Young v. Mercantile Trust Co.

• Decision Date: 03 July 1905
• Citation: 140 F. 61
• Parties: YOUNG v. MERCANTILE TRUST CO.
• Court: U.S. District Court — Southern District of New York

140 F. 61

YOUNG v. MERCANTILE TRUST CO.

United States Circuit Court, S.D. New York.

July 3, 1905

Dittenhoefer Gerber & James, for complainant.

Alexander & Colby (William F. Goldbeck, of counsel), for defendant.

HAZEL District Judge.

The bill is for an accounting, and alleges that on or about June 24, 1902, the United States Shipbuilding Company, a New Jersey corporation, bought certain properties from the complainant, for which he received securities amounting in the aggregate to upwards of $60,000,000; that the complainant thereupon delivered such securities to the defendant, as trustee and depositary, to hold and thereafter deliver and distribute the same as directed and authorized by the complainant, and that the defendant received the securities and accepted the trust obligation to so deliver and made distribution thereof; that an account has been demanded of the defendant, but none has ever been rendered in respect to such deposits or of the disposition made thereof. The bill also alleges 'on information and belief that in the disposition, distribution, and disposal of the said securities the defendant has disregarded the rights of your orator, and has violated its duties as trustee to your orator, and his directions and wishes respecting the same ' How the securities were disposed of, whether by sale or distribution, what complainant's wishes or directions were, or in what particular his rights have been violated does not appear. The defendant has demurred on the grounds that the bill lacks equity, and that the court is without jurisdiction.

Complainant's theory is that the defendant was depositary and trustee, and hence fiduciary relations existed between them entitling complainant to an accounting. The demurrant contends, on the other hand, that the transaction simply amounted to a naked deposit, by which the relations of bailor and bailee were established. A court of equity doubtless has plenary power to determine the rights and liabilities arising between a trustee and the beneficiaries of a trust. It is evident however, that the general allegation of trust or trusteeship, together with the object and purpose of its creation, is not here distinctly or sufficiently averred. It is pertinent to inquire, what did the defendant undertake to do other than become depositary or bailee? The character of the trust, its extent or purpose, and whether in writing or by parol, is not disclosed. The essential elements of a trust, viz., a beneficiary, a trustee other than the beneficiary, the subject-matter of the trust relations, and surrender of the property and transfer of the title to the trustee, are not well pleaded. The claim that the orator parted with his property to the United States Shipbuilding Company upon receiving the securities, and then deposited the same with the defendant under an implied arrangement that such securities were to be distributed as he might direct, in my judgment was not sufficient to establish such express or implied trust relations as would warrant the interposition of a court of equity. Certainly it would seem that specific and definite facts to warrant the interference of a trust relation should have been pleaded, instead of merely general averments. The suggestion that the demurrer concedes the allegations of the bill is not entirely correct, as such admissions only include relevant...