French v. Hall

198 Mass. 147 | Mass. | 1908

Sheldon, J.

The defendant Hall has not appealed from the decree entered against her in the Superior Court; and the only-contest now made is upon the intervening petition of the Boston Safe Deposit and Trust Company. The fundamental question upon which the rights of the plaintiff and of the in ter yen or depend is whether there was an actual sale made of the Beckler note and mortgage by Charles F. Berry as trustee under the will of Mrs. Hancock to himself as trustee under the will of Mrs. Tinsler; and the main issue before us is whether the finding of the master that no money or other consideration passed from the Tinsler estate to the Hancock estate was plainly wrong, and whether his ruling that Berry did not sell the Beckler mortgage to the Tinsler estate, and the Tinsler estate acquired no title to the same and is not entitled to receive it or any part thereof or benefit therefrom, was erroneous. -

It is evident to us that the master’s finding of fact which has just been stated was an inference from the other findings which he has set out in his report rather than an independent finding upon evidence bearing upon this particular question. At most it cannot be treated as varying his express finding that the statements set forth in the first paragraph of the intervenor’s offer of proof are true. He had found then these facts: Berry, the effect of whose acts is here in question, was at this time the trustee of eight estates, including the Hancock and Tinsler estates, and held personal property belonging to them amounting to between three and four hundred thousand dollars, besides a large amount of real estate. All the money belonging to these various trusts he deposited in a bank in one account in his own name as trustee, without any account with the bank showing to which trust any money so deposited belonged, but relying for this solely upon his own books of account. On November 28, 1898, he had on deposit in this account the sum of $30,643.37, of which $5,850.50 belonged to the Hancock estate for investment ; the sum of $2,539.68 belonged to the Tinsler estate, of which a little over $2,400 was principal and the residue was income ; and the rest of this deposit belonged to his other trust estates. At this time he had not misappropriated any funds from any one of his trusts. On this day he took in his name as trustee under the will of Mrs. Hancock a mortgage from one Jones for $10,100; on the same day he credited this estate with the sums of $4,250 as the principal and $17.70 as accrued interest on the Beckler mortgage, and charged the estate of Mrs. Tinsler with like sums for the “ purchase Beckler mortgage.” He would have testified that according to his system of bookkeeping these entries meant that the Hancock estate had sold and the Tinsler estate had purchased the Beckler mortgage for its face and accrued interest; and without such testimony, that is the actual meaning of these entries. After this, in four accounts which, as trustee under the will of Mrs. Tinsler, he prepared and sent to the life tenant under the will of Mrs. Tinsler, and which covered the four years from 1899 to 1902 inclusive, he charged himself with the annual interest on the Beckler mortgage. The last three of these accounts were assented to by the oestui que trust, but none of them was filed in the Probate Court. He never filed in the Probate Court any account as trustee under the will of Mrs. Hancock, and is not found to have rendered any account under the trust to any cestui que trust. It has been agreed also by the parties that Berry kept all the mortgages belonging to his trusts alphabetically arranged in a box in his safe, and kept the notes arranged in chronological order in separate envelopes in a box in the safe deposit vault.

Under these circumstances, we do not see how the finding of the master that no money or other consideration passed from the Tinsler estate to the Hancock estate can be maintained. When Berry took the Jones mortgage for the latter estate he had on hand for investment only $5,850.50 belonging to that estate. It was necessary to raise $4,250 less fifty cents to pay for the new investment. He had full power to sell and dispose of this Beckler mortgage; the only apparent way in which he could transfer money from the Tinsler estate to the Hancock estate, inasmuch as all the money belonging to all of the eight trusts which he held was kept together in one bank account, though earmarked as a trust account, was by entries on his own books; and these entries he made. He was not at this time in default, and there is nothing to overcome the natural presumption that he acted in good faith. The amount thus paid by the Tinsler estate was larger, to be sure, than the amount of the funds of that estate then available for investment; but this discrepancy was soon after accounted for, according to Berry’s books and an agreement of the parties, so that it becomes of no significance. From the manner in which these notes and mortgages were kept together by Berry, without distinction as to the respective estates to which they belonged, it sufficiently appears that no actual delivery of this note and mortgage could have been made. We are of opinion accordingly that this finding of fact made by the master was plainly wrong, and should be reversed.

And we are of opinion that what was thus done by Berry as trustee of each of these estates was tantamount to a sale and transfer of this note and mortgage from the Hancock to the Tinsler estate. The full value of the security was paid by one estate and received by the other, with the intention of the representative of both of them, acting in good faith, within the limits of his authority, that the title should pass from one to the other. This intention was carried out as far, under the circumstances, as it could be carried without making a formal assignment of the mortgage and indorsement of the note. But this was not necessary. Hewins v. Baker, 161 Mass. 320. Morris v. Bacon, 123 Mass. 58. Norton v. Piscataqua Ins. Co. 111 Mass. 532. Crain v. Paine, 4 Cush. 483.

The defendant contends that the well recognized doctrine that one, even though acting in two different characters, cannot contract with himself, is fatal to the claim of the intervenor. But we do not think so. This transfer is to be regarded in equity as a completed and executed transfer. Nothing now remains to be done but to require a third person, the defendant, into whose hands the security has wrongfully come, to deliver it up to the person rightfully entitled to receive it. For the reasons already stated that person is the intervenor.

We do not regard it as material that Berry, four days after taking the Jones mortgage, sold it for its face value, and apparently reinvested only $5,500 of the amount thus received.

We do not mean to say that the entries upon Berry’s books are conclusive as matter of law upon the plaintiff or the intervenor ; nor do we think that this case is to be governed by the doctrine of the cases which have held that where the same person is named" as executor and as trustee under the will, he can be relieved from his liability as executor only upon the allowance in the Probate Court of an account filed by him as executor, showing that he has paid over the money to himself as trustee. Crocker v. Dillon, 133 Mass. 91. Conkey v. Dickinson, 13 Met. 51. The book entries here in question, under the circumstances of this case, must be regarded as acts done by Berry, and not as mere statements made upon his accounts.

It follows from what has been said that the ruling of the Superior Court was wrong and the decree of that court must be reversed; and that the intervenor’s third, fourth, fifth, sixth and seventh exceptions to the master’s report must be sustained, and a decree entered in its favor.

So ordered.