Springfield Safe Deposit & Trust Co. v. First Unitarian Societ

200 N.E. 541 (1936)

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Nature of the Case

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Facts

In 1925, the trust department from uninvested funds held by it in various trusts, lent $65,000 to Young, a man of substantial means and owner of a considerable amount of real estate on his note payable on demand after three years with interest at 5.5% payable quarterly secured by a first mortgage on real estate in Springfield. The land was appraised at $100,000 and the buildings at $20,000. This loan was approved by a group of experienced real estate trustees as a conservative mortgage and a proper investment for the trust. The note and the mortgage ran to petitioner without designation as trustee. This was for convenience because they pooled money from various trusts into different investments. This was in accordance with uniform practice. Certificates of Interest in Real Estate Mortgage were issued on the same date and placed in each appropriate trust file to designate its interest in the mortgage. In 1932, foreclosure was necessary. The property was sold at a loss. A new note and first mortgage were taken, and a new participating interest certificate was issued to each trust. The issue of pooling trust investments was raised.