Makin v. Institution for Savings , 19 Me. 128 ( 1841 )

The opinion of the Court was delivered by

Shepley J.

This corporation was designed to afford assistance to those willing to preserve and invest small gains until needed, or until their accumulation would authorize a more permanent investment. Its purpose was a charitable one. It did not propose to enrich itself by any favorable result of its operations. In the administration of this charity it undertook to invest the money deposited, in public or private stocks, or to loan it on a pledge of them in preference to other loans. The case finds, that it was so invested. It is said, that serious losses have happened by a fall in the price of the stocks purchased, so that the corporation has become unable to pay the several depositors the money received of them. It is insisted, that the corporation has discharged its duty faithfully; has invested the money in the manner it engaged to do ; that a depositor cannot therefore maintain an action at law to recover his money; that he must take his share of the stocks, or resort to equity for relief. The institution is regarded in the argument as sustaining the relation of a trustee to the depositor and it is urged, that it should be dealt with as such. This argument overlooks the consideration, that the corporation not only undertook to receive and to invest the money in stocks, but also to repay it at certain times prescribed by itself. It assumed, that it would have the ability to do this; expecting, doubtless, that the losses would be made up from the excess of interest beyond that, which it promised absolutely to pay. In this it may have been disappointed ; and may find itself, like individuals, assuming responsibilities from a confidence reposed in the value of stocks or other property, unable to perform whar. it has promised. Its erroneous judgment of what it would accomplish for the benefit of the depositors, and the unexpected losses suffered, cannot in law excuse it from the performance of promises made to them. It assumed other and greater liabilities than those properly appertaining to a trustee. A trustee undertakes to act with faithfulness and prudence in preserving and investing property, and to deliver it over, or the proceeds of it, as required. He does not assume to bear the risk of losses. This corporation did, in effect, assume the risk of loss. For it undertook at all events to pay a stipulated interest, and to repay the principal. It may be very true, that it would be more equitable to apportion the losses among all the depositors, instead of allowing one to obtain his money without loss, and thereby subject another to an additional or a total loss. Whether such a result could or not be avoided by some proceeding on the part of the corporation, is not now presented for consideration.

Our law allows the vigilant creditor to interpose by attachment, and to obtain, if he can, his whole debt; leaving, it may be, those less vigilant or fortunate, to an entire loss. The case as presented does not exhibit any sufficient ground of defence.

Exceptions sustained, and new trial granted.