Cronan v. Comm'r of Banks 

• Decision Date: 12 January 1926
• Citation: 150 N.E. 193,254 Mass. 444
• Parties: CRONAN v. COMMISSIONER OF BANKS et al. CRONAN et al. v. SAME.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

254 Mass. 444

150 N.E. 193

CRONAN

v.COMMISSIONER OF BANKS et al.

CRONAN et al.

v.SAME.

Supreme Judicial Court of Massachusetts, Suffolk.

Jan. 12, 1926.

Case Reserved from Supreme Judicial Court, Suffolk County.

Suits by Annie G. Cronan and by John F. Cronan and others against the Commissioner of Banks and others. On reservation by single justice on master's report, exceptions thereto, and stipulation and agreement as to facts. Decrees for plaintiffs.G. M. Palmer and A. E. Pillsbury, both of Boston, for plaintiffs.

D. L. Smith, R. W. Nason, and H. O. Cushman, all of Boston, for defendants.

CROSBY, J.

In these suits the plaintiffs ask to have certain deposits made by them declared to be deposits in the savings department of the Cosmopolitan Trust Company.

[1] The cases are before us on a reservation by a single justice of this court upon the pleadings, the master's report and exceptions thereto, and a stipulation and agreement as to facts. The evidence is not reported; and as the findings of fact made by the master are not mutually inconsistent or contradictory or plainly wrong, they are final. Glover v. Waltham Laundry Co., 235 Mass. 330, 334, 127 N. E. 420;Goldband v. Commissioner of Banks, 245 Mass. 143, 146, 139 N. E. 834.

The facts found or agreed by the parties are as follows: The plaintiff John F. Cronan, during the latter part of June, 1920, had a conversation with one Pinksohn, a vice president of the trust company, who urged him to make a deposit in the commercial department of the company, which Cronan declined to do. Soon thereafter Pinksohn met him again and stated that the company had opened a savings department, and described the advantages of deposits in the savings rather than in the commercial department; and also told him that the company had $17,000,000 on deposit. Later, Cronan, who desired to make a permanent investment of money for himself and wife, decided that he would deposit it in the savings department, and on July 13, 1920, he went to see Pinksohn at the bank but found he was absent. He saw, however, Max Mitchell, the president, who described the advantages of an investment in the savings department. Thereupon, on that day, Cronan made two deposits in the savings department, one for $7,000 in the name of his wife (the plaintiff Annie G. Cronan), and one for $50,000 in their joint names. As evidence or security for such deposits two certificates were given him, copies of which are printed in the record. By agreement with Mitchell, the interest on these deposits was to be 5 3/4 per cent. and the deposits were to remain at least six months. The certificates recited that the deposits should not be withdrawn except on ‘thirty days' notice.’ On August 2, 1920, alarmed by reports which Mr. Cronan had seen respecting the financial condition of the company, he and his wife gave notice of an intention to withdraw the deposits; but later he was assured as to his investment by notices he saw of the purpose of the company to increase its capital, and open a branch office, and he did not therefore insist upon the notice of August 2. On September 25, 1920, the commissioner of banks took possession.

In addition to the foregoing and other facts found by the master, it is agreed by the parties that in June, 1920, the company planned a campaign to solicit new deposits; that about this time Mitchell told Pinksohn that the directors had voted to issue certificates of deposit bearing interest at 5, 5 1/2, and 5 3/4 per cent. per annum, and suggested that it would give him (Pinksohn) a chance to obtain new business. Pinksohn testified that at this interview Mitchell said:

‘That the directors had a meeting the previous day and had voted to issue certificates of deposit for special savings accounts and they had in their vote designated different rates, and he thought it would be an incentive for me to get busy in a campaign to bring a lot of new deposits to the bank.’

Between June and September, 1920, when the commissioner took possession, Pinksohn secured between $300,000 and $400,000 of new deposits, among them being the funds of the plaintiffs. Substantially all of this sum, including the $57,000 deposited by the petitioners, was secured upon Pinksohn's representations that such a deposit was ‘a savings deposit’ or ‘special savings deposit.’ The plaintiffs were induced by this statement and by the further representations made by Pinksohn to them that the bank possessed good assets of $17,000,000 and that it was in a sound and prosperous condition, and by the representations of Mitchell, to make the deposits to the amount of $57,000. These representations were false, as the bank at that time was insolvent. Mitchell and Pinksohn both agreed with the plaintiffs that the money deposited by them would be put in the savings department; they knew that Mr. Cronan had been frequently solicited to make a deposit in the commercial department and had each time refused; they also knew that both plaintiffs believed they were depositing in the savings department, and that without the agreement made by the officers of the company so to place their funds neither of them would have made any deposit in either department of the company. The plaintiffs did not know that their funds had not been placed in the savings department until the commissioner refused to permit them to prove their claims as savings department deposits, except so far as...