58 N.J. Eq. 392 | New York Court of Chancery | 1899
On July 5th, 1883, the complainant, Florence G. Collins, was married to Walter S. Collins. She was then possessed of prop•erty consisting of bonds and other securities held for her by her mother, Mrs. Gaston. On March 7th, 1884, Mrs. Gaston handed to Walter S. Collins securities to the amount of $16,600, and took from him an acknowledgment that he received them for his wife. Among them were seven bonds of the Chicago, Milwaukee .and St. Paul Eailroad Company, six of which, on March 7th, T888, he deposited with the First National Bank of Staten Island, to secure his note for $5,500. On March 13th, 1889, he borrowed an additional sum from the same bank, gave a new note for $6,500 and deposited the remaining bond as further •security therefor. He continued to pay interest on the note ■up to the time of his death, which occurred on December 5th, 1893.
On March 14th, 1889, that is, one day after he had pledged the last bond, he executed a paper, in form, an assignment of ■certain stocks which he then owned, in the presence of John W. Loveland, his wife’s cousin. This assignment, after stating that in consideration of the loan to him by his wife Florence of the bonds in question (a statement not true in point of fact), he had pledged them as security for his note, proceeds as follows:
“ I hereby assign and set over to said Florence G. Collins, her heirs and .assigns, the following property now standing in my name, to secure her from loss in case said bonds should be forfeited by the non-payment of my said note, as therein provided, viz. [mentioning certain stocks of industrial companies], the certificates for same being hereto attached, and I authorize the ■proper persons to make the transfer of said shares on the happening of the ■contingency herein slated.
“ Witness my hand and seal this 14th day of March, A. D. 1889.
• “Witness — John W. Loveland. W. S. Collins.” [Seal.]
The question of what amounts to such a declaration has been recently before the court of appeals in Janes v. Falk, 5 Dick. Ch. Rep. 468. It was said in that case that it is not essential that the memorandum relied upon should have been delivered to any one as a declaration of trust or that the cestui que trust should have been informed of the trust. It has often been held in other cases that it is not necessary that the word “ trust" should be used by the declarant. Such being the law, it seems to me that there is enough here to show that Collins declared a trust at the time the paper was first executed. What he did was this: He, in terms, assigned and set over, using words de preesenti, certain stock standing in his name. This, assuming that the paper took effect immediately, vested in his wife not a legal title but only an equitable interest. Passing by the objection that he could not directly convey to his wife, numerous cases show that the legal title to shares of capital stock does no.t pass by formal assignment merely. The legal title, therefore, in any event, remained in Collins himself. But did Collins so intend ? If he did, then we have what amounts to a declaration of trust — that is, a declaration showing that the declarant holds
If, however, complainant’s case rested on the paper alone, I should doubt very much whether it would be maintainable for another reason. There would be an entire failure of proof that he intended the paper to become operative. It would be a dangerous thing to give effect to a deed or other instrument found in the possession of the man who had signed and sealed it or had even acknowledged it before a commissioner, without proof of delivery or of something equivalent to delivery. The evidence of Loveland appears to supply, the needed proof. He says that at the time he witnessed the paper Collins said to him:
“ I am about to use some securities of Mrs. Collins for the purpose of obtaining money, and in order to save her from possible loss in case of forfeiture for non-payment, I am here setting over to her certain securities of her own, and I wish you to witness this paper as a pledge of those securities.”
The securities were at the time, according to Loveland’s recollection, attached to the paper, This evidence shows that Collins intended the declaration to be operative from the time of its execution. The following cases are illustrations of how this subject has been dealt with, under a somewhat -similar state of facts. Ex parte Pye, 18 Ves. 140, 150; Richardson v. Richardson, L. R. 3 Eq. 686; Morgan v. Malleson, L. R. 10 Eq. 475 ; Baddely v. Baddely, 9 Ch. Div. 113; Fox v. Hawks, 13 Ch. Div. 822 ; In re Smith’s Estate, 144 St. 428.
The question then arises, how far is this declaration now
It is contended that the whole estate is liable to make-good any loss complainant may suffer if the collateral should prove to be insufficient, before it can be applied to pay the claims of general creditors. There is nothing to show that- the money which Collins obtained from the discount of his notes went into his estate, or that it now, in a changed form, constitutes part of the estate. He may have paid his debts with it, lost it or used it to maintain his family. No attempt was made to trace the money into the property of the deceased. Under these circumstances the complainant has no prior right to payment. Matter of Gavin v. Gleason, 105 N. Y. 256.