a collection of the note.

By giving the $1,500 note to Fritter, and paying the balance of the first premium and receiving the policy, Bunting acquired the legal title to the policy and its proceeds, and no subsequent payments of premium maturing thereafter, out of the funds of the bank, would create a trust in favor of the bank. The trust, if any, must arise or result from the transaction whereby the trustee acquired the legal title or right to the property in which the trust is claimed, and it must arise at the time the legal title is obtained by the trustee, and not afterwards.