Estate of Sawyer v. Crowell

Charles E. Crowell (defendant) cofounded the Vermont Real Estate Investment Trust (the trust) in 1980. In February 1981, the estate of Thomas C. Sawyer (the estate) (plaintiff), through its administrator, John Durrance, invested $50,000 of the estate’s funds in a six-month commercial paper in Crowell, England & Co. Durrance stressed the funds were to be invested conservatively and objected to the trust as investment. On March 5, 1981, Crowell purchased commercial paper, maturing on August 12, in Ford Motor Credit Corporation. On August 12, Durrance and Crowell discussed the reinvestment of the estate’s funds, with Durrance seeking a shorter investment period to ensure the funds would be available to close the estate. Durrance did not specify a particular investment, and Crowell invested in the trust. On October 14, Durrance ordered his secretary to correspond with Crowell to confirm the fund-withdrawal requirements. On October 15, Crowell responded in a correspondence addressed only to Durrance’s secretary that described the withdrawal requirements and disclosed that the estate funds were invested in the trust. The secretary advised Durrance of the withdrawal requirements but did not disclose that the funds were invested in the trust. Crowell believed Durrance’s silence after the October 15 correspondence was affirmance resulting in ratification. On December 31, Durrance learned that another client’s funds were invested in the trust and that the client was having difficulty withdrawing the funds. Durrance reviewed the estate file and immediately demanded the return of the estate funds from Crowell. The trust filed for bankruptcy. The estate sued Crowell for breach of contract. The trial court held that investing the estate funds in the trust constituted a material breach and ordered Crowell to return the funds with interest. Crowell appealed.