Holden v. Phelps
| Decision Date | 06 April 1883 |
| Citation | 135 Mass. 61 |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
| Parties | William J. Holden & another v. Abby S. Phelps & another |
Middlesex. Bill in equity, filed October 16, 1880, by the receivers of the Reading Savings Bank, to restrain the defendants from enforcing the power of sale in a mortgage assigned to them by Nathan P. Pratt, the treasurer of said bank; and to compel them to surrender and cancel the assignment. Hearing before Field, J., who reserved the case for the consideration of the full court; such decree to be entered as justice might require. The facts appear in the opinion.
Decree for the plaintiffs.
S Bancroft, for the plaintiffs.
H Wardwell, for the defendants.
The questions of the authority which the treasurer of the Reading Savings Bank possessed by virtue of his office, and that which he had under the by-laws of this institution, have heretofore been fully considered. He had no right to make the assignment of the note and mortgage sought by the plaintiffs either by virtue of his general powers and duties, or under the by-laws, or by the authority of any recorded vote of the bank. Commonwealth v. Reading Savings Bank, 133 Mass. 16. Holden v. Upton, 134 Mass. 177. Holden v. Hoyt, 134 Mass. 181.
The only fact which can bear upon this inquiry, not disclosed in those cases, is, that it here appears that he had, by verbal consent and under the direction of the investment committee, assigned seven mortgages relating to three other and distinct estates. But this permission was not sufficient to invest him with a general authority to assign mortgages, nor to entitle the defendants to infer that he had such authority, even if this fact had been known to them. It is not important that numerous discharges and releases of mortgages appear to have been made by him. He had by the by-laws authority to discharge mortgages on payment thereof. A savings bank is not established for the purpose of dealing in notes, mortgages or other securities. While from time to time it must dispose of these as it becomes desirable to raise money or change investments in accomplishing the objects for which it is formed, this is not a matter within the ordinary duty of the treasurer, and it is not unreasonable that those purchasing notes and mortgages should see that such purchase is made and the security transferred to them by authority of the board of investment. Holden v. Upton, ubi supra .
The argument of the defendants, that, as they were depositors and thus creditors, and that, as it was a part of the duty of the treasurer to pay depositors, he was not bound to pay in cash, rather than in any securities or property of the bank which might be in his possession, and thus might lawfully transfer this mortgage, treats the treasurer as having the right absolutely to dispose of the invested property of the bank, if he sees fit thus to satisfy its obligations, and dispenses entirely with the protection intended by placing it under the care of the board of investment. While it is the duty of the treasurer to pay certain obligations, if he has not the means of doing so with the cash at his disposal, proper provision must be made by the board of investment. He does not thereby acquire the right to use and dispose of the invested property of the bank, any more than he would that of a third person.
It is further the contention of the defendants that, even if it be held that the treasurer had no power to make this assignment the plaintiffs cannot now disavow his act and claim a reassignment of the mortgage; or that, if in any event they may do so, they can only do this on payment to the defendants, with interest, of the full sum for which they discharged the debt of the bank to them. It has heretofore been held, in cases arising out of this failure, where the treasurer without authority had sold and assigned mortgages to persons who had paid full value for them, that such persons could be compelled to reassign to...
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Commonwealth v. Reading Sav. Bank
...statements. Commonwealth v. Reading Savings Bank, 133 Mass. 16. Holden v. Upton, 134 Mass. 177. Holden v. Hoyt, 134 Mass. 181. Holden v. Phelps, 135 Mass. 61. principal question in the case at bar is whether the exhibition and delivery to the petitioner by Pratt, who was the secretary as we......
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...by an express promise. Railroad Co. v. James, 22 Wis. 194;Morris v. Griffith (C C.) 69 Fed. 131;Bradlee v. Bank, 127 Mass. 107;Holden v. Phelps, 135 Mass. 61. There is nothing in the record to warrant a recovery by the defendant upon either of his counterclaims. We must hold that the verdic......
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