Moore Printing Typewriter Co. v. National Savings & Trust Co.
Headline: Court affirmed allowing a bank to resign as trustee and transfer contested company stock to a nominated successor trust, limiting challengers from blocking the transfer without first obtaining an injunction and bond.
Holding: The Court affirmed a decree allowing the bank trustee to resign and hand over the deposited stock to a nominated successor trust company, holding challengers must first secure an injunction with bond to stop the transfer.
- Allows trustees to resign and transfer contested trust assets to an appointed successor trust company.
- Requires challengers to obtain an injunction with bond to stop transfers.
- Trustees discharged from liability if they comply with the court’s decree and transfer.
Summary
Background
A bank called the National Savings and Trust Company held 35,005 shares of a company’s stock in trust under an agreement with multiple depositors. The bank wanted to resign as trustee and hand the stock to the New York Trust Company, its chosen successor. The Moore Printing Typewriter Company and several individuals claimed fraud, said some shares were wrongfully obtained, and filed suits and a notice claiming the stock by reason of that dispute. Other suits had led to court orders stopping the bank from removing or transferring the stock.
Reasoning
The core question was whether the bank could be allowed to resign and transfer the stock despite competing claims. The Court explained the bank’s bill sought to end its trust duties and get court protection before any transfer, not to force an interpleader fight between claimants. The Court upheld the trial court’s decree permitting delivery of the stock to the nominated successor trust company while protecting the bank from liability if it complied. The Court also found it fair to require that anyone who wanted to stop the transfer first obtain an injunction with the usual bond and security required by court rules.
Real world impact
The decision means a trustee with disputed property may ask a court to permit resignation and to transfer assets to a responsible successor, rather than keep holding contested property. Challengers who want to block such a transfer must follow court procedure, including getting an injunction with bond. The trustee, if it follows the decree, is discharged from further liability.
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