Charity. Trust. Attorney General. Equity Jurisdiction, For an accounting. Labor Union. Strike.
If, at the time of a strike of many thousands of operatives employed in a manufacturing centre, resulting in suffering and privation among them and their families, a committee, organized for the purpose of supporting the strike and also for the support of those strikers who were suffering and in want, appealed for funds for the relief of the strikers in want and received many thousands of dollars from many persons both in this Commonwealth and elsewhere who were moved by the appeal and by the suffering incident to the strike, and such committee expended a part of such money for purposes different from those for which it was contributed, such as salaries, board and personal expenses, legal expenses and counsel fees for some of their own number, transportation of children to other cities for the purpose of making further appeals, and contributions to a national organization of the strikers, it is the duty of the Attorney General, at the relation of some of the contributors, to enforce by an information in equity the application of the funds so raised to the charitable purposes for which they were contributed, and a demurrer to such an information, brought against the secretary, treasurer and other members of the committee, must be overruled.
Where a committee, organized for the purpose of supporting a strike of many thousands of operatives in a textile manufacturing centre and also for the support of those strikers who are in suffering and want, in response to an appeal issued by them for money with which to relieve such want, receives a large fund for that purpose, those members of such committee who become the custodians and managers of the fund are under the same obligation as to the fund as if they expressly had been made trustees thereof; they must account for it and can be credited in the accounting only with disbursements made for the purposes of the trust; they must be charged with everything for which they do not properly account; they are bound to keep the fund distinguished from other moneys in their hands, and the consequences of any failure on their part to keep it so distinguished must fall upon themselves.
If the custodians and managers of such fund deliver to the chairman of their committee, who is not a custodian or manager but who was present during a large part of the strike and was the secretary of a national organization of the strikers, checks on the funds in a bank which are payable to third persons and which he knows are to be used for other purposes than those for which the fund was given, and such member receives the checks and delivers them to the payees, who thereupon receive the amount thereof, he is jointly responsible with the custodians and managers for the amount of those checks.
SHELDON, J.
The demurrer rightly was overruled. According to the averments of the bill, the fund in question was raised by subscriptions as a relief fund, to relieve the necessities of a very great number of men who had engaged in a strike, and who thus had been left without any means of maintaining themselves and their families. The fund was raised and should be applied for the purposes of a public charitable trust. Jackson v. Phillips, 14 Allen, 539, 556. Attorney General v. Goodell, 180 Mass. 538. Attorney General v. Compton, 1 Y. C. Ch. 417. Attorney General v. Kell, 2 Beav. 575. It was upon the Attorney General that the duty rested of enforcing the proper application of the fund and of compelling the restitution of any part thereof which had been diverted to other purposes. R.L.c. 7, § 6. Parker v. May, 5 Cush. 336, 337. Burbank v. Burbank, 152 Mass. 254. Attorney General v. Vivian, 1 Russ. 226. Attorney General v. Cockermouth Local Board, L.R. 18 Eq. 172. Strickland v. Weldon, 28 Ch. D. 426. And see McQuesten v. Attorney General, 187 Mass. 185. And the occasion for the present application, the misappropriation of the fund by the defendants, is sufficiently averred. Attorney General v. Parker, 126 Mass. 216. Attorney General v. Bishop of Manchester, L.R. 3 Eq. 436.
The defendants' exceptions to the master's first report were waived, and those exceptions accordingly have been overruled by a decree from which no appeal has been taken.
The exceptions of the defendant Bedard to the master's supplemental report do not appear by the record before us to have been formally decided; but they really were disposed of by the action taken on the exceptions of the defendant Shaheen and by the final decree, which did not charge the defendants Bedard, Shaheen, Trautmann and Yates (hereinafter called the defendants) with any part of the sums contributed for general purposes. The failure to take formal action upon Bedard's exceptions is not material now, but it should be corrected.
The action taken on Shaheen's exceptions was sufficiently favorable to the defendants. The evidence heard by the master is not reported, and we cannot say that his findings were wrong. The defendants received the money in question as a trust fund. They must account for it, and can be credited only with disbursements which actually were made for proper purposes. They must be charged with everything for which they have not properly accounted. This is a sound principle, and is abundantly supported by authority. Little v. Phipps, 208 Mass. 331, 335. Ashley v. Winkle, 209 Mass. 509, 525. Watson v. Thompson, 12 R.I. 466, 470. Blauvelt v. Ackerman, 8 C.E. Green, 495, 502. Frethey v. Durant, 24 App. Div. (N.Y.) 58, 61. Seaward v. Davis, 133 App. Div. (N.Y.) 191. Ward v. Armstrong, 84 Ill. 151. Chirurg v. Ames, 138 Iowa, 697. It was for the defendants to keep the trust fund distinguished from other moneys in their hands; and the consequences of any failure on their part to comply with this duty must fall upon themselves. International Trust Co. v. Boardman, 149 Mass. 158, 163. Snailham v. Isherwood, 151 Mass. 317, 321. Henderson v. Henderson, 58 Ala. 582. Lupton v. White, 15 Ves. 432.
We cannot doubt that the defendants, the custodians and managers of this fund, are under the same obligations as if they expressly had been made the trustees thereof. Attorney General v. Compton, 1 Y. C. Ch. 417, 426. In re Hallett's estate, 13 Ch. D. 696. Dillon v. Connecticut Mutual Life Ins. Co. 44 Md. 386.
The defendant Yates rightly is held for the amount which came to his hands. He took it without consideration, and must be taken to have had notice of the trust upon which it was held. Otis v. Otis, 167 Mass. 245. But as this is a part of the amount for which the other defendants have been held liable, the decree should be so modified as to make it plain that no double payment is required.
As there has been no appeal by the Attorney General, we cannot consider whether costs rightly were allowed to the defendants Ettor and Haywood.
What we have said disposes of all the material questions. It is not necessary now to determine what disposition finally shall be made of the money ordered to be paid into court.
The decree appealed from must be modified by inserting a statement that Bedard's first exception to the master's supplemental report is sustained and his second exception overruled; by ordering the payment into court of the sum of $5,800, with interest, by the defendants Bedard, Trautmann, Shaheen and Yates, and of the further sum of $9,579.85, with interest, by the defendants Bedard, Trautmann and Shaheen; and by stating the amount of the costs ordered to be paid. So modified, the decree must be affirmed with costs against the defendants Yates, Bedard and Shaheen, being the only parties who have appealed from the decree.
So ordered.