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Blodgett v. American National Bank.

3. That B’s executor had power, while the firm was carrying on its

business, to pledge the assets of the estate for the purpose of raising necessary funds for the use of the firm.

BILL IN EQUITY by the beneficiaries under a testamentary trust, to compel the redelivery to the trustee of certain stock claimed to have been improperly pledged to the respondent bank, and for an accounting for stock sold; brought to the Superior Court in Hartford County. The following facts were found by a committee:

Roswell Blodgett, of the city of Hartford, died January 19th, 1875, testate, and leaving an estate amounting to $281,026, as inventoried in the probate court. His will, which was duly proved, contained the following provisions:

Second. I direct that my estate, both real and personal shall be divided into six equal parts.

Third. I hereby give, devise and bequeath to my son Roswell F. Blodgett one of said parts, to be his and his heirs' forever.

Fourth. The remaining five parts, or five-sixths of my whole estate, I hereby give, devise and bequeath to my said son Roswell F. Blodgett, and to his heirs, in trust for the following purposes, to wit: 1st. To pay the annual income and profits of two-sixths of the whole estate to my wife Frances C. Blodgett during the full term of her natural life, to be by her received in lieu of dower. 2d, To pay the annual income and profits of one-sixth of my estate to my daughter Anna E. Blodgett during her natural life. 3d, To pay the annual income and profits of one-sixth of my estate to my daughter Jane F. Cowles, wife of George A. Cowles of Philadelphia, during her natural life. 4th, To pay the annual income and profits of one-sixth of my estate to my daughter Leila F. B. Clapp, wife of John B. Clapp of said Hartford, during her natural life.

Eighth. After the decease of my daughter Leila F. B. Clapp, I direct said trustee to transfer and deliver to her legal issue, if any she shall leave surviving her, the one sixth part of my estate, the income of which she had during her life, to be theirs and their heirs' forever."

Blodgett v. American National Bank.

Frances C. Blodgett is the widow, and Anna E. Blodgett, Leila F. B. Clapp and Jane F. Cowles are the children, and John Roswell Clapp is the only grandchild of the deceased. John Roswell Clapp is a minor.

Rowland Swift, president of the respondent bank, named as one of the executors in the will, declined to act. Roswell F. Blodgett, one of the respondents, son of the testator, named as the other executor in the will, accepted the trust, gave bonds, and has acted as sole executor in the settlement of the estate. On April 1st, 1876, by order of the probate court, a distribution was made of the estate according to the terms of the will, which was duly accepted by the court. The terms of the distribution have been known to the several distributees since the same was so made and accepted. Since the distribution Roswell F. Blodgett has had the sole charge and control of the estate as trustee for the several distributees, according to the provisions of the will. None of the shares of stock distributed have been transferred into the names of the several distributees, or into the name of Roswell F. Blodgett as trustee.

From 1863 to January 16th, 1875, Roswell Blodgett was a member of the firm of R. F. Blodgett & Co., a copartnership doing business in Hartford as dealers in iron and steel. Roswell Blodgett and Roswell F. Blodgett comprised the firm until 1867, when the said John B. Clapp became a member thereof, and from that time until January 16th, 1875, the firm consisted of the two Blodgetts and Clapp.

On the 16th of January, 1875, Roswell Blodgett, Roswell F. Blodgett and John B. Clapp made a new copartnership agreement in writing, of which the following were the principal provisions:

“That said parties, for the purpose of carrying on the iron and steel business as now carried on in said Hartford by the firm of R. F. Blodgett & Co., have agreed to unite their money and services upon the following terms, agreements and conditions, to the performance of which they mutually bind themselves, each to the other, his

Blodgett 0. American National Bank.

executors and administrators; and said Roswell Blodgett hereby agrees and provides that his death shall not dissolve the partnership hereby formed, but his executor or executors or other legal representatives, without giving special bond, shall act in his stead in the performance of all the stipulations herein contained.

“ That the firm name of said partnership shall be R. F. Blodgett & Co., from the date of this instrument to April 1st., 1875, and from and after said April 1st shall be Blodgett & Clapp, and shall continue from the date of this agreement to March 31st, 1878.

“ That the firm hereby constituted shall succeed to and be possessed of all the property of every kind and description belonging to the firm of R. F. Blodgett & Co., as heretofore existing, and the interest of each party hereto in said last mentioned firm, as appears by its books, shall be a part of the capital of this firm, and shall be credited to each member upon the books of the new firm as capital stock furnished by him, upon which interest shall be allowed as hereinafter provided; that said Roswell Blodgett shall furnish for the use of this firm the store and lot now occupied by R. F. Blodgett & Co., on Market street; and that to supply the needed additional capital said Roswell Blodgett shall furnish in cash, within six months from the date of this instrument, twenty-five hundred dollars; that said Roswell F. Blodgett shall furnish in cash twenty-five hundred dollars; and that said Clapp shall sell, at the earliest practicable time, all real estate owned by him not situated in proximity to said Market street store and lot, together with at least three fourths of all his stock in the Hartford Axle Company and Hartford Foundry & Machine Company, and all of his driving horses except one, and put the entire proceeds of all said sales into the business of said partnership

“ That interest at the rate of seven per cent. per annum shall be allowed to Roswell Blodgett, on the cost of said store and lot, the same being about thirty thousand dollars, and on the amount of capital furnished by him, which inter

Blodgett v. American National Bank.

est shall be credited to him on the books of the firm during the first year only and thereafter shall be paid semi-annually in cash.

“ That interest at the rate of six per cent. per annum shall be allowed to Roswell F. Blodgett and John B. Clapp on the capital furnished by them, which shall be credited to them on the books of the firm; and that threefourths of the profits of said business shall belong to said Clapp and one-fourth to said Roswell F. Blodgett; and all losses shall be borne by them in the same proportion.

“ That if any capital can be spared from the business of the firm the same shall be paid to Roswell Blodgett or his legal representative in reduction of the amount of capital furnished by him.

“ That in case of the death of said Roswell Blodgett, the consent of his executor or other legal representative shall be obtained, whenever by the terms of this agreement the consent of said Roswell Blodgett if living would be required."

After April 1st, 1875, the copartnership formed by this agreement did business under the firm name of Blodgett & Clapp. The copartnership formed under the agreement of January 16th, 1875, carried on the same business as the original firm of R. F. Blodgett & Co., taking all its assets and assuming all its liabilities. The amount of Roswell Blodgett's capital stock in the firm of R. F. Blodgett & Co. at the time of his death was inventoried at $38,423. The firm of R. F. Blodgett & Co. from 1863 to the death of Roswell Blodgett had dealings with and an account in the respondent bank, and the bank from time to time discounted and renewed the business accommodation paper of the firm. On the 9th day of January, 1875, the bank held under discount business paper of R. F. Blodgett & Co. to the amount of $8,900, and accommodation paper to the amount of $37,800, and held substantially the same amounts on the 16th of January, 1875, and the firm was then an indorser of the paper of the Woodruff Iron Works, in the sum of $40,000. While he lived, the credit of the firm

Blodgett 0. American National Bank.

with the bank depended chiefly on Roswell Blodgett, who had brought the account of the firm to the bank, and was a man of large means.

After the death of Roswell Blodgett the firm continued to do business with the bank without interruption, anıl kept an account at, and had both business and accommodation paper discounted by the bank, the amount of which gradually increased, till on the 10th of October, 1876, it amounted to about $92,000. The business paper of the firm so discounted consisted of customers' notes endorsed by the firm, and the accommodation paper consisted of notes of the firm alone.

About October 10th, 1876, the bank, by Rowland Swift, its president, required of the firm some additional security for its indebtedness as a condition of further loans by way of discounts, and Roswell F. Blodgett in behalf of the firm agreed to give such security. Thereupon, on the 10th of October, 1876, Roswell F. Blodgett made and delivered to the bank the three notes for $33,500, $29,500, and $10,000 respectively, set forth in the bill. At the same time he delivered to the bank as security for the payment of the note of $33,500, certificates of three hundred and thirtyfour shares of the stock of the Adams Express Company; to secure the note for $29,500, certificates of one hundred and forty shares of the stock of the Ætna Insurance Company; and to secure the note for $10,000, certificates of one hundred and twenty shares of the stock of The Pratt & Whitney Company; he also gave in each case his power of attorney for the transfer of the stock.

Of the shares of the Ætna Insurance Company stock so pledged, forty-four shares were subsequently sold by the bank on the order of Roswell F. Blodgett, and the avails applied to retire a part of the indebtedness of the firm to the bank. Of the shares thus sold, twenty-four were set to said Roswell F. in the distribution, and twenty shares to him as trustee for Mrs. Frances C. Blodgett.

All the stocks so pledged to secure these three notes belonged to the estate of Roswell Blodgett, and were

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