Metro. Trust Co. v. Fed. Trust Co.

• Decision Date: 01 March 1919
• Citation: 232 Mass. 363,122 N.E. 413
• Parties: METROPOLITAN TRUST CO. v. FEDERAL TRUST CO. et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

232 Mass. 363

122 N.E. 413

METROPOLITAN TRUST CO.

v.FEDERAL TRUST CO. et al.

Supreme Judicial Court of Massachusetts, Suffolk.

March 1, 1919.

Appeal from Superior Court, Suffolk County; Wm. Cushing Wait, Judge.

Bill in equity by the Metropolitan Trust Company against the Federal Trust Company, Arthur E. Abbott, and Albert Eugene Wood. From decree for plaintiff, defendant trust company appeals. Decree ordered affirmed.

James E. Cotter and Jos. P. Fagan, both of Boston, for appellant.

Harold Williams, Jr., of Boston (Barker, Wood & Williams, of Boston, of counsel), for appellee.

BRALEY, J.

The bill having been taken for confessed against the individual defendants, the trust company appealed from the decree establishing the plaintiff's claim. The plaintiff within the issue raised by the pleadings was properly allowed to show all of the various financial transactions with which Abbott, the defendant's employé, had been connected, even if in some instances their bearing on his defalcations may have been somewhat remote. The extent of the inquiry into collateral or immaterial matters also was largely within the discretion of the judge, which does not appear to have been exercised to the defendant's prejudice, and on going over the record, it is manifest, that all the material facts are supported by evidence to the admission of which no exceptions were saved.

While the testimony was taken by a commissioner, the 36 findings made by the judge not appearing to have been plainly wrong are to be treated as conclusive. It is found that Abbott employed as a bookkeeper by the defendant trust company, hereafter referred to as the defendant, begun systematically to steal from his employer, and by a series of false entries succeeded in concealing his withdrawals until he had abstracted ‘$11,800,’ when he became acquainted with one Wood, employed by the plaintiff as a bookkeeper. The two then planned a scheme to defraud their respective employers, and as a result of their misdoings the present suit was brought after the plaintiff discovered that it had been defrauded of ‘$15,000’ through the payment of a check for that amount forged by Abbott. The transactions by means of which the plaintiff's money was obtained do not appear to have been very much if at all in controversy. Abbott made fictitious entries on the defendant's ledger as of a certain date crediting various depositors with an aggregate amount of ‘$15,000.’ By the use of these fictitious entries of deposits, fraudulent withdrawals of money by him and previously charged against the same depositors were balanced and the shortage concealed. If Abbott however in confederacy with Wood could obtain ‘$15,000’ from the plaintiff he would be able to make good his defalcations. He accordingly forged a check for ‘$15,000’ drawn on the plaintiff in the name of a depositor whose account was in that part of the ledger over which Wood had supervision, and Wood knowing that a check of this character would be presented took care to intercept it so that the fraud would not be discovered by any of the plaintiff's officers. A bundle of checks came into the plaintiff's banking house from the clearing house on May 11, 1917, and Wood, who had been informed by Abbott that the check in question had been drawn, was awaiting its appearance, and, finding it on top of the bundle, at once placed the check at the bottom, and after calling it off of the boy who ran the adding machine put it in his pocket. It never was seen thereafter by any of the plaintiff's employés except Wood, who in the afternoon of the same day gave the check to Abbott, and there is no evidence showing what disposition Abbott made of it. It is unnecessary to describe the method whereby Wood sought to cover up his own wrongdoing, or the plaintiff's detection of his conduct, or to comment further on the way in which Abbott accomplished his purpose. The result is plain. The defendant has in its possession ‘$15,000’ of the plaintiff's money for which it has given no equivalent to the plaintiff. It moreover has neither paid, nor is it under any liability to pay any person whatsoever the whole or any part of the amount. But nothwithstanding these facts the defendant contends, that not having been negligent and having acted in good faith it can retain the money in satisfaction of Abbott's defalcations, especially as...