Knowlton v. Fourth-Atlantic National Bank

271 Mass. 343 | Mass. | 1930

Sanderson, J.

This suit was first brought to this court by report at the request of all parties upon the pleadings, three reports of the master, exceptions thereto, and appeals from interlocutory decrees and orders, “Such final decree is to be entered as the plaintiff upon the record is entitled to.” By the rescript in that case the interlocutory decree overruling the exceptions' of all parties and confirming the report was affirmed in all respects except as to the defendant’s exception numbered two, and as to that the decree was reversed. The bill was ordered to be dismissed with costs as to all defendants other than The Fourth-Atlantie National Bank, and as to it the case was remanded to the Superior Court for further proceedings not inconsistent with the opinion. 264 Mass. 181. The exception referred to was to the exclusion of testimony of Chamberlain’s attorney relating to statements made to him by his client. After rescript two decrees were entered, • the first dismissing the bill as against the defendants Breck individually, Breck-Robinson Nursery Company and Joseph Breck and Sons’ Corporation, and the second ordering that the case be recommitted to the master to hear the testimony previously excluded and to report his findings respecting the liability of the defendant and also to report the evidence received on this last recommittal. It was further decreed that if “the Fourth-Atlantie National Bank, is liable to the plaintiff, then the master’s account of the damages already found by him in his former report shall stand.” The bank, which will be referred to as the defendant, appealed from both of these decrees.

The master, after hearing testimony in compliance with the order of recommittal and considering it by itself and also in connection with all of the evidence in the case, reaffirmed the findings made by him in his earlier report and adopted them as his findings. To this report the defendant saved two exceptions, (1) that upon all the evidence the findings of the master are incorrect, and (2) that upon all the evidence the master should have found that the plaintiff Chamberlain and the executrix of his will have failed "to show that any contract was entered into between Chamberlain and the defendant. These exceptions were overruled and a final decree entered in favor of the plaintiff. From both of these decrees the defendant appealed.

The master in one of his earlier reports made specific findings as to the contract between Chamberlain and the defendant, and in accordance with the order of court reported so much of the evidence as bore on those matters. But the case first came to this court in accordance with the agreement of all parties without this evidence. One of, the exceptions then saved by the defendant and appearing in the previous record was to the refusal of the master to find that no contract was entered into between Chamberlain and the defendant. The consent of the defendant to have the case reported without the evidence on that issue was a waiver of the contention that there was no sufficient evidence of a contract between Chamberlain and the bank in so far as it depended on the evidence made a part of the master’s earlier report. Tilson v. Crane Brook Co. 269 Mass. 493, 495. But now, in view of the fact that the master has heard additional evidence to be weighed with that previously considered by him, the question will be decided upon the evidence before the court in the present record although the additional evidence bore only on the weight to be given to Chamberlain’s testimony. See Malden & Melrose Gas Light Co. v. Chandler, 211 Mass. 226, 227. The findings of the master are not to be set aside unless plainly wrong. When he has heard oral testimony his decision as to the weight to be given to it is seldom disturbed. Parsons v. Parsons, 230 Mass. 544, 552.

We have examined all of the evidence in the present record and are of opinion that it amply warranted the finding that a contract was made between Chamberlain and the defendant acting through its authorized agent in the terms set forth in 264 Mass, at pages 189 and 190. No good purpose would be served by reciting or summarizing this evidence. The contradictions in testimony and the other matters to which our attention has been directed by the defendant do not show that the master was wrong in his conclusion on this issue or justify us in reaching a different conclusion. Under the contract made, the defendant “held the legal title to the bulbs upon a trust for the purpose of liquidating the debt of the plaintiff to it, of reimbursing itself for the expenses of the plan, and of eventually returning the bulbs unsold and any surplus money realized from the sale of bulbs.” 264 Mass. 181,194.

The defendant further contends that if a trust was created it is not liable for any breach thereof; that it acted in good faith with sound business judgment in appointing an agent to cultivate and dispose of the bulbs, and that it should not be held hable for negligence or wrongdoing of such agent. On this phase of the case ah the evidence does not purport to be reported. All of the facts found by the master bearing upon this issue were before the court when its decision in 264 Mass, was rendered. That decision is binding on the parties on all issues then passed upon. Boston Bar Association v. Casey, 213 Mass. 549, 555. Taylor v. Pierce Brothers, Ltd. 220 Mass. 254, 255. The defendant at the former hearing made the contention that there was no breach of trust. The bill was for an accounting, and the answer of the defendant admitted that a demand for an accounting was made upon it by Chamberlain and that it had denied his right thereto. Such a repudiation of its obligation was a breach of trust. The master found that in 1916 and subsequent years the number of bulbs constantly decreased; that the evidence did not account for this shortage by sales or by adverse soil or by weather conditions. He states: "... it [is] difficult to account for the large decrease in bulbs except upon the theory that there was some careless or improper handling or cultivation, but I cannot from the evidence specify its nature.” No attempt was made by the Breck-Robinson Nursery Company, to which the bulbs had been delivered, to segregate them in planting or cultivating, or to keep separate the receipts from their sale. These, with other bulbs, were carried in an account called the “Gladioli Account” through 1920, when Breck, who was found to be acting for the defendant throughout, directed that this account be closed. The defendant does not now offer to account for the bulbs or their proceeds or value. It cannot be relieved from its obligations as a trustee by relying upon the assurance from its agent or attorney that no trust was created or by relying upon the denial of its agency by the corporation entrusted with the bulbs. The plaintiff had the burden of proving that a trust relationship as to the bulbs existed between Chamberlain and the defendant, but, that being established, the defendant had the burden of proving that it had discharged its duties as trustee with reasonable skill, prudence and judgment, including the duty to account to the beneficiary at reasonable times and to exercise a proper supervision over the activities of its agent or agents appointed to cultivate, care for and market the bulbs. See Little v. Phipps, 208 Mass. 331; Ashley v. Winkley, 209 Mass. 509, 525; Boston Safe Deposit & Trust Co. v. Wall, 254 Mass. 464, 469. It does not appear that the defendant at any time since the trust was established in 1915 has sought to regain possession of the bulbs or to have an accounting from its agent entrusted with their possession, cultivation and sale, or that it has objected to any failure on the part of the agent to keep a separate account of these bulb transactions. It has contended throughout this litigation that no trust existed, and that it has no obligation to account. In these circumstances the defendant’s good faith in selecting an agent is not a defence.

The conclusion of the master and of the trial judge to the effect that the defendant had failed to show that it had performed its duty as trustee cannot be said to be unjustified. The contention of the defendant that the agreement is unsupported by any consideration was raised by exception to the master’s report when the case was here before and has no merit. The trust established is in the nature of an equitable mortgage, 264 Mass. 181,194, and required no consideration to support it. Stone v. Hackett, 12 Gray, 227, 230, 231. The contention that the contract is invalid because its terms are uncertain cannot be maintained. The defendant cannot on this ground be relieved from its obligation to account for property delivered to it and for which it assumed responsibility. The defendant contends that the relief granted by the decree is not within the scope of the bill. This contention seems to have been decided adversely to the defendant by■ what was said in Knowlton v. Fourth-Atlantic National Bank, 264 Mass. 181, 195, and we are of opinion that the allegations of the bill relating to the contract and to a demand for an accounting and to a refusal to account set out a cause for relief in equity against the defendant. Spear v. Coggan, 223 Mass. 156, 157.

The conclusions reached in the former decision as to the liability of Charles H. Breck, Joseph Breck and Sons’ Company and Breck-Robinson Nursery Company cannot be reopened. As to these defendants the case is distinguishable in its facts from Donnelly v. Alden, 229 Mass. 109, and Tingley v. North Middlesex Savings Bank, 266 Mass. 337. The sum in which the defendant was indebted to the plaintiff, in case it should be found liable, was determined by the former decision, 264 Mass. 181, 197, and is incorporated in the final decree dated December 12, 1929, from which the present appeal has been taken. In this decree interest on the principal sum due was computed from October 31, 1921, to the date of the decree. That decree should now be modified so as to include in addition to the interest therein ordered to be paid interest on the principal sum of $9,798.89 from December 12, 1929, the date of that decree, to the date of final decree after rescript, and as so modified is affirmed with costs.

Ordered accordingly.