Court Opinion

ID: 8801936
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:35:26.610016+00
Date Added: 2024-06-11T17:03:56.262908
License: Public Domain

Mr. Justice Baker delivered the opinion of the court. The society was created by written articles of agreement between its members. By those articles appellants with others were made trustees of the funds of the society. Each depositor on becoming so signed the agreement and became a party to it. Appellees thus became parties to the agreement, and their -rights as well as the liability of the trustees to them must depend upon and be determined by the articles of agreement. Articles 5 and 7 of that agreement are as follows: “Article 5. The trustees, undertaking their duties without the expectation of emolument, and pledging themselves to an upright and conscientious discharge thereof, are not to be held responsible for any losses which may happen from whatsoever cause, except their wilful, corrupt misconduct, in which case those trustees only who are present and guilty of such misconduct shall be answerable for the same.” “Article 7. It is agreed that each member of this society shall be bound by, and shall possess no rights enforceable other than in conformance with the rules and regulations hereinafter set forth and hereto appended. ? ’ There is no evidence in the record even tending to show any wilful or corrupt misconduct on the part of any of the appellants, and by the express provision of article 5 the trustees were not to be held responsible for any losses which might happen from any cause other than their wilful, corrupt misconduct, and in that case only those trustees guilty of such misconduct should be answerable for the same. The bill alleged that appellants failed to' perform their duties as trustees; that the deposits of the society in the bank of Moulton, Lathrop & Co. at the time of their failure amounted to $1,133.75, “which sum was carelessly and negligently left on deposit by said trustees in the bank of Moulton, Lathrop & Co.” If it be conceded that the trustees, under the articles of agreement, were liable for losses sustained by: depositors through their negligence, the proofs do not support the allegation that the funds of the society on deposit in the bank of Moulton, Lathrop & Go. at the time of their failure were carelessly or negligently so left on deposit in said bank by the trustees. It is true that the funds of the society were at the time of the failure of Moulton, Lathrop & Co. on deposit in the bank of that firm and that the trustees had adopted elaborate “Buies for the investment of funds,” which provided that the funds of the society should be invested in certain specified classes of bonds, in mortgages on real estate, or in time loans secured by collateral.' But the society had on deposit, at most, but $1,133.75, and the proofs do not clearly show that it had any depositors other than appellees, and their deposits amounted in the aggregate to $815.50. A savings bank or society which three years after its organization has deposits amounting only to either $815.70 or $1,133.75, especially where $755 of such deposits is due to one person, cannot be said to have on hand “funds for investment” in bonds, mortgages or time loans. With a sufficient amount of deposits and a sufficient number of depositors, such a society may properly invest a certain percentage of its deposits in bonds or time loans, but with only the amount of deposits and the number of depositors which this society had it was prudent and proper and not negligent to keep the entire amount of such deposits on deposit in a bank. The financial reputation and standing of Moulton, Lathrop & Go. was good up to the time of their failure. Appellant Holmes was a depositor with the firm up to the time the Chicago Savings Society was organized. Some of the trustees were depositors with the firm up to the time of their failure. Moulton and Lathrop died before the bill was filed; Armstrong was a non-resident when the bill was filed. There is no evidence tending to show that any one of appellants or any trustee other than Moulton, Lathrop and' Armstrong had any- reason to suspect, up to the time of'their failure that Moulton, Lathrop & Co. were not financially sound and responsible. The proofs, in our opinion, do not establish any liability on the part of appellants to appellees for the amounts deposited by them in said society, and the decree of the Superior Court will be reversed and remanded with directions to enter a decree dismissing the bill for want of equity. Reversed and remanded with directions.