Hanscom v. Malden & Melrose Gaslight Co.

• Citation: 125 N.E. 626,234 Mass. 374
• Court: United States State Supreme Judicial Court of Massachusetts
• Decision Date: 08 January 1920
• Parties: HANSCOM v. MALDEN & MELROSE GASLIGHT CO.

234 Mass. 374

125 N.E. 626

HANSCOM

v.MALDEN & MELROSE GASLIGHT CO.^*

Supreme Judicial Court of Massachusetts, Middlesex.

Jan. 8, 1920.

Appeal from Supreme Judicial Court, Middlesex County.

Proceeding for allowance of an account by Edgar F. Hanscom, trustee, against the Malden & Melrose Gaslight Company. From a decree of the probate court allowing the account, the Gaslight Company appealed to the Supreme Judicial Court, which referred the case to a master. Exceptions were taken by all parties to the master's report, and overruled by the court, and the report confirmed, and the Gaslight Company appeals to the full court. Interlocutory and final decrees affirmed.

Johnson, Clapp, Ives & Knight, of Boston, for appellant.

Adams & Blinn and Amos L. Taylor, all of Boston, and Fred J. Johnson, of Dorchester, for appellee.

RUGG, C. J.

This case comes before us on appeal from interlocutory and final decrees overruling exceptions to and confirming the master's report and allowing the account of Hanscom as trustee.

The only questions raised on this appeal relate to the items for compensation of the trustee and of his attorneys. The controversy primarily does not concern the amounts of these items, but the propriety of allowing them at all. The decision of that question involves an inquiry into the transactions preceding the accountant's appointment and affecting the nature of his position, duties and relation to the property of which he has had control. In 1911, Frank E. Chandler, a real estate operator trading in and renting properties of moderate values, was indebted to the Fourth National Bank of Boston, from which he had been a borrower to a greater or less extent for some time. His real estate was under attachment made in 1906 on a suit brought against him by the Malden & Melrose Gaslight Company. Various phases of that litigation are reported in 209 Mass. 354, 95 N. E. 791,211 Mass. 226, 97 N. E. 906, and 220 Mass. 1, 107 N. E. 426, Ann. Cas. 1917A, 145. By deed of August 18, 1911, Chandler executed to Mr. Newell, then president of the Fourth National Bank, a deed of all his real estate in Middlesex county (with a single exception), consisting of about 90 parcels, approximately half of which were covered by the attachment, the others having been acquired subsequently thereto. Contemporaneously with the deed Mr. Newell gave to Mr. Chandler a paper entitled ‘Memorandum of Agreement,’ which was signed and sealed by both. It stated in substance that the conveyance was given to secure the Fourth National Bank against all liability or loss arising from its transactions ‘present or future entered into with said Chandler or other persons' at his request. Power on the part of Mr. Newell was recognized to sell at discretion any of and all the real estate described in the deed and to apply the proceeds from time to time to the discharge of any liability to the bank therein set forth and, when all such liabilities should be discharged, to render the surplus proceeds of sales, and to reconvey the unsold portions of the real estate, to Chandler or his heirs, executors or administrators. Chandler's financial condition was such at that time as to give the bank reasonable ground for questioning his standing. After this conveyance and agreement, Chandler continued to deal with the real estate, collecting rants, making repairs and effecting some sales, Mr. Newell executing the necessary papers from time to time and having general supervision of the whole affair. Other lands later were discovered to be owned by Chandler, who conveyed them also to Mr. Newell. In April, 1912, Mr. Newell was one of the passengers upon the Titanic and was lost at sea with the sinking of that steamship. Chandler continued his real estate business until his death in June, 1913. In the following October the accountant was appointed trustee under the ‘Memorandum of Agreement,’ which then first became a matter of public record by being filed in the probate court. This appointment was made by the probate court upon petition by Hanscom after citation and with the assent of the bank. The decree was entered under R. L. c. 147, § 5, and after reciting in substance that Arthur W. Newell, trustee under the ‘Memorandum of Agreement,’ having deceased before the objects thereof are accomplished, that no adequate provision is made therein for supplying the vacancy, that some of the parties interested have requested the appointment of the petitioner,' and other jurisdictional facts, ordered that the ‘petitioner be appointed as trustee, * * * in place of said Arthur W. Newell’ under the instrument.

Hanscom was then and during the period here in controversy has remained the assistant cashier of the bank. The case has been referredto a master, who has found that under his appointment as trustee the accountant has had general supervision of the renting, repair and sale of the Chandler properties, and that he has managed and sold certain parcels thereof, through himself or competent agents, with discretion, ability and sound judgment, and has out of the proceeds satisfied all obligations of Chandler to the bank described in the ‘Memorandum of Agreement.’ It has been necessary in the wise management of the property not to attempt to sell considerable quantities of the real estate at once, but to sell slowly in order not unduly to depress the market. This has required a period of about three years. There has been necessity, treating these numerous parcels as a trust entity, for a considerable amount of litigation of varied character, all of which has been conducted by the judicious employment of counsel conceded to have been faithful and competent.

During the accountant's administration of the property, a petition was brought in the probate court for instructions upon the point whether proceeds from sales of real estate might be applied to the settlement of indebtedness upon other parcels the equities of which were imperiled by the fact that mortgages were overdue and the mortgagees were pressing for payment. A decree was entered, from which no appeal appears to have been taken, authorizing the trustee to apply proceeds of sales to the payment of taxes, interest and in reduction of mortgage and other incumbrances upon remaining property. The authority conferred by this decree has been exercised. A considerable amount of work was required in the searching of real estate titles. Proceedings were had in the land court for the registration of some titles. The trustee also actively...