Sawyer v. Nat'l Shawmut Bank

• Decision Date: 27 June 1940
• Citation: 28 N.E.2d 455,306 Mass. 313
• Parties: SAWYER v. NATIONAL SHAWMUT BANK.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

306 Mass. 313

28 N.E.2d 455

SAWYER

v.NATIONAL SHAWMUT BANK.

Supreme Judicial Court of Massachusetts, Suffolk.

June 27, 1940.

Exceptions from Superior Court, Suffolk County; Pinanski, Judge.

Action by Eloise W. Sawyer against the National Shawmut Bank to recover money withdrawn from a joint account. The court directed a verdict for defendant, and plaintiff brings exceptions.

Exceptions overruled.

T. B. Shea, of Boston, for plaintiff.

J. C. Reilly, of Boston, for defendant.

RONAN, Justice.

The plaintiff, in this action of contract or tort, seeks to recover money which she alleges was wrongfully withdrawn by the defendant from a joint account deposited with the defendant and standing in her name and that of her husband. The case was heard upon an auditor's report and oral evidence. The plaintiff excepted to the direction of a verdict for the defendant.

There was evidence that the plaintiff on August 17, 1927, went to one of the branch offices of the defendant for the purpose of redeeming certain bonds which had been called for redemption. She talked to an employee of the defendant who referred her to one Gordon who was seated at a desk in the front part of the office. There was a sign upon this desk which read, ‘The Shawmut Corporation Mr. Gordon.’ Gordon was an employee of the Shawmut Corporation, a corporation organized under the laws of this Commonwealth which was a duly licensed dealer in securities. All of its capital stock was owned by the defendant. It had a representative in the main office and in the various branch offices of the defendant. Upon the request of a customer of the defendant, and for his accommodation, a representative of the Shawmut Corporation would purchase or sell for the customer securities listed upon the stock exchanges, but it made no charge for the service and made no profit from such transaction. Gordon was not an employee of the defendant. The defendant permitted him to arrange with its customers for the purchase and sale of securities, to deposit the proceeds of sales to the credit of the customer, and to charge his account with the purchase price of the securities bought. Gordon was also authorized by the defendant to arrange with prospective customers for the sale of securities owned by them, and to deposit the proceeds in an account with the defendant after such an account had been opened through arrangement with Gordon. The plaintiff told Gordon that she wished to have certain bonds redeemed and to have the proceeds deposited in a joint account with her husband; that the proceeds would be her personal property and were not to be used for the purchase of stock or for stock speculation. Gordon stated that he was glad she had so informed him, but that she could not open a joint account in the absence of her husband. She then instructed Gordon to deposit the proceeds in the account of her husband, which he did.

The plaintiff and her husband opened a joint account with the defendant on April 17, 1928. Each of them signed a joint account card which read: ‘Eloise W. Sawyer or F. H. Sawyer Either party to sign checks and in case of the death of either one the survivor is entitled to draw all the money or any part thereof.’ On September 19, 1928, and on December 28, 1928, and at other times thereafter until this joint account was closed in March, 1932, Sawyer purchased certain securities through Gordon, who had general instructions from Sawyer ‘to buy for him anything he thought good and charge the same to the joint account.’ Sawyer did not draw any check for the purchase of these securities but permitted them to be paid for by a charge slip transmitted to the defendant by an agent of the Shawmut Corporation. The plaintiff had but little money in the joint account after the December purchase. Her principal complaint is based upon the withdrawals for the purchases in September and December, 1928. The plaintiff learned of these purchases of September and December, 1928, in April, 1929; and in May, 1929, she demanded of Gordon that he restore to the account the money which she had contributed to the account. She made no request of her husband for the stock. She did not request him to sell the stock and turn the proceeds into the account. The stock could have been sold for at least it costs until August 1, 1929. The present action was commenced on December 24, 1934.

The joint account card, which the plaintiff and her husband signed at the time the joint account was opened, constituted a contract between them and the bank and established their rights in relation to the bank, irrespective of the interest either may have had in the account or of whatever rights therein they might have had been themselves. Kentfield v. Shelburne Falls Savings Bank, 273 Mass. 548, 174 N.E. 229;Barnes v. Chandler, 277 Mass. 395, 178 N.E. 735;Castle v. Wightman, Mass., 20 N.E.2d 436. One of the terms of the contract was that either party might withdraw the account or any part of it, and the bank in accepting the deposit agreed to this term of the contract. Chippendale v. North Adams Savings Bank, 222 Mass. 499, 111 N.E. 371;Milan v. Boucher, 285 Mass. 590, 189 N.E. 576;Gibbons v. Gibbons, 296 Mass. 89, 4 N.E.2d 1019. The bank, while it thus agreed to honor checks drawn by either depositor, did not agree to see that no checks were drawn by either for the purpose of purchasing securities, and, under the contract, the defendant had no right to refuse to pay checks drawn by Sawyer for the purchase of securities. Armstrong v. American Exchange National Bank of Chicago, 133...