National Academy of Sciences v. Cambridge Trust Co.
Supreme Judicial Court of Massachusetts
346 N.E.2d 879 (1976)
Cambridge Trust Company (CTC) (defendant), trustee of Leonard Troland's estate, was to pay trust income to his widow Florence until her death or remarriage, after which trusteeship would transfer to the National Research Council (NRC) for a new research foundation; Florence secretly remarried in 1945 without informing CTC, yet CTC continued sending her monthly payments as 'Florence R. Troland' for 22 years until her 1967 death, during which she transferred over $106,000 to her brother-in-law. Throughout this period, CTC's regular probate-court accountings referenced payments to 'Florence R. Troland' without ever confirming her marital status, and NRC, unaware of the remarriage, never challenged the accounts; after learning of the remarriage, NRC sued to revoke the accounts and recover the improperly distributed funds, and the probate court did so, ordering CTC to pay over $114,000 in restitution. CTC appealed, and the Appeals Court found CTC had represented as fact something it did not actually know -- Florence's continued unmarried status -- without confirming it, and CTC appealed to the state's highest court.
Whether a beneficiary may challenge an account to which it had previously assented where the trustee committed constructive fraud by representing as fact something it lacked knowledge of and made no reasonable effort to verify.