Hall v. Windsor Savings Bank

BANK. SAVINGS WINDSOR. by what sufficiently covered They all been examined imma rendered matters to relate to said, are found or case. in the questions by main decision of the terial error. discloses no reversible record

Judgment affirmed. disposition part of having J., Miles, in the took no retired Note: — the case. Savings

Adgelion Bank. Hall v. Windsor K. Term,

February Butler, Taylor, Slack, J., Powers, Watson, JJ. C. Present: Opinion filed June Right Sub Equitable An

Subrogation Doctrine—How of Right Surety to rogation May of Arise— Subrogation— Rights Beneficiary May to Protect His Sue Trusts— Wrong Surety Not Implicated When Need Trustee — s Seeking Against Exhaust Remedie Principal Before Subrogation Subrogation Right Not of Af of — Benefits Limitations Another’s Conduct—Defenses fected of and Laches—Hoto Raised—Limitations Actions—When of Begins Ex Statute to Run—Trustee Maleficio—Harmless Subrogation Dependent Upon Solvency Not Error — Insolvency Word Debtor—Notice Trust Use of of of Payee in Inadequate Name ‘.‘Executor” After of Chech— Briefing Reporting Findings Made, on Which Evidence — Discretionary with Evidence—Admissibility Chancellor — of Personal Note Bank Executor’s Memoranda in Suit Against The Executor’s Surety Bank Funds Misappro priated Authority, Powers, Executor’s Du —Nature of May Discharge Obligation ties—When Executor Unau of With Funds thorized Contract Estate—Purchase Real of Authority Right Estate Without Administrator a Re — siduary Legatee Compel Misappro Restitution Funds priated by Surety Executor —Executor’s Entitled to Subro gation Knowledge, by Administrator Residuary —Effect of HALL v. WINDSOR SAVINGS Surety’s Legatee, Default, Bight to Subro- Executor’s gation or Executor A Technical —Administrator Trustee— During Inapplicable

Statute Limitations Continuance Account on Executor’s Settlement Trust of Trust —Effect of Inapplicable Statute Limitations Relation —When of and, Defaulting Trustee Ex Executor Bank Re- Maleficio— ceiving Misappropriated Mala Fide Funds Are Tort Joint Feasors. subrogation highly equitable character,

1. The doctrine of is and regarded law,” created, is of one the “benevolences of fostered, promotion in the and interests for the of justice. natural Subrogation may independent any 2. arise of between the contract parties by it, depend to be affected and in such does not cases upon privity between them. right subrogation ordinary 3. The is not confined to the relation principal surety, whenever, complex in the but arises affairs, compelled pay relations business one man is which, primarily equity debt for another which is liable good conscience, discharged by should have the latter. widow, 4. aWhere had she survived the decree of distribution her estate, prosecuted given by could husband’s the bond executor and recovered the amount to which she was entitled decree, right, upon decease, passed under the such her her personal representatives. By suing bond, 5. on an executor’s under G. L. adminis- an widow, appointed trator non cle bonis of the testator’s after the defalcation, right, given executor’s not waive did to such by widow G. L. to demand and receive the estate decreed any person having to her possession, from other same in his surety, lawfully required by legacy, subroga- and a right. tion has the same surety fiduciary compelled 6. Where of a is to answer trust, rights latter’s breach of he succeeds to the of both fiduciary que and the cestui trust. Equity jurisdiction 7. of a suit to recover trust un- funds held lawfully. protect 8. Whenever a trustee refuses to take measures to or re- implicated wrong cover the trust or is in the to be SAVINGS v. WINDSOR TTAT.T, protect equity may redressed, que sue in cestui rights. surety Generally, his remedies exhaust is not bound 9. subrogation, seeking principal the benefits of before right, being equit- upon payment; right but accrues equities equity, able, subject and where rules of to the compelled exceptional cases, may, require to first be principal. proceed estoppel, subrogation may be lost waiver 10. While the being right, personal, of an- conduct is unaffected other. subrogation subject limitations defenses of

11. and laches. demurrer,-if facts raised limitations defense appear face of the bill. on the specially pleaded, it will otherwise must be of laches 13. The defense not be considered. bond, surety after the defalcation on an executor’s Where obligations compelled pay executor, to certain of the right legatee, the of a administrator de ionis non rights subrogation until not arise the administrator’s did to began payment, that date. to run from such and limitations by general will will bar action a trustee rule that whatever 15. The apply by que a when trust not also bar one the cestui does trust; in a breach of the trustee unites another by defaulting surety against one who executor’s an action a misapplica- knowingly participated in the with the executor funds, whereby a trustee such defendant became tion trust begin maleficio, to run the statute of limitations did not ex surety que the of the cestui to which the trust subrogated, knew, until circumstances the cestui or in the ought known, the to have breach of trust. it, finding, excepted, warranting for 16. Where a to lack of evidence rejected result, exception affecting can be without the unavailing. subrogation depend upon solvency does not 17. insolvency person paid, debt has been but arises whose wholly attending payment. from the circumstances such deposits finding that 18. A a bank took the avails of trust with notice supported by character of their field the evidence. HALL WINDSOR SAYINGS “Exr.,” abbreviation, “Executor,” 19. or its The addition of word charge enough payee to the name of the check was to pro- bank, received to which it was delivered and which belonged thereof, some ceeds with notice that to funds executor, they payee were estate which private funds. funds not regarding nothing excepting party’s ex- 20. Where the brief more said findings, ceptions the refusal of' the court make certain to to requested findings facts than that were for “essential such bearing legal bank,” question notice inadequate. character, briefing several were of that findings Requests report which seek to have the chancellor findings evidence on which certain material were made discretion, addressed to the chancellor’s not error and was for him them. to refuse misappropriated by aWhere bank had received funds an executor personal bank, on his same indebtedness by surety, compelled an action the executor’s who had been defalcation, the amount of such recover sum .from bank, note, the executor’s and bank card reference - containing thereto certain memoranda in ma the nature of admissions, admissible, subject explanation, terial were given weight evidence the chancellor deemed proper. surety defaulting

23. In of a an action bank executor misappropriated which had received funds and credited personal it, them on the executor’s indebtedness to evidence paid given that the note so had been raise the executor to money purchase property certain for the estate held inad- missible, executor, view of the final account rendered in which neither the note nor claimed to purchased listed, for the estate was and of other circumstances case, attempt purchase in the in the circumstances by amounting to a devastavit the executor for his which they bondsmen would be liable unless could show the estate had the benefit it. theory misap-

24. evidence Such admissible on the that no propriation prop- was shown and no loss sustained because the erty bought belonged for and to the estate and worth paid it, occuring the amount for the loss when months later WINDSOR SAYINGS property proceeds, the executor sold the the and converted probate for reason the decree of court the execu- the only power pay question tor had to over the the funds to residuary legatee, right executor of the to hence he had no purchase property the for the never the estate became property of the estate. representative authority, An executor and his limited debts, estate, pay duties are to collect the assets of the its thereto, powers and distribute the residue those entitled his to delegated being only statute, those him the will to implied powers except necessarily no incidental to those so conferred. beyond expressly powers an executor makes a When contract the given statute, implied him will or necessarily, there- from, though made in benefit the name estate, he alone is bound. attempts pledge an to 27. If executor the credit estate beyond right discharge powers, obliga- contract his depends upon being tion out funds its estate so beneficial probate estate receive sanction of the court. cannot, authority An

'28. administrator nor an can executor without given by purchase will, real estate. misappropriated estate, 29. Where an executor the funds of an which probate pay- residuary legatee, by court had decreed ing applied personal them to a bank to be on the executor’s bank, participating indebtedness to the mis- latter appropriation, residuary legatee the administrator of had proceed equity against compel the bank to restitution. surety bond, compelled having pay

30. The on such executor’s defalcation, subrogated the amount of the latter’s became rights residuary legatee had, which administer necessary reimbursement, including so far as to secure pur- to follow the trust into the hands of a notice, proceed person par- chaser with and to a third ticipating principal. ain breach of the trust misappropriated estate, 31. Where an executor funds an which the probate residuary legatee, by pay- court had decreed to the ing them to a bank to be on the executor’s indebted- it, surety ness compelled and the on the executor’s bond amount, surety the action of bank HALL v. WINDSOR SAYINGS BANK. by the was not barred fact the administrator of the

residuary legatee, bond, suing the when on such knew that default, appearing executor was in it not that the administra- misappropriation particular knew of tor or that de- making fendant took assets of the estate in circumstances recovery. liable their for a An or executor is technical trustee. 32. administrator que trust, As trustee cestui limita- between a the statute of apply long not trust claim trust tions does to bar a as the continues. change fact that an not As the executor settles his account does long his relation to funds of the estate so as he holds knowledge trustee, repudiates the until he trust and funds as brought que cestui statute thereof is home begin not to run.

limitations does executor, by funds, misappropriated by a received an were 35. Where trustee, thereby fide, bank so that the bank became mala maleficio, up bar to the statute as a ex the bank could set que one sub- trust or who had become cestui thereto, rogated amount so received. to recover from misappropriated paying funds of an estate an executor 36. Where it, on his indebtedness to a bank them to bank, being fide, mala received the executor funds equally tort-feasors, joint and as bank are such each was secondary amenable, being primary culpable and there no liability participants, surety on the exe- between hence compelled bond, amount who cutor’s against defalcation, remedies need not exhaust his proceeding the bank. estate before executor’s Appeal Chancery. answer, bill, demurrer, Heard on -chancellor, Term, 1922, June Wind at the and facts found decree Fish, Demurrer County, overruled sor Chancellor. states the appealed. opinion plaintiff. The defendant remanded. case. Affirmed C. Webber for the defendant.

Marvelle person surety merely A has no claim because money principal. from latter has received v. WINDSOR SAVINGS Cyc. 251; Houck, Brown Moore, 41 Hun. 16; Cureton v. 204; N. Triiton, C. v. 2 411; v. Moore C. P. Crafts Hofman Schwabe, 33 (N. Y.) Barb. 194. To person liable, make such party must he the breach of participated trust and it. R., 12 A. annota- L. tion p. 1048; 25 L., pp. R. 1332-1333; C. yHale 13 430 Ann. Cas. Bank, v. Savings 487; Windsor 90 Yt. Allen v. Puritan Trust Co., 409, 211 Mass. L. R. A. 1915C, fiduciary’s liability absolute, liability but of the

third party conditional. Northern Trust Co. v. Consolidated Co., Elevator 142 Minn. 4 A. R. 510; p. L. L. 3 Supp., R. C. Sticlmey, Sargent plaintiff. & for the Skeels surety paying place off a debt stands creditor rights has, purpose all the has which obtaining Subrogation, on 89; Hodg- reimbursement. Sheldon § Shatu, son Myl. Patchin, v. 3 190; 265; & K. Scott v. Hale 54 Vt. v. Savings Bank, Windsor Robinson, 90 487; Vt. Lidderdale V. 2 Brock, 159, 15 Fed. Cas. 402. only

Subrogation not also all extends securities but Bonding 25 L. 1332; of the creditor. R. C. Am. Co. v. remedies Surety 97 Md. Bank, 466; Nat. 99 A. Nat. Mechanics’ S. R. Bank, Co. v. State Sav. 156 Fed. 13 Ann. 421; Cas. U. S. Adoue, Fidelity 677; v. 104 1914B, Co. Tex. Ann. Cas. Mills, Lumpkin 349; Bank, v. 4 Clark v. First Ga. Nat. 57 Mo. App. Holzer, 65 277; 263; Pierce v. Mich. Blake v. Traders’ Nat. Bank, 145 Mass. 13. by a are diverted an trust funds trustee indi-

Where payee vidual under circumstances that actual or debt que the diversion the constructive cestui notice trace equity a suit and recover the funds. maintain Hale Bank, Savings 487; v. 90 Spencer, Windsor Shaw v. 100 Co., 382; Allen Trust 211 409; Mass. v. Puritan Van Allen Mass. Bank, 52 1; v. Nat. N. Y. Taunenbmm, American v. Cohnfeld 653; R. Powell Freeport 176 N. 98 A. S. v. Batik, Y. 193 N. Y. S. 100. guardians permitted change

Trustees per- buy land, sonal into real estate estate authority without from or decree Perry trust instrument of court. p. 230; Kent. SAVINGS WINDSOR Earl Winchelsea Trusts, 606; Loring Trusts, 109; on § § Ashburton, Vesey 6; In Norcliffe, 1 434;’ Vern. Ashburton v.. Surety Salisbury, Empire Co. 348; re 3 Johns. Ch. State V. Cohen, Reilly, 71; 156 N. V. 95 N. Y. Bow- 935; S. Lockman v. 274; Pinhham, Bawle, man 295; Appeal, 71 Me. Bonsall’s Crawford, Corker 9 Wat. & Sar. A. D. Kaufman v. Jones, U. 3491.' S. L. ed. G. L. Enright 1, 1900, Joseph quali- August C. J. On Powers, filing Henry Story, deceased, by will L. fied as executor surety. plaintiff: By the terms bond on which the residuary will, Story, testator, widow of the Sarah W. settled, leav- legatee. died before her husband’s estate was She ing will On November of which was the executor. 30, 1903, Windsor, in which probate court for the district ap- settlement, passed upon both process estates were Henry L. Enright executor final account of as proved the cash, notes, deposits, and in his in Story estate, found hands ordering him that $8,473.72, and made a decree sum of estate, according Story’s Sarah W. sum to himself as executor of complied Story’s This was never will. order the terms of Mr. with. Henry made, decree was of the At the time this the assets in Story deposit the defendant bank of L. estate included Springfield Savings $1,346.12, in Bank $1,587.72, another Savings and a third in the Bellows Falls Institution of $821.12. Story; Henry in deposit The the name of L. first-named stood January 1, 1904, amounted, interest, $1,607.31. on and executor, receipting it, for it as Enright withdrew day, On note applied by the defendant on its then and the avails were Enright, signed 20, 1903, by and October $3,500.00 for dated deposit Springfield Buck. The in Hale, and E. B. F. S. Enright, name executor Savings Bank in the of J. O. stood January Story’s estate, 1, 1904, and on amounted Henry L. Enright deposit by giv day, withdrew On $1,368.87. signed by as an the former bank order of the treasurer ing the Story’s estate, receiving a treasurer’s Henry L. executor himself, On drawn to as executor. stated for amount check drawn, de indorsed this cheek as following day, on the defendant, and its treasurer it livered to. above referred $3,500 note v. WINDSOR SAYINGS name C. of J. deposit Falls also stood Bellows July 1, 1904, On

Enright, Story’s of H. executor L. estate. out by an made $828.25, amounted to and was withdrawn order treasurer, signed O. Harris, and “J. the defendant’s A. W. Enright, indorsed re- Est.,” executor H. L. “For Savings Harris, Treasurer.” Bank, A. W. mittance to Windsor named was issued Thereupon, a check for the amount cashier’s This Falls Institution and sent defendant. the Bellows against Enright for applied by the defendant on its note had $2,800, security deposit as for which the been the sum Enright. hypothecated by having appointed 8, 1910, Davis, April

On Gilbert A. Story, administrator de bonis non the estate Sarah W. of the such, by leave and the name

having qualified as plaintiff aforesaid, brought an action probate court judgment to, on referred and therein recovered the bond above May 25, amounting $4,884.49, plaintiff paid which the on theory equity predicated 1912. This is in on suit subrogated payment plaintiff became such Savings Bank will him as rights against defendant enable misappropriated deposits of these it so much here to recover of for his required reimbursement. filed an answer and embodied therein de- The defendant brought hearing trial murrer, before be- which was overruled, began; it was and the benefit of fore the chancellor exception was reserved. saved was properly demurrer overruled. The doc [1-3] scope subrogation application is much broader its trine of highly equitable character, than the admits. It is regarded law,” created, the “benevolences and is one of in the and promotion interests for the fostered, and independent any arise justice. contract be It natural by it, and in not to be affected such cases does parties tween Durham, them. Va. privity between Sands v. 99 depend upon 86 R. National Bank 145, 54 L. R. A. A. S. 263, 38 S. E. Lowell, 321; Amory (Mass.) 504; Allen Cushing, 53 Vt. Bence, 27 N. Memphis 128 Ind. E. & Huffmand Little Dow, 595, Sup. R. Co. v. U. S. L. ed. Rock R. law, right tendency is a of the is favorite and 482. Ct. application. its It rather than restrict is not confined to extend v. WINDSOR SAVINGS BANK. ordinary principal surety, to the relation and but arises when ever, complex affairs, in man relations of business is com one pelled pay to debt another primarily for which is liable in which, equity good conscience, should have dis been charged by the latter. Cushing, National Bank supra. signed The bond usual plaintiff was [4-6] form among things legacy payment other secured the to Story. Mrs. Had she survived the of distribution of decree her estate, have prosecuted husband’s she could and re bond the amount which she covered was entitled decree. under the Kimball, Probate Court v. passed Vt. 320. This hers to her non, executor and to her then administrator de bonis is equally available to him. plaintiff’s G. L. 3509. The liabil ity and its amount were proceedings established instituted by Davis, plaintiff and the compelled the award therein. The defendant admits Hall was liable ad Story’s estate, minstrator of Sarah W. denies that latter but any remedy against had defendant; therefore, argues, nothing is the plaintiff subrogated there for to be to. This claim By suing on bond, unfounded. not administrator did waive the sue the defendant. Allen v. Puritan Trust Company, 211 1915C, Mass. N. E. L. R. A. Whenever an estate has been person decreed to the it, entitled to that person may same, demand recover only not from ‘‘ administrator, the executor or but from any person other hav ’’ ing possession. This is a statutory right. the same G. L. necessary, It is not however, appeal statute injustice escape gross an order to if would result it were to surety, lawfully held that this who required to pay, remedy was without has wrongfully one who and know ingly misappropriated Subrogation the estate. operates to save operates regard him. without form or technicalities, and plaintiff compelled when the to pay what ought to subrogated, only Enright’s paid, rights against defendant, rights but also which his que cestui trust, Story estate, had it. the fiduciary Whenever surety of a compelled to answer the latter’s breach trust, rights of fiduciary he succeeds to the both and the cestui. Bank, v. Trader’s Nat. Blake Mass. 12 N. E. 414; Ameri Bonding Company can v. National Mechanics’ Bank, 97 Md. 135 v. SAVINGS HALL WINDSOR Alexander, 340; 36 N. Fox C. 385, 466; 55 99 A. S. R. v. Atl. Fidelity Pickens, & Kennedy 147; 38 N. C. United States v. N. W. Guaranty Bank, 16, 36 D. 161 Co. v. Citizens’ State N. Holzer, 263, 65 32 1918E, 327; A. Mich. 562, L. R. Pierce v. Deposit Fidelity & 431; Farmers’ and Traders’ Bank v. N. W. Co., Ky. Ky. Rep. 22; 56 22 Pinckard S. W. Law. (49 Va.) Guaranty v. Woods, 140; Fidelity 8 Gratt. & Co. v. fact Bank, Term. 157 W. 414. that the Peoples’ S. principal’s immediate credi plaintiff pay the debt to did not tor, paid his situation. Story’s estate, does not He Mr. affect law, it by orderly processes one who succeeded to lawfully compel payment. and did its who could regarding liability pre- we have the defendant’s

What said deposits course, supposes, that the defendant took the notice, constructive, they represented funds, that actual or speak —of which we shall further herein. jurisdiction in such cases too well equity has That [7-8] Wilder, require Wilder’s Exrx. discussion.

established to anything L. 1072, 25 R. C. 1391. Nor there 178, 53 Atl. Bank, Savings 90 Vt. when Windsor in Hale v. contrary. understood, whenever a trustee rightly And protect measures to or recover the trust refuses to take wrong implicated redressed, to be cestui sue or is rights. Makepeace, equity protect Zimmerman v. his Weetjen Vibbard, Hun, E. Neal Ind. N. Bleckley, 29 E. S. C. S. against But it is said that principal before ishe surety must entitled to exhaust subrogation, remedy plaintiff pro that this in hand does show bill Enright’s alleged It is against estate. ceeded misappropriated and that of amount died, when insolvent recovered of his only $3,300 could be and was by him about inferentially least, at appears, From estate. Enright’s the remedies had exhausted Davis

plaintiff or brought. Moreover, law is not as bill was when the estate is not generally, surety Speaking claims. the defendant seek principal before his remedies exhaust bound to upon pay subrogation. His accrues ing the benefits subject equity. If it is rules of Being equitable, ment. equities it; if the of a equity, he must do one would WINDSOR SAVING-S BANK. given require ease surety that a against first proceed should the principal, the court which he applies will mould its decree accordingly. But is rights it the of the creditor he suc- to, ceeds and a creditor ordinarily is not obliged proceed principal before can he invoke remedies. other may, exceptional He in eases, compelled be so. to do Under like circumstances, surety seeking subrogation may so be compelled. fit an ^[10] estoppel. person, The But whose being subrogation favor it arises personal, it being is unaffected may enforced be lost by by a waiver the con bene duct of another. plaintiff’s right So the by is wholly unaffected proceed against Davis’ choice to plaintiff instead of . seen, defendant As we have Davis did thereby not waive right against the defendant. Much less could his choice bind plaintiff. or affect the These remedies were not concurrent and inconsistent. There was no more an election of than remedies always is security case when a creditor who holds collateral gets partial for a debt satisfaction from a surety of debtor. Black v. Traders’ National Bank, supra. right, subject too, [11-14] of limita defenses tions and These, laches. however, are distinct defenses of ma terially different characteristics. Wilder, 123, Wilder v. 82 Vt. may advantage 72 Atl. 203. former be taken a of under appear if the facts bill, demurrer on the face but the specially latter must answered. Ib. The answer here does up set defense of laches it is not not so for consideration. The defense of limitations is covered the answer and is for Mfg. Co., consideration. Sherman v. Windsor 57 Vt. 57. What on appears the face of the plaintiff bill this: The paid the May judgment 25, 1912; this bill was served on the defend May 24, ant on 1916. The subrogation not does arise Cyc. surety pays the debt. 374; until the 37 Ætna Ins. Life Middleport, 537, Co. v. 124 U. S. 31 L. ed. Sup. 625; Ct. Elgin 1315; Goecke, National Bank v. R. C. L. 295 Ill. Gawthrop Co., 149; 129 N. E. Co. v. Fibre Specialty 257 Pa. 760; Harris, Atl. v. 349, 101 Jones Ark. 117 S. W. 1077. appear statutory So does not period has run. Nor can this avail itself period elapsed misapplication. time that has since plain- That the v. WINDSOR SAVINGS VT.J acquires, by greater rights residuary tiff subrogation, no than the legatee had, may that, be admitted. be admitted also general rule, an whatever will bar action also trustee will the cestui. But when a trustee unites with another bar one Parker trust, apply. latter does a breach rule not Hall, Marshall, Herron v. (Tenn.) 641; Humph. Head (Tenn.) knowingly 443, 42 A. D. “When this defendant misapplication participated funds, became Thomson, trustee ex Jackson Pa. maleficio. Moore, Evans R. 247 Ill. 93 N. E. 139 A. S. Goodman, Case Eq. 1048, Pom. Mo. 156 S. W. express trust, In an statute limitations the ease of begin repudiates does to run favor of the trustee until knowledge brought the cestui the and this fact is home que Reynolds Sumner, trust. 1 58, 334, v. Ill. N. E. Allen Stewart, 327, L. R. A. 109, A. S. R. v. 214 Mass. in So, too, implied trust, case of an 100 N. E. 1092. the the in begin implied to run favor the trustee statute does not ceshd, right the until the latter knows, the or in ought give to know of facts the circumstances the that rise to his Bleckley, Neal action. 506, cause of 51 S. C. 29 S. E. stated, Story

As has died misappropriation Mrs. before the in nothing and there is that administrator, record to show her they developed facts until in Davis, knew the were the suit plaintiff. Neither brought administrator nor findings go, far as the plaintiff, so learned the facts more commencement, years prior to the than six of this suit. excepted [16, finding En- 17] insists that insolvent, was there was no war evidence ranting exception it. taken But below limited; was it went any may far inference only be drawn “so that he was in the time of the transaction Enright solvent at between said Savings defendant, Windsor Bank.” Thus limited, excep importance. question tion involves a of no Enright Whether not, was solvent or not at that time does view of the facts of ease, affect the defendant’s liability; finding this could rejected affecting without result. exception is un availing. Platt Conant, Shields Vt. 119 Atl. 520. subrogation far as the goes, So it does depend upon insolvency solvency person of the whose debt has been paid, HALL WINDSOR SAYINGS BANK. attending pay wholly but from the arises circumstances 323, 13 Spaulding Harvey, ment. 129 Ind. 28 N. E. L. R. A. 28 A. S. R. 176. finding

An that the defend- exception also saved to the deposits ant took of the notice. avails ^[18] So far deposit defendant’s own bank concerned, exception. we need take over this but little time fairly appeared charge had the defendant’s treasurer active and oversight deposits and withdrawals. He knew that deposit name; knew that it as stood withdrew executor; Enright’s have known that was he must note. defendant showed The cash book of the the withdrawal application precise sum and the of the withdrawn. This latter tending fact identity was evidence to establish the in of the Surety dorsement. Gaskill’s Admr., American Co. v. 218; Story’s Hall, Atl. Admr. v. 86 Vt. S.) (N. 1915B, L. R. A. argued Ann. Cas. It is that the withdrawal have been made at one window and payment another, at that the made defendant’s officers Avere But there was evidence this, deceived. no to show —with out which the inference drawn the chancellor fully war ranted.

by a check As we have payable J. seen, C. Enright, Springfield deposit executor. The order on paid properly which this withdrawal made was received evi dence, notice to defendant, identify show but —not fund represented by the check as Story estate. this check argued applied by It is when received and gave repre was ear-marked and no defendant not notice that it funds, put or even inquiry regard sented trust the defendant on ing question. assigned argu reason that The as the basis of this specify ment is that the check did not the estate of En- which differing was executor—therein from the one involved Savings Bank, supra. Hale v. Windsor That sup there are cases porting contention of But be admitted. reasoning, the better the addition of the “Executor,” word abbreviation, “Exr.,” to the name payee or its of charge enough to the defendant check with notice that the belonged some estate of executor; funds which they private funds and that were trust funds. It is to be v. WINDSOR SAYINGS 139 HALL right of is not presented question observed that the payee account private a check to to credit such bank only, concerns, check; it money private on his pay or to out the itby on debt held such a check apply the bank McCabe, 135 individually. In Bank v. payee, State against the deposited one 20, held that when 479, 98 N. W. it was Mich. thereto, added in his word “trustee” money own with the name de it debt of the apply the bank could not the individual it that Monticella, 119, was held Bundy In v. Ind. . positor “ deposited in name of Wil J. C. the fund was the fact that charge enough bank with notice that son, trustee,” was fiduciary in a money capacity held and could not it was private It was that word to Wilson’s debt. said meant merely clescriptio personaej “trustee” was not imported trust, of a something; and the existence holding ap This notice of the character the fund. proved Shepard Bank, 532, National Ind. v. Meridian N. E. Kyle, 347, 383, 165 W. a check In Brovan 166 Wis. N. v. ’’ ‘‘ Lucas, Guardian, indorsed, and so was de-

payable to Carroll A private in a credit Lucas’ account. posited bank deposit was used Lucas’ note to the bank. part of ‘‘ ‘ ’’ guardian ’, took with was held that the bank notice. word says speech, “is a court, well-understood word common implies average lay to the mind that held fund guardian capacity belong of a does not guardian, but to * * * fact that the cashier who did not know the ward. was, immaterial.” ward Spencer, 100 382, 107, In Mass. 97 A. D. A. R. Shaw stock 115, Carter, Trustee,” issued “E. certificates were pledged private Shaw, for the debt it was held that notice; pledgee took them the addition the word alone, “trustee,” had the B., same effect the words “A. D.” This case was expressly approved trustee C. in Dun 142, can Jaudon, 21 L. ed. Wall. and followed in Swift Williams, 835; Marbury Ehlen, 68 Md. 72 Md. Fidelity Atl. A. S. R. and Alexander v. & Deposit Co., 70 Atl. 209. To Md. the same effect Jaques, (Mass.) 14 Allen Sturtevant v. and 3 R. C. L. HALL WINDSOR SAYINGS BANK. deposit

The Falls defendant’s Bellows handled directly defendant; cashier. remitted to it idle to claim that it did know applying it was private funds to a debt. But it said that was no evi there warranting deposit dence the finding that this had hypothe cated may for be, finding debt. However this be rejected affecting without the result; enough for without re it, plain misappropriation participated mains make a to in exception Therefore the finding defendant. is unavail ing. Moody, 92 Vt. 218, Waterman 103 Atl. 325; Crampton Lamonda, 95 Vt. 42; Conant, 114 Atl. Platt v. Shields and supra. requests

[20, special The defendent filed for find 21] ings, severally excepted. which were refused and the defendant All they that is said of these brief is that “es were for ’’ bearing legal question sential facts on notice to the bank. to deposit Savings Bank, several Ottaquechee But refer which was not made a recovery, basis under such brief ing take also we no further time them. The defendant requests findings filed additional after tentative draft findings to had been submitted counsel. These were severally exceptions brief, refused and were saved. If under required say anything these, we are enough say it is they sought report to have the chancellor the evidence on which findings certain material They were, made. ad therefore, were discretion, dressed to his and was not error for him refuse Winship v. Waterman, them. 181; Admr. v. Vt. Allen’s Admr., 79 Vt. Cate, Allen’s Vt. Fife Gray, Atl. Colvin v. 116 Atl. 75. ^[22] There was no error admitting $2,800 note it. referring necessary the bank card note to show deposit Enright’s Falls on private the Bellows went debt. The card showed certain memoranda the nature admissions material subject the issues. were These to explanation, of course, say for the chancellor but was whether explana accepted not. tion to be And the explana cards and the evidence, given him as go weight as, were to tion thought them entitled to. whole, offered to show that Enright bought Junction at White River for Mr. estate, certain HALL SAVINGS BANK. WINDSOR of it, by the means money pay it, part and raised to for aor of $3,500 note this purpose the hereinbefore to. The referred was, offer this that the course, note was one show for ought pay, misappropriation estate and therefore was no it Story’s In the shown money him it. circumstances to use record, this line of evidence. the was not error to exclude it 19, 1903—the bought on property question in October was This more than day three $3,500 given. before the years Story’s Why this Enright qualified after executor. as Certainly, kept open long appear. estate had been does ready for dis for some time unnecessary, for it had been legatee died, residuary had meantime, In tribution. estate should elapsed time within which her had Enright this transac fully administered. undertaken Had illegal. would unwarranted and tion for the estate it have been days later, Enright in his ac probate filed court final But Henry gave Story; as executor and therein count L. in the the estate detail transactions involved settlement of the items then No refer property consisted. which prop the White River Junction is made this account to ence listed assets estate are $3,500 While the erty note. or included; any nor men account, is not this upon final decree based made the note. So the tion probate nor and neither court rendered; account made residuary legatee being transaction as ever confirmed They had so. opportunity the estate. to do On for no hand, other the account settlement amounted a deliberate his Enright’s part private on election treat the deal as whole original purpose affair —whatever his have been. This was remembered, his de before withdrawal must be all, it late the estate ac now too make posits as stated above. Though this purchase. for this was more responsibility cept years death, attempted three his never than before transaction, it an did administrators make estate nor when We they settled account executor Mrs. estate. Enright’s attempt purchase have said to make this for the illegal. In circumstances, estate would be it would amount devastavit, which for his bondsmen would unless be liable they could show that estate had of it. Empire benefit Surety Cohen, Rep. Co. 93 Misc. 156 N. Y. State S. WINDSOR SAVINGS BANK.

Thayer v. County Savings Bank, Erie App. Div. 808, affirmed, N. Y. S. 217 N. Y. N. E. 446. go So the enough defendant’s offer did not far to affect the result. It did not include a confirmation of transactions evidence that the estate had benefit of it. affirmed,

Decree and cause remanded. Opinion Rehearing* After decision case man was announced and the gone date down, had decree, but before the the final enrollment of brought the defendant petition under rehear G. L. 1567 ing in this In court. course the this prayer petition due of granted, by stipulation and counsel, rehearing of at was had the last November Term at Realizing importance Rutland. the of the questions presented, we have and carefully re-examined deliberately only questions reconsidered the whole case. The worthy deemed further discussion of are covered follows. what It is urged with much confidence that our holding as to the admissibility relating evidence purchase the to the White property River contrary Junction of the law subject. argument is that this defendant would be liable only in it participated case in a misappropriation and mis appropriation in a loss resulted to estate; that this transac tion (as rejected taken a whole evidence would tended show) to did not amount a to misappropriation, and did not re sult in loss, such property because the at White River Junction bought belonged for and to estate, worth the paid it; amount and that misappropriation loss did eighteen not come until some Enright months later when sold property and converted the avails. argument wholly This overlooks the basis our decision on Enright question: this had been ordered decree of the probate Story’s court to over the residue Mr. estate, which in very deposits in question, cluded the here to the executor Mrs. Story’s His only authority estate. over this was to residue comply Any order. other property by use of the him Story’s as executor of Mr. estate was unlawful. He had no estate, estate for that and the buy real White River Junction May rehearing *Opinion on filed v. WINDSOR SAVINGS YT.] of Mr. became and never was property never rati the deal had become such until estate. could not accepted given way in some lawful estate fied it. benefit of without aside, Moreover, the decree [25-28] An executor the estate. purchase for

authority to make this broadly, authority. Speaking limited representative of dis debts, and estate, pay its are collect the assets of duties Sowles, 64 Vt. Rich v. entitled. tribute those the residue only are those dele-’ powers 23 Atl. 15 L. R. A. His implied and he no gated statute; him the will and the so con necessarily to those powers except incidental such as 447, Ann. Cas. 372, 150 N. 168 Iowa W. Munger, In re ferred. in the though made contracts, this, his Beyond 1917B, 213. If estate, him alone. bind benefit and for the name a contract the estate the credit of attempts -pledge depends obligation funds discharge out estate sanction receive the estate upon being its beneficial to Reynolds-McGinness Field, Lovell v. 5 Vt. probate court. Sowles, Rich Green, 78 . Co credit of money pledge cannot borrow supra. He actually goes money If so borrowed repayment. for its estate may authorize its probate court estate, .the benefit Weeks, 53 Vt. National Bank v. Merchants repayment . cannot, nor can an executor An administrator R. 661. 38 A. real estate. will, purchase by authority given without v. 850; Wilson 600, 107 N. E. 266 Ill. Steidinger, v. Lamotte Howe, Abell v. 304, 134, 162; R. E. 49 A. S. 42 N. Mason, 158 Ill. inway which this lawful was no 43 Vt. 408. There consent in bank without the money be substituted could money. of those entitled

Story’s administrator ^[29] The defendant had no insists, as right of action it did against the defend before, that Mrs. unsoundness none. The plaintiff has ant, and therefore the assumption. adminis Mrs. argument lies in its false She right against of action the defendant. have a trator did rights Her residuary legatee her husband’s will. under was the representative A former of the passed her administrator. misappropriation in a joined with the defendant testator ad- circumstances, loss. In her of the trust to its these funds HALL WINDSOR 144 SAYINGS proceeded ministrator could in mala equity this fide holder legacy of her restitution compel of the sum which despoiled. trust had thus been Blodgett, Veile v. 270; Vance, note McBride v. Though 112 A. S. R. 732. her title to the during residue was prospective and administration, contingent, it equitable was an time, interest all Moore v. Brandenburgh, 248 Ill. 232, 733, N. E. 140 A. S. R. if invaded the misconduct of the equity executor lend will protect its aid Rowell, her interests. Rowell v. 122 Wis. N. W. discussing In subject, Dodge, this in Mr. Justice case “* * * cited, says, The equitable beneficial prop interest in all erty of a solvent legal during estate is distributees period whole they administration. If invaded, interest right, must Primarily have the that a court’s aid be invoked. ordinarily right sufficiently protected by power duty bring administrator to protect suit to reclaim any property When, estate. however, he himself allies wrongdoer, with the to, and serves as an obstacle instead of protector of, rights his que trustent, cestuis courts of o equity recognizing have n hesitation equitable interests give the latter as sufficient standing plaintiffs them as a suit to accomplish that which ought the administrator with diligence good faith pursue, will not.” but legatee much more does

How deserve the assistance of when, here, money appropriated court his has been after complete by pro- his to it has been made title the decree of the bate court. To plaintiff subrogated pay judgment. stepped

ment of He then Mrs. into the shoes of Story’s administrator, possessed became of all that the remedies Hodgson Myl. latter had, Shaw, 190; & C. R. L.C. could, every right far enforce latter and could reimbursement, including follow necessary to secure purchaser notice, of a property into the hands the trust person participating third breach proceed and to principal. Eq. 924; Rice, the trust Pom. Rice v. § Bonding Bank, American Co. National Ill. Mechanics’ A. note; S. R. Browne 97 Md. Deposit Co., 98 Fidelity & Tex. 80 S. Blake v. W. HALL v. WINDSOR SAVINGS Farmers’, etc., Bank, Nat. 13, 414; Traders’ 145 Mass. 12 N. E. Fidelity Ky. 671; Bank note Deposit Co., & 56 S. W. Surety (S. D.), Western Co. v. Waller 24 A. L. R. appear Nor is it made to is barred plaintiff’s that claim by lapse Story’s urged of time. It is administrator that Mrs. misappropriation brought knew all about when and before he plaintiff April 8, action on that inas- 1910; and Story’s that right plaintiff much seeks sub- as was Mrs. to, rogation knowledge; knowledge the administrator’s was his plaintiff right subject defenses as takes Story’s estate, began existed Mrs. run statute from time her facts, administrator ascertained when therefore the in suit has outlawed. That Mrs. administrator knew, when he

brought action bond, default, on is true of course. necessity But it does not of follow that he knew particular of this misappropriation or that the took making assets of the estate in circumstances it liable for their recovery. light When these facts came to not shown findings, and we cannot prior June, that it assume the time plaintiff when the learned of them. opinion subject Our former so only

[32-35] went far as necessary argument. to meet the accepted defendant’s assumption defendant’s that the statute of limitations six-year and that the governed, though plaintiff’s rule brief asserted that the application. Upon statute had no further con sideration we are plaintiff convinced that in his An administrator executor is a technical trustee. contention. Parmenter, Stickney 73; 74 Vt. 52 Atl. Pond v. Pond’s Estate, (N. S.) 79 Vt. 65 Atl. L. R. A. It well that, que irust, as between a established trustee and ceslui long apply claim, statute of limitations does not to bar a trust Estate, Evarts v. Nason’s trust continues. Vt. Ives, Wild, 17 Vt. Drake v. Kimball Catlin, Enright’s 427; Bigelow v. 50 Vt. 408. relation change account; estate when he funds of the did settled his long funds, held the held as a Hodges’ as he trustee. In re Estate, 725; 2 Wood, 63 Vt. Atl. Lim. 205; Thompson § McGaw, (Pa.) Watts 161. And repudiated until he knowledge brought trust and thereof que home to the cestui WINDSOR SAVINGS BANK.

trust, begin the statute of limitations not run. Davis would Eastman, Enright lived, Atl. Had he could not have protect invoked the statute himself from a suit Story’s Mrs. administrator. Nor can the re defendant, who fide, thereby ceived funds mala a trustee became ex maleficio, up set the statute a bar a cestui or subrogated Perry, one has become who thereto. §§ Croysdill, 198; Ernest v. DeG. F. & J. Ducketl v. National Bank, Mechanics’ 86 Md. 63 A. R. Atl. S. Bank, Blake v. Traders’ Nat. Mass. 12 N. E. 414. may interposed in eases, laches but defense question kind is of that before us. no show that the plaintiff defendant now has exhausted his remedies insists findings against En- do right’s estate, this, and that until he cannot recover done original In this point from the defendant. brief dis caption cussed under the “Demurrer.” So we then understood pleading, only, raised, and we so treated question that a Assuming that the defendant is opinion. it in our entitled on unavailing. rehearing question presented, raise the now surety’s gave general governing opinion In rule ob we ligation respect, is another and a better reason in this but there require why plaintiff proceed cannot first defendant Enright’s Enright joint estate; and the defendant were They joined in an embezzlement trust funds. tort-feasors. equally culpable, no offending persons All are there so all secondary liability participants, between the primary and Bank, Duckett v. National Mechanics’ equally amenable. Bonding Bank, Co. National Mechanics’ supra; American circumstances, equities In the defendant has supra. these no respect. plaintiff was bound that the In be worth while to call attention this connection findings subject. just how the stand on this is no There ex- finding any attempt made press to secure restitution from estate. But chancellor refers tran- to the script part findings. makes them and exhibits and finding may be that this was intended as a that Mrs. against Enright’s presented administrator a claim estate which $6,944.31, was allowed at on which he dividends received amount- ing $3,387.34, by plaintiff’s all as shown If Exhibit No. 27. GOMEZ & CO. v. HARTWELL.. intended, to a reference exhibit did not amount finding. The result is that nothing by takes the rehear- ing, and the cause is remanded ivith costs. full J. Gomez Co. v. W. &

Ellis Hartwell. W.

May Term, 1922. J., Powers, Present: C. Watson, and JJ. Miles, Taylor, Slack, Opinion filed October Negotiable and

Bills Instruments Act—Burden Notes— of Proof Concerning Delivery Conditional Destruction —Wilful of Documentary Presumptions Evidence— Inferences — Principal Agent Agent— and Declarations —Acts Cou,rt— Question Agency When Jury When for Necessity Exception to Secure Review—When Decision Qtwstion Preliminary Agency Trial Court on Review of able—Immaterial Evidence—Admission of Certificates of A Party Stock—When Acts Are Admissible. Negotiable Act, (G. 2886), L. in an § Instruments Under check, signed by action on a defendant claimed him conditionally, have been has the burden show- delivered delivery condition, ing and failure of such the de- conditional being affirmative in character. fense documentary presumption, which wilful destruction 2. The gives rise, produced evidence document if would be destroys it, injurious place who to the one does not take the regarded evidence, merely but is matter of inference applicable weighing dispute. question the evidence presumption application, spoiliation has no where 3. Such by alleged partner, wholly partnership business, outside of the being any way without the connected there- conniving with, spoiliation as none but those at the act by any arising inference affected therefrom.

Case Details

Case Name: Hall v. Windsor Savings Bank

Court Name: Supreme Court of Vermont

Date Published: Jun 2, 1923

Citation: 121 A. 582

Court Abbreviation: Vt.