Tuttle v. First Nat. Bank of Greenfield
| Decision Date | 03 March 1905 |
| Citation | 73 N.E. 560,187 Mass. 533 |
| Parties | TUTTLE v. FIRST NAT. BANK OF GREENFIELD. FIRST NAT. BANK OF GREENFIELD v. TUTTLE. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
OPINION TEXT STARTS HERE
Appeal from Superior Court, Suffolk County.
Suits by Joseph H. Tuttle, as trustee under the will of Horace S. Stebbins, against the First National Bank of Greenfield and another, and by the First National Bank of Greenfield and another against Tuttle. The superior court ordered a decree for Tuttle, and the bank appealed in the first case, and from an order dismissing the bill in the suit by the bank it also appeals. Affirmed.
Francis L. Hayes, for Jos.
H. Tuttle. Lamb & Lawler, for First Nat. Bank.
These two bills in equity grow out of the same transaction, and involve the right of a trustee, without having authority under the terms of the trust, to pledge a part of the principal to secure the payment of a promissory note signed by him as trustee, the proceeds of which are used for the benefit of the estate, and whether the bank, as pledgee, which took with notice of the trust, acquired a title that will enable it to retain and apply the collateral in payment of the debt.
By the provisions of the will of Horace S. Stebbins, under which the maker of the note was trustee, he was directed and required to invest the property according to his best judgment and discretion, and to pay over the income from time to time as it accrued to the beneficiaries, with full power in his discretion to change investments. But this power did not clothe him with authority to pledge any part of the fund as security for the payment of a promissory note made by him as trustee, although the money thus received went into the trust funds and was expended for purposes for which the income could have been lawfully appropriated. Hoyt v. Jaques, 129 Mass. 286, 287. Because of the absence of authority, and notwithstanding the recital in the body of the note, and form of its execution, the promise was his personal obligation, enforceable against him alone while living, and after his death against his estate. St. 1898, p. 496, c. 533, § 20; Fiske v. Eldridge, 12 Gray, 474, 475;Towne v. Rice, 122 Mass. 67;Plimpton v. Goodell, 126 Mass. 119, 120.
At the time of the negotiation of the note the original payees, and subsequently the defendant bank, which held title under their indorsement, had notice by the from of the stock certificate and accompanying power of attorney that the shares were held...
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