James Holly v. Domestic and Foreign Missionary Society of the Protestant Episcopal Church

• Decision Date: 25 February 1901
• Docket Number: No. 138,138
• Citation: 21 S.Ct. 395,45 L.Ed. 531,180 U.S. 284
• Parties: JAMES HOLLY, Petitioner , v. DOMESTIC AND FOREIGN MISSIONARY SOCIETY OF THE PROTESTANT EPISCOPAL CHURCH and E. Walter Roberts
• Court: U.S. Supreme Court

180 U.S. 284

21 S.Ct. 395

45 L.Ed. 531

JAMES HOLLY, Petitioner,

v DOMESTIC AND FOREIGN MISSIONARY SOCIETY OF THE PROTESTANT EPISCOPAL CHURCH and E. Walter Roberts.

No. 138.

Argued December 21, 1900.

Decided February 25, 1901.

This was the case of a bill in equity filed in January, 1891, in the circuit court of the United States for the southern district of New York, by James Holly, a citizen of the state of Pennsylvania, against the Domestic and Foreign Missionary Society of the Protestant Episcopal Church in the United States of America, a corporation of the state of New York, and E. Walter Roberts, treasurer of the same.

The case came to issue on bill, answer, and replication. Evidence was adduced by the respective parties, and certain exhibits and stipulations were filed.

The principal facts disclosed by the pleadings and evidence were these:

On December 23, 1887, the last will of Rev. James Saul, D. D., was duly proved, and letters testamentary thereon granted by the register of wills in and for the city and county of Philadelphia to Rev. Benjamin Watson, D. C., and Henry C. Thompson, executors named in said will. In and by said will the testator bequeathed the whole of his estate to 'the following institutions and in the following proportions, viz., to the Domestic and Foreign Missionary Society of the Protestant Episcopal Church in the United States of America, three fourths of the whole of my said estate, conditioned that the amount thus bequeathed shall be appropriated by said society in equal proportions of one third to domestic missions, one third to foreign missions, and one third to the benefit of the colored people in the southern or formerly slave states for the support of schools and missions.' The remaining one fourth of the whole of the said estate he gave and bequeathed to the Theological Seminary near Alexandria, Virginia. By a codicil the bequest to the theological seminary was revoked, the testator having substituted therefor a donation of 100 shares Pennsylvania Railroad stock, and which he had transferred to the trustees of the seminary; and by a later codicil the testator further gave and devised to the Domestic and Foreign Missionary Society of the Protestant Episcopal Church in the United States of America all the residue of his estate.

Neither the amount of the estate, nor the property of which it consisted, was mentioned in the will or codicils; but it appeared that, in addition to about $2,493.03 cash, the testator was possessed of bonds of the North Pennsylvania Railroad Company and of the United Railroads of New Jersey, and in their account filed in the orphans' court of Philadelphia county the executors charged themselves with $17,268.03 as the amount of the estate. This account was confirmed on November 5, 1889, showing a balance in the hands of the executors of $14,927.54, which was awarded by the court to the Domestic and Foreign Missionary Society.

On June 19, 1890, the executor, Henry C. Thompson, called at the office of the defendant society in New York city, and handed to Roberts, the treasurer, a memorandum showing the above balance $14,927.54 awarded to the society by the decree of the orphans' court, from the Saul estate, and $650 dividends received since and not included in the account, making a total of $15,577.54. For this sum Thompson gave a check in the following words and figures:

$15,577.54.

Philadelphia, June 19, 1890.

The Union Trust Company,

Nos. 715, 717, 719 Chestnut Street.

Pay to the order of the Domestic and Foreign Miss. Soc. of the P. E. Church fifteen thousand five hundred seventy-seven 54/100 dollars.

H. C. Thompson.

No. 623.

Roberts, the treasurer, handed Thompson a receipt, as follows New York, June 19, 1900.

Received from executors estate of James Saul, late of Philadelphia, Pennsylvania, fifteen thousand five hundred seventy-seven 54/100 dollars ($15,577.54).

George Bliss, Treasurer,

per E. Walter Roberts,

Assistant Treasurer.

Thompson's check was deposited by Roberts, treasurer, in the Bank of New York, for general account of the Foreign and Domestic Missionary Society of the Protestant Episcopal Church in the United States of America, by which bank the check was forwarded for collection to the Bank of North America of Philadelphia, and was to that bank paid, onJune 21, 1890, by the Union Trust Company of Philadelphia.

The proceeds of this check were deposited in the general bank account of the missionary society, and were applied, with other moneys of the society, to domestic, foreign, and colored missions, before the society was notified of the claim asserted in the bill of complaint.

In May, 1890, James Holly, a resident of Philadelphia, bought at auction for $12,000 a house and lot situated upon North Fifteenth street in that city. He took the title papers to H. C. Thompson, who had previously been employed by him, and requested Thompson to have proper conveyances made. As some of those interested in the sale resided elsewhere there was some delay in getting the papers signed. Finally, on June 19, 1890, Holly called on Thompson, who told him that the papers were ready, and asked for a check to meet the purchase money. Thereupon Holly gave him a check in the following form:

Philadelphia, June 19, 1890.

The Fidelity Insurance, Trust & Safe Deposit Co., pay to Henry C. Thompson, attorney, or order, twelve thousand dollars.

$12,000.

James Holly.

And Thompson gave Holly a receipt, as follows:

Philadelphia, June, 19, 1890.

Received from James Holly twelve thousand dollars, and J. A. Freeman's receipt for $200, to be applied to purchasing house, No. 643 North Fifteenth street.

$12,000.

(Signed) H. C. Thompson.

Holly never afterwards saw Thompson, but on July 15, 1890, was informed by Morgan, one of the vendors of the property purchased, that Thompson was lying at a hospital in Jersey City, where he had attempted suicide.

Taking alarm, Holly consulted Mr. Burton, as an attorney, and it was discovered that Holly's check on the Fidelity Insurance, Trust & Safe Deposit Company in favor of Thompson for $12,000, dated June 19, 1890, had been by Thompson that day deposited in the Union Trust Company, Philadelphia, and that, by a check of June 19, 1890, in favor of the Domestic and Foreign Missionary Society of the P. E. Church in the United States of America, Thompson had drawn out $15,577.54, leaving a balance in his favor of $72.41.

According to the finding of the circuit court this check in favor of the Domestic and Foreign Missionary Society was, to the extent of $10,028, paid by the Union Trust Company out of the moneys realized from Holly's check to Thompson; and that court decreed against the missionary society in favor of the complainant for that amount. 85 Fed. Rep. 249.

Upon appeal the decree of the circuit court was reversed by the circuit court of appeals for the second circuit, and the bill directed to be dismissed (34 C. C. A. 649, 92 Fed. Rep. 745); and thereupon the case was brought to this court by a writ of certiorari.

Messrs. John G. Johnson, Matthew V. Simpson, and Cephas Brainerd for petitioner.

Messrs. Julien T. Davies and Herbert Barry for respondent.

Mr. Justice Shiras delivered the opinion of the court:

This is a case in which a court of equity is called upon to decide upon which of two innocent parties is to fall a loss caused by the dishonesty of a third person. The relation that existed between Thompson and the missionary society was that of executor and legatee; between Thompson and Holly, that of attorney and client. As between themselves, Holly and the missionary society were absolute strangers.

Our examination of the pleadings and evidence fails to show any such dereliction of duty or supine negligence on the part of the missionary society in demanding and enforcing payment of the Saul legacy as would show, or even tend to show, that the society knew, or had reason to believe, that Thompson was insolvent or had been guilty of any misappropriation of the property or funds of the Saul estate. It is true that the legacy was not paid as promptly as the society had reason to expect, but there was nothing unusual about such a delay.

The very fact that Rev. Dr. Saul had selected Thompson to be one of his executors authenticated him to the society as a trustworthy person, and while it is true that Rev. Mr. Watson, who was a co-executor, in letters answering inquiries by the secretary of the society in April and May, 1890, admitted that Thompson was dilatory in settling the estate, there was nothing to justify suspicion on the part of either Mr. Watson or of the society that there was anything wrong in Thompson's dealings with the estate. Accordingly we are fully satisfied that, when Thompson called upon the society at the New York office, on June 19, 1890, and paid the amount shown to be due the society by the account of the executors in the orphans' court of ...