Donnelly v. Levers & Sargent Co.

• Decision Date: 02 March 1917
• Citation: 115 N.E. 252,226 Mass. 214
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: DONNELLY et al. v. LEVERS & SARGENT CO.

226 Mass. 214

115 N.E. 252

DONNELLY et al.

v.LEVERS & SARGENT CO.

Supreme Judicial Court of Massachusetts, Essex.

March 2, 1917.

Appeal from Superior Court, Essex County.

Bill by Annie J. Donnelly and others, administrators de bonis non with the will annexed of the estate of Peter Donnelly, against the Levers & Sargent Company. From a decree for plaintiffs, defendant appeals. Decree affirmed.

Starr Parsons, H. Ashley Bowen, and Chas. D. C. Moore, all of Lynn, for appellant.

H. D. Linscott and J. Jos. Doherty, both of Lynn, for appellees.

BRALEY, J.

The executors although named in the will as trustees and duly appointed to the office held no part of the estate throughout the period shown by the record in the latter capacity, because no account was ever settled in the court of probate wherein they were credited as executors with the amount they were to hold as trustees. Daggett v. White, 128 Mass. 398;Welch v. Boston, 211 Mass. 178, 181, 97 N. E. 893. And not having been empowered by the will, or authorized under the St. of 1910, c. 411, or by agreement, as in Howe v. Richardson, 186 Mass. 259, 71 N. E. 543, between all the legatees and devisees to continue the retail shoe business of the testator, their use for that purpose of the assets of the estate was a breach of their trust. The resultant losses were a waste of the property, for which they and all who knowingly joined with them in the misappropriation are personally accountable to the plaintiffs in the bill as amended, who have been appointed administrators with the will annexed to settle the estate. Hall v. Cushing, 9 Pick. 395, 404;Tuttle v. First National Bank of Greenfield, 187 Mass. 533, 73 N. E. 560,105 Am. St. Rep. 420;United Zinc Companies v. Harwood, 216 Mass. 474, 476, 103 N. E. 1037, Ann. Cas. 1915B, 948, and cases cited. We assume that ‘all the material testimony’ appearing in the record is properly before us under the thirty-fifth equity rule, and its perusal conclusively shows that the moneys received by the defendant in payment for merchandise sold to the executors came from funds of the estate. While conceding under the authority of Allen v. Puritan Trust Co., 211 Mass. 409, 421, 422, 97 N. E. 916, L. R. A. 1915C, 518, that whoever receives property from a trustee transferred or paid over in breach of his trust, himself becomes a trustee if he had notice of the trust, or information which should have put him upon inquiry, and which if followed up would have disclosed its existence, the defendant contends, that the evidence is insufficient to charge it with either knowledge, or notice of the conversion. The memorandum of the presiding judge contains no special findings on this question. But as he incorporates by reference the plaintiff's requests for rulings which were given with certain exceptions no longer material, it is manifest by the decree for the plaintiffs that he must have been convinced the defendant knew or ought to have known that the payment was made with the general funds of the estate. Cohen v. Nagle, 190 Mass. 4, 76 N. E. 276,2 L. R. A. (N. S.) 964,5 Ann. Cas. 553. The question then is ‘whether it can be said as matter of law upon the whole case that there is no view of the evidence that properly could have been taken which warranted the decree.’ James v. Lewis, 189 Mass. 134, 135, 75 N. E. 217;Clare v. Doble, 196 Mass. 91, 81 N. E. 871.

The defendant, a corporation, is of course chargeable with the knowledge and conduct of its officers intrusted with the transactionof its business as a manufacturer of shoes for the retail trade, as well as with notice of the entries on its books of account. Allen v. Puritan Trust Co., 211 Mass. 409, 97 N. E. 916, L. R. A. 1915C, 518. The uncontradicted evidence of the president whose ‘duties consisted of selling and whatever would come up in the general routine of the business' shows that he knew of the testator's death, who at his decease was a customer, and of the appointment of the executors, with...