21 So. 2d 331 | Ala. | 1944
Lead Opinion
Bill in the nature of bill of interpleader filed by appellant Clark as the administrator of the estate of Cora E. Hunter, against Annie Lou Young and the State National Bank, a corporation, seeking to settle the adverse claims of the complainant and Annie Lou Young to a certificate of deposit issued by said Bank, representing an indebtedness of $7,650 including interest. Said certificate of deposit is in the following words and figures: *533
"Certificate of Deposit "State National Bank "Due June 23, 1943 No. 2106 "Falkville, Ala., June 23, 1942 This Certifies that Mrs. Cora E. Hunter has deposited in this Bank $7,500.00 Seven Thousand Five Not Hundred and no/100 Dollars Payable to Mrs. Cora E. Subject Hunter or Mrs. Annie Lou Young or Survivor 12 months to after date, on the return of this Certificate Check properly endorsed, with interest at the rate of 2 per cent, per annum, interest then to cease.
The Banking Act of 1933 provides that this Certificate may not be cashed before maturity and that no interest be paid after maturity.
"V. O. Clark Manager "Not Subject to Check'
"Not Subject to Check"
The appellant claimed the certificate of deposit, which came into his possession as administrator of the estate of Cora E. Hunter, deceased, on her death, as the personal representative of said Hunter. Mrs. Young claimed the certificate, — as a gift inter vivos; as a gift causa mortis, or as joint deposit — constituting a contract, vesting in her the right of survivorship.
The circuit court denied her claim on all of said theories, except the last, holding that her right of survivorship was created by contract.
From that decree the administrator has appealed. Rule 36, Equity Practice, succeeding § 10390 of the Code of 1923, authorized the course of procedure taken by the parties. Code 1940, Title 7, Appendix, page 1081.
The statute, Code 1940, Title 5, § 122, provides: "No certificate of deposit, issued by a banking corporation or trust company for any special deposit for which interest is to be paid, must be reissued but, on the return thereof, must be cancelled."
In the light of this statute, each such deposit rightfully made stands on its own footing, unhampered by previous dealings between the parties in respect to the money rightfully deposited. There is no question that the money deposited belonged to Mrs. Hunter, or that she had the right to deposit the same, as she did.
The legal effect of the transaction evidenced by certificate No. 2106, of date June 23, 1942, was a loan of money by Mrs. Hunter to the bank, vesting the title to the money — the $7,500 — in the bank, creating the relation of debtor and creditor, and the certificate which partakes of the nature of a promissory note is a chose in action, evidencing the right of its owner, at the due date thereof, upon proper indorsement and surrender to call the loan. 7 Am.Jur. 316, § 445; Blakey v. Brinson,
We concur in the conclusion of fact stated in the decree of the circuit court (which the reporter will reproduce in the report of the case). At no time prior to the death of Mrs. Hunter, or since, has the claimant Mrs. Young acquired any vested interest in or right to possession of said chose in action. As to it Mrs. Hunter died intestate and the legal title passed to and vested in her personal representative. In this controversy between the administrator, the adverse claimant and the depository bank, the administrator represents the interest of the estate, including that of distributees, who may be proper parties, but are not necessary parties to the proceeding. Sovereign Camp, W. O. W., v. Snider,
Under the facts stated in the decree, Clark, the custodian of the key to Mrs. Hunter's box, was Mrs. Hunter's agent, and there was no evidence showing delivery of the certificate in Mrs. Hunter's lifetime to Mrs. Young. Mrs. Young had no connection with the transaction evidenced by certificate of deposit No. 2106 and knew nothing about it. On principles stated in Smith v. Eshelman,
To support a claim under the contract theory there must have been a joint ownership and, in the absence of such vested interest during the life of the depositor, the right of survivorship does not exist. First Nat. Bank of Birmingham v. Lawrence,
Cases cited by appellee wherein a joint account was maintained on which both parties had the right to check, or a joint savings account to which both parties contributed showing a vested interest in both parties, are inapt as authorities to sustain the decree. Cases in that class cited and relied on by appellee are Deal's Adm'r v. Merchants Mechanics' Sav. Bank of City of Norfolk,
The decree of the circuit court in so far as it awards the certificate of deposit No. 2106, of date June 23, 1942, described in the bill to Annie Lou Young, is reversed and annulled, and one will be here rendered ordering, adjudging and decreeing that said certificate of deposit is the property of the estate of Cora E. Hunter, the legal title to which is in the appellant, V. O. Clark, as the administrator of her estate, for the purposes of administration.
The decree of the circuit court in so far as it allowed and fixed a solicitor's fee of $500 to be paid the solicitor of the State National Bank is not questioned, and in that respect the decree is affirmed, and the Bank is authorized to deduct that sum for the use of its solicitor, Harris, and pay the balance thereof to the administrator upon the presentation of the certificate of deposit duly endorsed by him as administrator, and such payment shall be in full of its liability.
The costs of the appeal and of the case will be taxed against Annie Lou Young, with issue of execution for their collection.
Reversed and rendered in part, and in part affirmed.
GARDNER, C. J., and LIVINGSTON and SIMPSON, JJ., concur.
Concurrence Opinion
We base our concurrence in the conclusion reached in the opinion of BROWN, J., upon the basis of the finding that the certificate was never delivered to Mrs. Young but was retained in possession of Mrs. Hunter's agent, she reserving and retaining exclusive control thereof and the indebtedness it represented, and had no intention to create a present interest in the instrument for Mrs. Young. We regard that as the controlling incident to determine the rights of Mrs. Young. The great majority of cases are in accord with this view. 103 A.L.R. 1124; 48 A.L.R. 205-206; 7 Amer.Jur. 304, § 431. The terms of the certificate of deposit alone are not always controlling. But it may be interpreted in respect to whether a present interest was intended by all the circumstances attending it. Hill v. Hill et al.,
In the case of Hicks v. Meadows,
Dissenting Opinion
Upon reconsideration I find myself unable to agree. That the result is deplorable, all must concede. The record discloses that from the time of the collection of this money in 1938 by Mrs. Hunter (the proceeds of a policy of insurance on the life of her deceased husband), Mrs. Hunter has endeavored to make suitable arrangements to the end that Mrs. Young, her niece whom she had raised and of whom her husband was very fond, should become the owner of this fund.
Different characters of deposits were made in the bank looking to this end. But this certificate now in question was issued in its present form on the advice of Mr. Cottingham, president of the State National Bank at Decatur. Mrs. Hunter sought his advice in regard to arranging for Mrs. Young to acquire this money at her death, in the meantime the interest on the certificate to go to Mrs. Hunter. Mr. Cottingham, advising her how this could be done, told her "to have the certificate of deposit made payable to Mrs. Hunter or Mrs. Young or the survivor."
As I understand the record, this certificate was prepared by Mr. Clark, cashier of the bank, in the form advised by Mr. Cottingham, and as set out in the majority opinion. This certificate discloses that the $7,500 was deposited by Mrs. Hunter, but was made payable to "Mrs. Cora E. Hunter or Mrs. Annie Lou Young or survivor 12 months after date." It expressly discloses that it was not subject to check, and required the return of the certificate properly endorsed. It bears interest at the rate of 2% per annum, the interest to cease at maturity. It is signed by Mr. Clark, manager. It is clear enough, therefore, that *538 Mrs. Hunter, Mr. Clark, the manager, and Cottingham, the president of the bank, all understood and confidently believed that, should Mrs. Hunter die before Mrs. Young, the certificate would be payable to the latter just as the contract of deposit provided. Mrs. Hunter died before the due date of this certificate; and during this period the money was beyond the control of either Mrs. Hunter or Mrs. Young, as under the express terms of the contract it was not then subject to check. It would seem, therefore, quite clear the result is unfortunate and to be deplored.
I am well aware of the oft-repeated statement that "hardships make shipwreck of the law," and I would be the last to favor the overturning of a well-settled principle merely in order to meet a hard case. But when such hardships do appear, it should suffice to make us pause and carefully consider whether or not in fact any sound principle of law would be disturbed by a contrary ruling.
As I stand alone in this disagreement, it would serve no useful purpose to enter into anything like a discussion of the principle upon which I think Mrs. Young is entitled to this money. That principle is referred to, by way of brevity, as the "contract theory." This contract theory has been treated in numerous cases which will be found cited in 149 A.L.R. 897, 898; 135 A.L.R. 1021 et seq.; 103 A.L.R. 1140 et seq.; 7 Am.Jur. p. 308; 9 C.J.S., Banks and Banking, § 286, p. 595, 596 and note 4. Perhaps the reasoning as found in Re Estate of Staver,
I am persuaded the majority opinion gives too little importance to the fact that this deposit contract showed upon its face that the money is payable to Mrs. Hunter or to Mrs. Young, or the survivor. Had Mrs. Young died before Mrs. Hunter, clearly enough Mrs. Hunter could have endorsed the certificate, delivered it to the bank and demanded the money. I am unable to see why the same result would not follow in favor of Mrs. Young upon the death of Mrs. Hunter. That was the contract, a perfectly valid one, entered into by Mrs. Hunter with the bank, and upon advice and cooperation of the president and the cashier. From Mrs. Hunter's standpoint, it was clearly a contract made for the benefit of Mrs. Young. Our authorities are uniform to the effect that one for whose benefit a contract is made may, though not a party thereto, nor furnishing any of the consideration therefor, maintain action thereon against the promisor. A number of our cases to this effect will be found cited in Employers Ins. Co. v. Rhodes,
The opinion cites First National Bank v. Lawrence,
As to that feature of the contract which looks to a surrender of the certificate, no difficulty here appears. This certificate was left by Mrs. Hunter in her box, and placed by the cashier in the vault of the bank with the only key to the box left in possession of the cashier. This provided ready access to the certificate, which, according to the contract, the cashier could produce for Mrs. Young that she might properly endorse the same and receive the money. Thus the statute referred to in the majority opinion would be fully met, and, indeed, the contract upon its face so provided, and the bank amply protected.
We find nothing in Meyerson v. New Idea Hosiery Co.,
Some stress appears to be laid upon the case of Hicks v. Meadows,
The majority opinion indicates that an endorsement of the certificate in the lifetime of Mrs. Hunter was necessary under the statute in order to protect the bank. But it appears to me this overlooks the fact that the bank had entered into a binding contract to pay this money to Mrs. Young in the event of Mrs. Hunter's death, the bank having full control of the certificate for the very purpose of its delivery and endorsement by the survivor, all in accordance with the statute, the contract, and settled principles of law.
I am persuaded, therefore, that Mrs. Young is entitled to this money upon the theory of a valid contract between the bank and Mrs. Hunter made for Mrs. Young's benefit. This is the theory upon which the trial judge acted, and in my opinion his opinion should be here affirmed.
I forego further discussion, but for the reasons indicated, respectfully dissent.
Addendum
We challenge, as unwarranted, extravagant and untrue in law or fact, the statement in appellees' application for rehearing that, "The court in its opinion in this case has stricken down a valid contract in the form of a certificate of deposit and has in effect declared it invalid," and assert to the contrary, that the opinion upholds the integrity of said certificate of deposit, and declares its true legal effect.
On the other hand, we assert that the appellees in said application for rehearing ignore the statute, Code 1940, Tit. 5, § 122, which, for the protection of the parties, whether dead or alive, gives to such certificate of deposit the character of a courier without luggage, representing the title and right which it evidences, protecting the depository and the depositor against doubtful and uncertain claims founded on dubious facts resting in parol. Such contract is within the rule that its obligations cannot be altered or varied by parol testimony. 7 Am.Juris. p. 353, § 493; Renfro Bros. v. Merchants Mechanics' Bank,
"A bank is not bound to pay deposits evidenced by a certificate of deposit, except on production and surrender of the certificate properly indorsed, and acts at its peril in doing so, * * *." 9 C.J.S., Banks and Banking, § 316, p. 643, "c — Conditions Precedent"; Hicks v. Meadows,
The appellees ignore the stipulation in the contract that it is "Payable to Mrs. Cora E. Hunter or [not and] Mrs. Annie Lou Young or survivor twelve months after date on the return ofthis certificate properly endorsed," which clearly evidences *535 the fact that this certificate represents the right and title to the chose in action, and its delivery to other than the original holder with the intention to vest such title is essential to pass the title, and give the holder a right to present, endorse and collect the debt which it evidences. [Brackets and italics supplied.]
The appellees in the application for rehearing strenuously insist that this court by construction and the consideration of illegal, immaterial and incompetent evidence, engraft on to said contract something that does not appear in the contract itself. It clearly appears from the opinion of the trial judge that the only evidence that was considered, and correctly so, was the certificate of deposit issued on June 23, 1942, and the evidence of Clark as to the custody of said certificate. We quote from the opinion of the Court: "The money deposited in said bank in consideration of which said certificate of deposit was issued was the sole property of Cora E. Hunter, and the defendant Annie Lou Young owned no part of same. Said certificate of deposit was retained by V. O. Clark in his capacity as agent for Cora E. Hunter, and the said V. O. Clark held said certificate of deposit in his capacity as agent for Mrs. Hunter, and not as agent of Mrs. Young. In making said deposit it was the intention of Cora E. Hunter that Annie Lou Young should at the death of Cora E. Hunter become the owner of the indebtedness and of the sum of money evidenced and represented by said certificate of deposit, but it was also the intention of the said Cora E. Hunter to reserve possession and full control and dominion over the certificate of deposit and over the money in consideration of which it was issued during her life time, and it was her intention that Mrs. Young should have no interest or right to the same until the death of Cora E. Hunter. * *."
This interpretation of the writing demonstrates that there was not a perfected gift inter vivos, and that the provisions in the certificate of deposit as to Mrs. Young were testamentary in character, and ineffectual to pass the title at Mrs. Hunter's death, for failure to observe the requisites for executing a last will and testament. Hicks v. Meadows et al.,
Bowie v. Phenix-Girard Bank et al.,
The fault in appellees' argument is that it deals with the deposit in the instant case as a joint deposit by Hunter and Young, when, as we have pointed out repeatedly, this is not a joint deposit, and cases dealing with such deposits are not apt authority here, nor are the cases dealing with special deposits, where the thing deposited is to be kept intact to be returned to the depositor.
The bank, in the instant case, had no interest whatever in the certificate of deposit. It was the property of Mrs. Hunter and evidenced the obligation of the bank to pay. Neither did Clark, the cashier of the bank, have any interest in said certificate. He was the mere custodian of *536
Mrs. Hunter. Hence, Smith v. Eshelman et al.,
We have examined the other cases cited by appellee and do not find them applicable or helpful here. In re Edwards' Estate,
In Ladner et al. v. Ladner et al.,
By this agreement the court held that a parol trust was created, but the difference between that case and the case at bar is, the children each had a present vested interest, and the bank held the same in trust for Ladner, and his children, interest to go, to Ladner, and the principal to the children at his death.
In Sturgis v. Citizens' Nat. Bank of Pocomoke City et al.,
In the instant case, as we have pointed out, the certificate was the sole property of Hunter up to the moment of her death, and on its face required that it be endorsed and surrendered by the claimant. Possession and the right to endorse were prerequisites to establish a claim to collect the certificate of deposit. The essential elements of a trust were absent. Birmingham Trust Savings Co. v. Marx,
Nor is the claim of Young sustainable on the theory that the certificate of deposit constituted a contract made between Hunter and the bank for her benefit. She was not a party or privy to the contract. She had no knowledge of it and she had at most a contingency, depending upon obtaining the possession of the certificate of deposit, and the right to present and surrender the same. Wolosoff v. Gadsden Land Building Corporation,
It is well settled that the right of a third person for whose benefit a promise is made is affected with all the infirmities of the agreement as between the parties thereto and the authorities are uniform that a mere naked promise from one to another for the benefit of a third will not sustain an action. Meyerson v. New Idea Hosiery Co.,
Mrs. Hunter departed this life before the passage of the Act of 1943, appearing on page 128 of the General Acts of the Legislature of 1943, Code 1940, Tit. 5, § 128(2), and that act has no application here. Moreover, the act deals with joint deposits and depositors, and not with deposits made by an individual. Said act merely recognizes or establishes joint tenancy, with the right of survivorship, in joint bank deposits. First National Bank of Birmingham v. Lawrence,
Our conclusion is that the application for rehearing is without merit and is due to be overruled. It is so ordered.
Application for rehearing overruled.
All the Justices concur, except GARDNER, C. J., who dissents.
