Kendall v. Fid. Trust Co.

• Decision Date: 25 May 1918
• Citation: 119 N.E. 861,230 Mass. 238
• Parties: KENDALL et al. v. FIDELITY TRUST CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

230 Mass. 238

119 N.E. 861

KENDALL et al.

v.FIDELITY TRUST CO.

Supreme Judicial Court of Massachusetts, Suffolk.

May 25, 1918.

Report from Supreme Judicial Court, Suffolk County.

Bill in equity by Francis H. Kendall and others, trustees doing business under the name and style of the School Street Associates, against the Fidelity Trust Company. On report to the full court. Decree ordered dismissing the bill.

Goodwin, Proctor & Ballantine, of Boston (Geo. K. Gardner, of Boston, of counsel), for plaintiffs.

J. E. McConnell and Eaton & McKnight, all of Boston, for respondent.

CROSBY, J.

This is a bill in equity by which the plaintiffs, as trustees of the School Street Associates, seek to impress with a trust certain moneys deposited in the defendant's bank by one Alvero, assistant treasurer in the employ of the plaintiffs the amount so deposited being afterwards wrongfully withdrawn and misappropriated by him. A single justice overruled so much of the answer as is by way of demurrer, and at the request of the parties reported the case to this court upon the bill, answer, and agreed statement of facts.

[1][2] Where a suit in equity has for its object the disposal of a trust fund, all known claimants of the fund must be made parties; in the case at bar the defaulting employé, Alvero, although he was the depositor of the funds in the defendant's bank has no interest whatever in the subject-matter of the suit and need not be joined as a party. The cases of Gregory v. Merchants' National Bank, 171 Mass. 67, 50 N. E. 520, and Carr v. National Security Bank, 107 Mass. 45, 9 Am. Rep. 6, cited by the defendant, are not applicable to the facts in the present case.

It is recited in the agreed statement of facts that the plaintiffs kept the money of the trust in a deposit account with the Merchants' National Bank of Boston; that in January, 1913, Alvero was employed by the plaintiffs, and by an instrument in writing was authorized ‘to sign checks upon Merchants' National Bank of Boston, and indorse checks for deposit in said bank, from January 11, 1913, until further notice.’ This instrument was filed with the Merchants' National Bank and was not revoked until all the deposits made by Alvero had been withdrawn from the Fidelity Trust Company. Between September 5 and November 18, 1916, Alvero drew a series of checks on the Merchants' National Bank, signed ‘School Street Associates, by M. Alvero, Assistant Treasurer,’ and deposited them with the defendant for collection. The first of these checks, dated September 5, 1916, for $300, was made payable to Alvero individually; the other checks were all payable to the defendant and amounted to $4,700.

It is agreed that:

‘Each of these checks was deposited with the defendant for collection by Mariano Alvero on the day of its date, was duly presented to the Merchants' National Bank through the clearing house, and was paid. The proceeds by Alvero's direction were placed to the credit of Alvero's personal account with the defendant. In this personal account Alvero also deposited moneys other than that derived from proceeds of checks drawn upon plaintiff's account. This personal account with the defendant was at no time overdrawn and the defendant never received any part of that account for its own use or in payment of any debt to it, but paid out the whole from time to time upon the personal checks of Alvero. None of the checks upon the plaintiffs' accounts above referred to were drawn by Alvero for the use or purposes of the plaintiffs, but all were drawn for his individual purposes. The defendant's only knowledge of Alvero's authority to draw checks against the account of the plaintiffs was from the checks themselves and the fact that the same were honored by...