Akin v. Warner

• Decision Date: 06 November 1945
• Citation: 63 N.E.2d 566,318 Mass. 669
• Parties: AKIN v. WARNER (two cases).
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

318 Mass. 669

63 N.E.2d 566

AKIN

v.WARNER (two cases).

Supreme Judicial Court of Massachusetts, Berkshire.

Nov. 6, 1945.

Two suits in equity by Eleanor E. Akin against Milton B. Warner, administrator of the estate of William L. Tracy, deceased, for an accounting. From a final decree dismissing the bill in each case, the plaintiff appeals. The cases were consolidated for presentation to the Supreme Judicial Court.

Decrees reversed and decrees entered for plaintiff.Appeals from Superior Court, Berkshire County; Burns, Judge.

Before FIELD, C. J., and QUA, DOLAN, WILKINS, and SPALDING, JJ.

W. J. Donovan, of Adams, and W. A. O'Hearn, of North Adams, for plaintiff.

M. B. Warner, of Pittsfield, for defendant.

SPALDING, Justice.

These are two bills in equity, in each of which the plaintiff seeks an accounting from the defendant in his capacity as administrator of the estate of William L. Tracy, hereinafter referred to as Dr. Tracy.In one of the bills, an accounting is sought with respect to moneys and securities which the plaintiff alleges she entrusted to Dr. Tracy for safekeeping and investment. an accounting for funds similarly entrusted an accounting for funds similary entrusted to Dr. Tracy by her mother, now deceased, whose interest the plaintiff now owns by virtue of an assignment. The cases were referred to a master whose report was confirmed by interlocutory decrees. From a final decree dismissing the bill in each case, the plaintiff appeals.

The pertinent facts found by the master are these: Dr. Tracy was a successful physician and surgeon who resided in Pittsfield where he had practised his profession since 1910. The plaintiff, who resided in Johnsonville, New York, met Dr. Tracy in 1921 when he became acquainted with her father and mother. Thereafter he visited at the Akin home and became a close friend of the plaintiff's father and mother. This friendship continued down to the times of their deaths in 1925 and 1927 respectively. The plaintiff's feeling toward Dr. Tracy was ‘that toward a beloved and deeply respected uncle of whom she stood somewhat in awe’-a feeling that continued until his death in 1941. The plaintiff, who was unmarried and in her early thirties at the time when she became acquainted with Dr. Tracy, had ‘had no particular experience in, or knowledge of, business finance or the stock market, but knew as much about them as the average well educated American woman. She was a woman not lacking in common sense, and in matters of ordinary every day living, she had plenty of will power.’

In 1922 Dr. Tracy began to suggest to the plaintiff and her mother the possibility of helping them to ‘make money in the stock market.’ (He had had extensive dealings in the stock market and in one year his purchases and sales with one brokerage concern amounted to over $4,000,000.) Mrs. Akin and the plaintiff in 1923 and 1924 respectively began to turn over money and securities to Dr. Tracy for purposes of investment. In the case of Mrs. Akin this continued until her death in April, 1927. The plaintiff's advances of funds to Dr. Tracy continued until 1932. Thereafter he continued to handle and manage her account, buying and selling securities and making remittances of principal, dividends and income until April 21, 1941. After the death of Mrs. Akin, Dr. Tracy treated funds of hers still remaining in his hands as belonging to the plaintiff, who was her sole legatee, and mingled them with the plaintiff's securities or the proceeds thereof.

At various times while Dr. Tracy was handling the funds of the plaintiff and her mother, he reassured them that they had no cause ‘to worry,’ that he would ‘be careful,’ that he was investing in safe securities, and that their principal would be safe. There are other findings from which it can be inferred that some of the investments made by Dr. Tracy were for speculative purposes and that the plaintiff and her mother knew of this. But notwithstanding this, the findings establish that for the most part the funds were entrusted to him for purposes of investment and that he so understood. From time to time Dr. Tracy advised both Mrs. Akin and the plaintiff not to talk much about their financial affairs to others, but he did not exert undue influence or any other improper method to dissuade them from taking advice from others with respect to their business or financial transactions. Although the plaintiff after her mother's death was kept advised by Dr. Tracy as to the course of his dealings, she ‘at all times relied on . . . [his] judgment in dealing with her advances and the securities purchased thereby, and never objected to or criticized his dealings.’ The plaintiff after her mother's death had no near relatives nor did she have any business counsellors outside of Dr. Tracy. An accounting was had between Dr. Tracy and Mrs. Akin and the plaintiff in 1925. Thereafter no accounting was ever given to Mrs. Akin during her lifetime and none was ever given to the plaintiff until that of April 21, 1941, hereinafter referred to. Dr. Tracy kept no written statements which showed with any degree of accuracy what funds were received from the plaintiff or her mother and what he did with them. It does not appear that he had any bank account standing in his name as trustee, and her moneys advanced by the plaintiff and her mother were for the most part mingled with his own in his personal bank account.

In the spring of 1941, due to ill health, Dr. Tracy became despondent. On April 21, 1941, at Dr. Tracy's request the plaintiff visited him at his office at Pittsfield. During this visit he produced what he called a ‘final statement’ which he had prepared for her; he informed her that he would like to have her sign it and that he was turning over to her the securities and check mentioned in the instrument. No other person was present. The plaintiff signed two copies of the statement, substantially in duplicate, which had been previously signed by Dr. Tracy before a notary two days earlier, on April 19. Each retained a copy. Material portions of these statements, which were not under seal, are as follows: ‘This is to certify, that the Investment account, of Miss Eleanor E. Akin * * * which account Dr. Wm. L. Tracy has been directing * * * has been at this date closed; and Dr. Tracy, will turn back to Miss Akin on April 21st/41, all the securities, interest, funds and cash balances and all other property which Dr. Tracy has held in custody for Miss Akin.’ After listing the securities and a check to be turned over, the statements conclude with the words ‘This squares the account.’ The securities and check mentioned in the statements were then turned over to the plaintiff.

The plaintiff remained on friendly terms with Dr. Tracy until his death by suicide on August 2, 1941. In the interval between April 21 and the time of his death, the plaintiff saw Dr. Tracy but once and then only for a short time on the street. In June she made an attempt to see him at his office but he told her that he was too busy to see her.

The master, after reciting in detail the various financial transactions which took place between Dr. Tracy and Mrs. Akin, concluded that as of the date of the latter's death Dr. Tracy had accounted for all but $1,260.92. He found that the defendant owes the plaintiff this sum with interest at six per cent from the date of Mrs. Akin's death (April 27, 1927) to the date of the filing of the report (June 5, 1944), or $2,548.74. With respect to money and securities advanced to Dr. Tracy by the plaintiff between 1924 and 1932, the master concluded that (unless the document dated April 21, 1941, constituted a release or an ‘account and satisfaction’) Dr. Tracy had failed to account for $17,879.02 and that the defendant owes that sum to the plaintiff with interest at six per cent from April 21, 1941, to the date of the report, or $21,231.34.

The only objection taken by the defendant to the master's report, which became an exception (Smith v. Smith, 313 Mass. 687, 689, 48 N.E.2d 920), is to the ultimate finding in each case that the defendant is indebted to the plaintiff. There is nothing in the master's findings that would cause us to doubt the correctness of his computation of the amount due the plaintiff in either case. The defendant does not challenge the computation, as such, but asserts that as matter of law on the facts found nothing was owed to the plaintiff in either case.

The principal question for determination in each case is whether or not there was a fiduciary relationship between the parties. The master made no express finding on this question, as he might well have done (see Seemann v. Eneix, 272 Mass. 189, 191, 172 N.E. 243;Ryder v. Donovan, 282 Mass. 551, 554, 185 N.E. 473) inasmuch as it was a mixed question of law and fact, but we are of the opinion that the subsidiary facts contained in...