Balch v. Detroit Trust Co.

• Decision Date: 08 October 1945
• Docket Number: No. 51.,51.
• Citation: 20 N.W.2d 138,312 Mich. 146
• Parties: BALCH v. DETROIT TRUST CO. et al.
• Court: Michigan Supreme Court

312 Mich. 146

20 N.W.2d 138

BALCH

v.DETROIT TRUST CO. et al.

No. 51.

Supreme Court of Michigan.

Oct. 8, 1945.

Appeal from Circuit Court, Wayne County, in Chancery; William Friedman, Judge.

Petition by Frederick A. Balch, surviving trustee under an indenture of trust dated April 25, 1911, between Mary E. Balch and others, against Detroit Trust Company, Elizabeth Balch Ranney, trustee, and George Balch, trustee, relating to disposition of trust funds. From an adverse order, petitioner appeals.

Order affirmed.

Before the Entire Bench.

Charles F. Delbridge and Charles P. Dunn, both of Detroit, for plaintiff-appellant, Frederick A. Balch, individually and as sole surviving trustee.

Thomas G. Long and Charles C. Andrews, both of Detroit, for appellees.

Butzel, Eaman, Long, Gust & Kennedy, of Detroit for defendant-appellee, Detroit Trust Company.

Hill, Hamblen, Essery & Lewis, of Detroit, for Detroit Trust Co. and Frederick J. O'Donnell as executors of will of George C. Balch, deceased.

BUSHNELL, Justice.

After the death of George W. Balch in 1911, his widow, Mary E. Balch, and his four children, Kate Balch Mattoli, Elizabeth Balch Ranney, George G. Balch, and Frederick A. Balch, as trustees under an ‘agreement of trust,’ united in appointing defendant Detroit Trust Company as their agent. The Balch trust terminated upon the death of the widow, Mary E. Balch, on June 18, 1932. Soon thereafter, plaintiff herein, Frederick A. Balch, one of the trustees, filed ab bill of complaint for an accounting, naming as defendants the other surviving trustees and the agent. This matter was finally heard in 1934 and a decree was entered by the late Judge Harry B. Keidan in accordance with a settlement agreement between the parties, dated April 18, 1934.

In the accounting proceedings it was shown that at the time of the closing of the banks of Detroit by proclamation of the Governor in February of 1933, defendant trust company, as agent of the trustees, had on deposit in a fiduciary account in the First National Bank-Detroit, $25,036.83, one-half of which had been paid or applied by the receiver of the bank against an indebtedness, and the remainder was impounded and unavailable.

The settlement agreement provided in part as follows: ‘The Detroit Trust Company agrees to collect and receive such funds to the extent to which the same may be collectible from said First National Bank-Detroit and in full from said Detroit Savings Bank, subject only to solvency thereof, and to promptly pay over all sums so collected together with a pro rata portion of any interest so collected to said Balch Trustees, all without further charge by said Detroit Trust Company for services and expenses in so doing. Said sums so collected shall be paid over to said Balch Trustees by Detroit Trust drawing its check payable to said three Trustees or the survivors or survivor and delivering the same to any of said Trustees.'

The liquidation and distribution of the trust assets had not been completed at the time of the death of Elizabeth Balch Ranney. Frederick A. Balch, plaintiff herein, as sole surviving trustee, filed a further petition in the same cause on June 20, 1940, seeking further relief in the liquidation proceedings. As a result of this petition a supplemental decree was entered by Judge Keidan on July 15, 1940, which stated in part that, ‘all of the parties to this proceeding and all of the parties interested in the property now held in said safe deposit box and in said Trust and the accounting therefor and in the undistributed residue of the Trust Funds thereof, appearing and consenting to the following Order and Supplemental Decree * * * it is ordered, adjudged and decreed,’ etc.

This supplemental decree contains detailed provisions for completion of the distribution of the assets of trust. When it was entered, the balance in the fiduciary account in the First National Bank-Detroit had been reduced to $5,085.58, and plaintiff Balch was ordered forthwith, ‘upon obtaining access to said safe deposit box, (to) pay to the following persons the following amounts in cash and cause to be assigned to each of said persons the following face amounts of the remaining Five Thousand Eighty-five and 58/100 Dollars ($5,085.58) of impounded bank balance with the First National Bank-Detroit, to-wit:’ One-quarter to plaintiff Balch, one-quarter to the executors of the will of Elizabeth Balch Ranney, deceased, one-quarter to the executors of the will of George G. Balch, deceased, one-eighth to Agestino Mattoli, and one-eighth to Giorgio Mattoli, the children of Kate Balch Mattoli, deceased, or their attorneys in fact.

It subsequently developed that $5,085.58 was not the correct balance but that it was in fact $4,974.16. After the entry of the supplemental decree plaintiff Balch's attorney addressed a letter to the trust company under date of August 2, 1940, which referred to the supplemental decree, and requested that certificates of beneficial interest be issued to the beneficiaries named above, and in the same proportion, covering the corrected amount just stated. Such certificates were issued in which the trust company, as agent, agreed to pay the beneficiaries therein named ‘his (her) proportionate share of any and all funds released by First National Bank-Detroit in further liquidation of said Fiduciary Account as soon as reasonably possible after such liquidation payment or payments have been received.'

The full amount of the bank balance was received by the trust company on November 1, 1940, distributed to the beneficiaries and the certificates of beneficial interest were surrendered and cancelled. Two years later, the trust company received from the receiver of the bank an ‘Interest Claim Settlement Dividend.’ This dividend covered interest calculated over the period while funds were...