241 Mass. 346 | Mass. | 1922
1. The main question presented for decision in these cases is whether a dividend ought to be paid to the depositors in the savings departments in trust companies (which are being liquidated by the commissioner of banks under St. 1910, c. 399, as amended, now G. L. c. 167, §§ 22 to 36), on the face of their several claims without deduction for dividends already paid and for the value of special security set apart by law but not yet realized for the benefit of depositors in the savings departments, or whether such dividend ought to be paid only on the balance due on such several claims after the deduction of dividends paid and the value of the special security sequestered by law for the benefit of depositors in the savings departments.
The facts are that part payment has been made on the claims of the savings depositors and that now there are funds in hand from which a dividend may be paid to commercial depositors, and the commissioner of banks asks authority to pay out of commercial assets a dividend of equal percentage on the face of the claims of the depositors in the savings departments, it being contended that they are so entitled under the statute.
There is no explicit provision in the statute governing the rights of parties upon these precise facts. The cases at bar must be decided upon the general terms of the statute in the light of relevant legal principles.
Trust companies are primarily commercial banks of deposit and discount. They are owned by stockholders and are managed ultimately for profit. Their main reliance to this end is and of necessity must be commercial deposits. In this respect they differ radically from savings banks, the fundamental idea of which under our statutes has never been departed from, that all funds
While in some aspects the depositors of the savings department are cestuis que trusts and the trust company is trustee, in other aspects the depositors are creditors and the trust company the debtor. Reed v. Home Savings Bank, 130 Mass. 443. Dickinson v. Leominster Savings Bank, 152 Mass. 49, 52. Greenfield Savings Bank v. Abercrombie, 211 Mass. 252. Commissioner of Banks v. Cosmopolitan Trust Co. 240 Mass. 254.
Cases somewhat analogous to those at bar have arisen in this court. In 1820, the question was presented whether a creditor of an insolvent estate of a decedent, having as security for his debt a mortgage given to him by the decedent of less value than the amount of his debt, could prove his claim for the face of his debt or whether he must first deduct the value of his security
The Supreme Court of the United States, in Merrill v. National Bank of Jacksonville, 173 U. S. 131, adopted the opposite view although among the four dissenting justices was a former Chief Justice of this court. It would be superfluous to enter into a discussion of the merits of the question in view of the amplitude of reasoning there to be found. There is some diversity of opinion among the State courts. See cases collected in 7 C. J. 750; L. R.. A. 1918 B 1024, et seq. It is enough to say that on renewed study we remain content with the Massachusetts rule. Even if that were not true, it has been so long imbedded in our jurisprudence and has been so frequently followed that no departure from it now ought to be made. Mabardy v. McHugh, 202 Mass. 148.
The facts in the cases at bar call more clearly for the application of the general principle than did those in Amory v. Francis,
The savings department depositors, therefore, can share with
2. No opposition is made by any party to the payment of a dividend to commercial creditors out of commercial assets as prayed for. It is warranted on the record.
3. Subsequent to the time limited for the proof of claims and subsequent to the authorization of the payment of a dividend upon the claims seasonably proved, proofs of other claims were filed with the commissioner of banks. The question is whether the unexplained failure of a claimant to present his claim within the time limited in the notice and before dividend authorized expose him to any penalty or place him in any less favorable position than if he had proved his claim within the time prescribed in the notice, as to funds subject to no higher equity than claims duly proved within the prescribed time.
These claims appear to be as meritorious in their nature as those earlier proved. No rights of third persons have intervened. No penalty for failure to prove the claims appears to have been ordered by any decree. None is required by the terms of the statute. No delay in the ultimate settlement of the estate has been caused thereby. In all good conscience these claimants appear to be entitled to the same dividend previously ordered paid to other depositors. To declare such dividend would accord with the provision in our statute for analogous cases in insolvency. G. L. c. 216, § 128.
In the Cosmopolitan Trust Company and Prudential Trust Company cases decrees may be entered (1) authorizing a dividend to commercial depositors in accordance with the prayer of the petition, (2) authorizing a first dividend to those savings department depositors whose claims were not proved until after the order for payment of like first dividend to those who proved claims in accordance with the notice. (3) In each of the cases decree is to be entered denying petition to pay savings department depositors out of commercial assets. Costs to savings department depositors as between solicitor and client payable out of the fund are to be in the discretion of a single justice.
So ordered.