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TITCOMB v. BILLINGS

March 7, 1952

TITCOMB
v.
BILLINGS, OLCOTT & CO., et al.



The opinion of the court was delivered by: CONGER

This is an action by the plaintiff, as administrator c. t. a. of the goods, chattels and credits left unadministered of George E. Titcomb, deceased, against present and former members of the stockbrokerage firm of Billings, Olcott & Co.

The complaint contains two claims for relief; one for the recovery of moneys and securities belonging to the estate of George E. Titcomb, deceased; another in the alternative, for an accounting for such moneys and securities.

George E. Titcomb died a resident of Brooklyn on April 1, 1928 leaving a Last Will and Testament which was admitted to probate in the Surrogate's Court of Kings County on May 24, 1928. His widow, Anna G. Titcomb, was appointed Executrix on the same date.

 The Will of the deceased provided that his widow should enjoy the income from the estate during her lifetime and that upon her death the principal should be divided equally among their three children, John H. Titcomb, Helen Titcomb Auchterlonie and George P. Titcomb.

 The principal portion of George E. Titcomb's estate in New York consisted of common and preferred stocks.

 On March 1, 1929, an account was opened with Billings, Olcott & Co. in the name of 'Estate of George E. Titcomb' in which account the estate securities were deposited. Their value exceeded $ 62,000.

 Through trading, apparently both by straight purchases and sales and on margin the estate was practically wiped out by December 31, 1931, at which time the account showed a long holding of 100 shares of Loew's, Inc., a 51/600 th share of Electric Bond & Share, and a short holding of 33 Consolidated Gas Rights.

 It appears that the decedent's son, John, not only advised his mother in connection with this account, but personally directed and authorized all the transactions therein on behalf of the Executrix.

 There appears to be no doubt about the illegality of the mother's speculative activities with the estate property, nor that the defendants had full knowledge of the trust character of the property.

 The defendants set up the statute of limitations and laches in their answers and it was agreed at pre-trial conference that these defenses should be disposed of before any other issues are tried.

 The complaint was filed on March 22, 1948.

 Between March 1, 1929, when the account was opened, and the end of 1931, the account was active. After that time, the account was dormant until January 7, 1938, when it was closed out by the delivery to Anna G. Titcomb of 100 shares of Loew's, Inc. and 51/600 ths of a share of Electric Bond and Share and the sum of $ 84.38, representing the credit balance then on hand.

 It appears that the Executrix delivered the 100 shares of Loew's to John, who presently possesses them along with 200 additional shares of such stock later acquired as a result of a three for one split.

 The Loew's stock when so delivered was registered in the name of Billings, Olcott & Co., but endorsed in blank and remained so until it was surrendered to Loew's transfer agent by John H. Titcomb for transfer to his name on March 19, 1934. Until that time dividends had been paid to Billings, Olcott and remitted, after some accumulation, to the Executrix in February, 1940, and to John in January, 1941 and January, 1943.

 The plaintiff's first claim for relief is one at law for money had and received, or for damages for an injury to property, i.e., a conversion. The period of limitation applicable is six years, New York Civil Practice Act, Sec. 48(1) and former Sec. 48(3).

 The plaintiff's second claim is one in equity for an accounting for which the period of limitation is ten years. N.Y.C.P.A. Sec. 53.

 Except for the payment of dividends in 1940, 1941 and 1943, there was no transaction within ten years of the commencement of this action on March 22, 1948. Unless, therefore, the operation of the statute of limitations was suspended in some way, or the payment of the dividends has some special significance, it is plain that the claims are barred.

 The gravamen of both claims for relief consists of an alleged participation by the defendants in an alleged breach of trust by the Executrix of the Titcomb Estate. And it appears that the liability of a third party participator in a breach of trust arises when the acts complained of occur. Hart v. Goadby, 1911, 72 Misc. 232, 129 N.Y.S. 892; Brooklyn Bureau of Charities v. Manufacturers Trust Co., 1939, 257 App.Div. 858, 12 N.Y.S.2d 688 (2d Dept.); Guild v. Hopkins, 1946, 271 App.Div. ...


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