Smith v. Bank of New England

• Decision Date: 11 March 1898
• Citation: 69 N.H. 254,45 A. 1082
• Parties: SMITH v. BANK OF NEW ENGLAND.
• Court: New Hampshire Supreme Court

45 A. 1082

69 N.H. 254

SMITH

v. BANK OF NEW ENGLAND.

Supreme Court of New Hampshire. Hillsboro.

March 11, 1898.

Suit by Anna L. Smith, on behalf of herself and 78 others, against the Bank of New England, for breach of trust. To the bill the defendant demurred. Overruled.

Bill in equity, in behalf of the plaintiff and all others of like interest, alleging that the plaintiff is the owner of certificates of deposit issued by the Union Trust Company, which are indorsed by the defendants in the manner stated below; that on March 29, 1892, it was agreed between the trust company, a corporation organized under the laws of Iowa, and doing business in that state, and the defendants, that the trust company should issue certificates of deposit to an amount to be thereafter fixed, and should assign and transfer to the defendants, to be held by them in trust to secure the payment of the certificates, real estate and other securities approved by the defendants to an amount exceeding, at their face value, by 10 per cent. the amount of the certificates; that the defendants should thereupon certify upon each of the certificates that its payment was so secured; that the trust company might at any time withdraw any of the securities upon substituting others of equal or greater value; that, under and in pursuance of the agreement, the trust company issued certificates of deposit to the amount of $69,000, and the defendants certified thereon that, to secure the payment thereof, they held securities of the full value of 10 per cent. in excess of the amount of the certificates, though they in fact held only 505 shares of bank stock, of the face value of $50,500; that subsequently the trust company withdrew the bank stock, and substituted other securities, which were accepted and approved by the defendants, of the face value of $91,000, but all of which, except 180 shares of bank stock, of the face value of $18,000, were wholly worthless, as the defendants then knew, or by due care would have learned; that the defendants neglected to cause the 180 shares of bank stock to be properly transferred to them, in consequence of which, upon a liquidation of the affairs of the bank, the full value of the stock was paid to the trust company; that whether the trust company paid this money, or any part of it, to the defendants, the plaintiff does not know, and prays to be informed; that 78 other persons (whose names and residences are stated) hold certificates of deposit similar in all respects to those owned by the plaintiff, but that the amount held by each of them and the extent of their respective Interests are unknown to the plaintiff, and can only be determined upon an accounting; and that the trust company is in the hands of a receiver, and has no substantial assets. The prayer of the bill is (1) for an order requiring all persons in like interest to join in the action or be barred from sharing in the decree; (2) for discovery and an accounting; and (3) for a determination of the damage caused by the defendants' negligence in the management of the trust estate, and a decree that the defendants shall pay the same. The defendants demurred because (1) the bill is multifarious; (2) the plaintiff has a plain and adequate remedy at law; and (3) the bill is without equity.

David A. Taggart, Elijah M. Topliff, and Van Fossen & Frost, for plaintiff.

James F. Briggs and Oliver E. Branch, for defendants.

CARPENTER, C. J. The bill is not multifarious, nor would it be if all the holders of certificates were in fact made parties to it either as plaintiffs or defendants. They are all equally and directly interested in the disposition of any trust funds now held by the defendants, and in any damages that may be awarded against them for a breach of the trust. All the matters in controversy relate exclusively to the alleged conduct and misconduct of the defendants as trustees. It not only appears that by the joinder of all others of like interest with the plaintiff the defendants will not be embarrassed or subjected to any expense or inconvenience in making their defense, nor that any injustice will be done them, but that the matters in dispute can be more conveniently, economically, and expeditiously adjusted in one suit. Chase v. Searles, 45 N. H. 511; Eastman v. Bank, 58 N. H. 421, 422; Page v. Whidden, 59 N. H. 507, 509. The prevention of useless litigation and a multiplicity of needless suits is a recognized ground of...