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Keywords

defendantburden of prooffiduciarytrustwill
plaintiffdefendantburden of prooffiduciarytrustobjection

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Akin v. Warner, 318 Mass. 669, 63 N.E.2d 566

Facts

Eleanor E. Akin entrusted Dr. William L. Tracy with money and securities for investment, beginning in the early 1920s. Dr. Tracy, a successful physician, developed a close relationship with Akin and her family, leading them to rely on his financial judgment. After Dr. Tracy's death in 1941, Akin sought an accounting of the funds, as no proper accounting had been provided during their dealings. A master found that Dr. Tracy owed Akin substantial amounts, which were not accounted for.

The pertinent facts found by the master are these: Dr. Tracy was a successful physician and surgeon who resided in Pittsfield where he had practised his profession since 1910.

Issue

The main legal issue was whether a fiduciary relationship existed between Akin and Dr. Tracy, which would require Dr. Tracy to account for the funds entrusted to him.

The principal question for determination in each case is whether or not there was a fiduciary relationship between the parties.

Rule

In cases of fiduciary relationships, the burden of proof is on the trustee to account for money or property held in trust, and any transaction must be subjected to close scrutiny.

Where, as here, a trust is established, the burden of proof is on the trustee to account for money or property held by him in trust.

Analysis

The court analyzed the relationship between Akin and Dr. Tracy, concluding that it was one of trust and confidence rather than an arm's length transaction. The court noted that Dr. Tracy had a duty to keep accurate accounts and that his failure to do so meant that the estate was liable for the amounts owed to Akin. The court emphasized that even if Dr. Tracy's actions were not overtly deceptive, the lack of proper accounting and the fiduciary nature of their relationship required that Akin be compensated for the unaccounted funds.

The master made no express finding on this question, as he might well have done (see Seemann v. Eneix, 272 Mass. 189, 191, 172 N.E. 243; Ryder v. Donovan, 282 Mass. 551, 554, 185 N.E. 473) inasmuch as it was a mixed question of law and fact, but we are of the opinion that the subsidiary facts contained in the report establish that the plaintiff and her mother did not deal with Dr. Tracy at arm's length and that the relationship between them was one of trust and confidence.

Conclusion

The court reversed the final decrees dismissing Akin's bills and ordered the defendant to pay Akin the amounts found due, with interest.

It follows that the final decrees dismissing the bills must be reversed.

Who won?

Eleanor E. Akin prevailed in the case because the court found that Dr. Tracy, as her fiduciary, had failed to account for significant sums owed to her, and thus the estate was liable for those amounts.

The only objection taken by the defendant to the master's report, which became an exception (Smith v. Smith, 313 Mass. 687, 689, 48 N.E.2d 920), is to the ultimate finding in each case that the defendant is indebted to the plaintiff.

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