Gordon v. Guernsey

• Decision Date: 29 April 1944
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: JOSEPH M. GORDON v. BENJAMIN GUERNSEY & others.

316 Mass. 106

55 N.E.2d 27

JOSEPH M. GORDON v. BENJAMIN GUERNSEY & others.

Supreme Judicial Court of Massachusetts, Suffolk.

April 29, 1944

November 2, 1943.

Present: FIELD, C.

J., LUMMUS, QUA & RONAN, JJ.

Trust, Expense of litigation, Suit for breach of trust. Attorney at Law. Equity Pleading and Practice, Appeal.

Certain documents which the parties to a suit in equity, by a stipulation not approved by the trial judge, agreed might be presented to this court on an appeal without a report of the evidence as a whole, could not be considered by this court; the suit must be decided upon the pleadings and the findings by the trial judge unaffected by such documents.

A trustee charged in litigation with maladministration respecting trust investments, loans and sales, who was completely exonerated on the major charges involved, although held liable on certain unrelated and comparatively minor charges, and who could and did make a reasonable apportionment of counsel fees incurred in his defence as between the two groups of charges and personally paid the fees allocated to defence of the charges on which he was held liable, was entitled to pay from the funds of the trust the fees allocated to defence of the charges on which he was exonerated.

On findings by a trial judge in a suit in equity, without a report of the evidence, counsel fees of $150,000 charged by eminent attorneys for a largely successful defence of trustees in protracted litigation involving complex and serious charges against them for alleged maladministration to the extent of from $4,000,000 to $6,000,000, could not be ruled by this court to have been excessive contrary to a finding by the trial judge that they were reasonable and proper.

BILL IN EQUITY filed in the Superior Court on September 19, 1941. The suit was heard by Cabot, J.

J. B. Abrams, for the plaintiff. H. D. McLellan, for the defendants Guernsey and others.

C. F. Lovejoy, (J.

L. Hall with him,) for the defendants Coolidge and another.

QUA, J. This bill is prosecuted in behalf of shareholders of Old Colony Trust Associates, an association organized under a declaration of trust dated May 14, 1928, against trustees of the association and the representatives of a deceased trustee to compel the defendants to reimburse the trust for sums expended by them out of assets of the trust for counsel fees and expenses incurred in the defence of a former suit in the Superior Court, entitled Usher v. Abbott, brought in behalf of shareholders against the present defendants and others for alleged breaches of trust in the management of this same association. The plaintiff appeals from a decree dismissing the bill.

It may be well to clear up at the outset a seeming misconception as to the record now before us. The printed record contains a copy of a stipulation signed by counsel for the parties, wherein it was agreed, among other things, that the original papers and files of the Superior Court in Usher v. Abbott might be used by any party in argument before this court, and that a copy of the master's report in that case, "introduced in evidence as an exhibit by the plaintiff, need not, if the court approves, be printed, but shall be deemed a part of the record and may be presented to the Supreme Judicial Court for the Commonwealth at the time of argument or of submission on briefs." The trial judge did not approve this stipulation and, so far as appears, never knew of it. The evidence as a whole is not reported. Equity and probate appeals can be brought to this court with a complete report of the evidence or merely upon the pleadings and the findings of the trial judge, if the appealing party is willing to rely upon the findings without the evidence, and if other parties will not be prejudiced by this course. Wyness v. Crowley, 292 Mass. 459. Hubbard v. Southbridge National Bank, 297 Mass. 17 , 19. The effect of an agreement of the parties, with the approval of the judge, to include in the record, instead of all the evidence, a summarized statement of all the evidence somewhat analogous to that which might be contained in a bill of exceptions is not here presented. See Gerrity v. Wareham Savings Bank, 202 Mass. 214, 219; Thayer v. Thayer, 277 Mass. 256 , 258; Cook v. Howe, 280 Mass. 325, 327. In any event, the parties cannot stipulate for the bringing to this court on an appeal of mere fragments of the evidence, whether documentary or not, with any expectation that they can be used to reverse or to qualify or to add to findings made by the trial judge upon all the evidence. G. L. (Ter. Ed.) c. 214, Section 24, c. 215, Section 12. Commonwealth v. Suffolk Trust Co. 161 Mass. 550 . Romanausky v. Skutulas, 258 Mass. 190 , 193-194. Old Colony Trust Co. v. Pepper, 262 Mass. 270 , 272. Yoffa v. National Shawmut Bank, 288 Mass. 422 , 426. Damon v. Damon, 312 Mass. 268, 270. Compare Gorey v. Guarente, 303 Mass. 569 , 570. The documents referred to in the stipulation cannot be considered, and the case must be decided upon the pleadings and the findings of the judge. Plumer v. Houghton & Dutton Co. 277 Mass. 209 , 215. Garsson v. American Diesel Engine Corp. 310 Mass. 618 , 619-620.

Important findings of the judge are these: The breaches of trust originally alleged by the plaintiffs in Usher v. Abbott were (1) that in 1930 the trustees improperly caused the trust to purchase twenty thousand shares in The First National Bank of Boston at the unwarranted price of $2,360,000, and thereby brought about a loss of $1,860,000; (2) that in 1930-1932 the trustees improperly caused the trust to purchase twenty-three thousand seven hundred ninety-two of its own shares for $871,266.77; (3) that in 1930 the trustees improperly caused the trust to purchase thirty-eight thousand eleven shares in the Everett Trust Company for $371,473.78; (4) that the trustees improperly caused the trust to lend to the Everett Trust Company about $900,000 and to purchase stock in the Everett Bank and Trust Company for about $335,888; and (5) that the trustees improperly failed to receive from Old Colony Corporation $1.50 a share more than they did receive on sales of one hundred seventy thousand shares of the trust. There were various hearings before the court, and there was a trial before a master, entirely on these issues, lasting sixty-two days. The amount involved, if liability had been found, "might well, with interest, have run to between four and six million dollars." The charges were "of a very serious nature" "because of the bad faith charged to the defendants all of whom...