Hanstein v. KellyHanstein v. Kelly
In resisting the assessment, the executrix insists that in the spring of 1937 this accumulation of cash was donated by the decedent to her, his wife, in trust to be expended fоr the education of their son and two daughters, and that this fund should not have been incorporated as a part of the taxable estate passing under the decedent‘s will. This point was emphasized in the proofs submitted to the Commissioner. He concluded, however, that the еvidence failed to establish either a valid gift or a voluntary trust inter vivos.
It is observed that the Commissioner does not propose that the alleged inter vivos transfer, if in fact made by the decedent, is taxable as one made in contemplation of death, or as one designed to take effect in possession or enjoyment at or after the death of the decedent. Therefore, the basic controversial question is whether the decedent during his life and on the stated occasion made a valid gift of this money to his children, or created a voluntаry trust for their benefit in respect thereof. This, of course, is a factual inquiry, and its solution must necessarily be harvested from the record and proofs submitted to the Commissioner.
Where the determination of the Tax Commissioner is investigated on appeal, the Ordinary now reviews the proofs to ascertain the true and actual facts and circumstances. Legitimate and logical inferences are drawn from the facts deemed to be established and the evidence is duly weighed. Kellogg v. Martin, 130 N.J. Eq. 338; 22 Atl. Rep. 2d 430.
In the consideration of the issues here presented, it may be assumеd that the essential elements necessary to prove an inter vivos gift or a voluntary trust are identical. Zimmerman v. Nauhauser, 119 N.J. Eq. 424; 183 Atl. Rep. 820; Travers v. Reid, 119 N.J. Eq. 416; 182 Atl. Rep. 908; Bankers Trust Co. v. Bank of Rockville, c., 114 N.J. Eq. 391; 168 Atl. Rep. 733; Nicklas v. Parker, 69 N.J. Eq.
The requisite elements of a gift inter vivos are: first, a donative intent on the part of the donor; second, an actual delivery of the subject-matter of the gift; and, third, an absolute relinquishment by the donor of all ownership and dominion over the subject-mattеr of the gift, at least to the extent practicable or possible, considering the nature of the thing given. Taylor v. Coriell, 66 N.J. Eq. 262; 57 Atl. Rep. 810; Swayze v. Huntington, 82 N.J. Eq. 127, 133; 87 Atl. Rep. 106; affirmed, 83 N.J. Eq. 335; 91 Atl. Rep. 1071; Besson v. Stevens, 94 N.J. Eq. 549, 556; 120 Atl. Rep. 640; Stevenson v. Earl, 65 N.J. Eq. 721; 55 Atl. Rep. 1091; Nicklas v. Parker, supra; Conners v. Murphy, 100 N.J. Eq. 280; 134 Atl. Rep. 681; Page v. Afflerbach, 102 N.J. Eq. 390; 140 Atl. Rep. 792; affirmed, 104 N.J. Eq. 489; 146 Atl. Rep. 916; Reeves v. Reeves, 102 N.J. Eq. 436; 141 Atl. Rep. 175; Kirkpatrick v. Kirkpatrick, 106 N.J. Eq. 391; 151 Atl. Rep. 48; First National Bank of Lyndhurst v. Rutherford Trust Co., 109 N.J. Eq. 265; 157 Atl. Rep. 142; Salmon v. Pittenger, 122 N.J. Eq. 165; 193 Atl. Rep. 843.
Similarly, a voluntary trust, as distinguished from one supported by a consideration, is inherently a gift, and it must be fully declared to render it effective as such. Austin v. Young, 90 N.J. Eq. 47; 106 Atl. Rep. 395; Cessna v. Adams, 93 N.J. Eq. 276; 115 Atl. Rep. 802.
To prove satisfactorily the existence of each of the essential elements of a gift inter vivos, the evidence should be clear, cogent and convincing. Cessna v. Adams, supra; Stines v. Carton, 98 N.J. Eq. 415 (at pp. 419, 420); 129 Atl. Rep. 251; Reeves v. Weber, 111 N.J. Eq. 454; 162 Atl. Rep. 566.
Turning, now, to the proofs in the record embracing the reports, appraisal, affidavits and depositions upon which the Commissioner based his conclusion, it is evident that Walter Hanstein, a resident of Atlantic Cоunty, died testate on January 16th, 1940, at the age of forty-six years, leaving him surviving his widow, who is the executrix nominated in his
A thoughtful consideration of all of the evidence introduced by and on behalf of the appellant reveals that in some significant particulars it is irreconcilably divergent, аnd in others positively contradictory. Strangely, the two envelopes containing this substantial amount of cash seem to have been unobserved by the district supervisor in the preparation of his inventory of the contents of the safe deposit box. Oddly, the executrix ignored this fund in thе verified return originally presented to the Commissioner, although in schedule “C” she was obliged to state specifically all transfers of any property made at any time by the decedent in trust by deed or agreement. Still later, she deposed that in the deposit box at the Equitablе Trust Company at the time of the decedent‘s death, there was an envelope bearing the endorsement to which reference will be presently made, containing $11,876.91 in cash. She states that this fund in cash was given by the decedent to her in trust in the year 1931, and that the fund has been continuously thereafter held by her either in the form of cash or government bonds. No mention whatever of the additional $20,000 is made by her in this affidavit.
Her testimony introduced at a later date, succinctly stated, tends to divulge that in 1931 Mr. Hanstein became somewhat apprehensive of the financial stability of the building and loan associations in which he had invested and he thereupon
The appellant then observes that in November, 1937, “Mr. Hanstein converted these bonds into cash * * *.” It seems evident, however, that the brokers remitted the proceeds of the sale ($31,887.21) to Mrs. Hanstein. When and where the check payable to Mrs. Hanstein was cashed; under what circumstances portions of this currency were placed in two envelopes; and why the funds, like the one installment of interest, were not deposited to the credit of the children or in trust for them, remain unelucidated. There were no expenditures made from this fund. The safe depоsit box was registered in the name of the decedent and of his mother, as lessees. The appellant evidently was authorized to visit it.
Another quotation from the testimony of the appellant is illuminating:
“Mr. Hanstein was a young man with unusually good judgment, he wanted the control, he wanted to be able to give me advice on how to control the investment of that substantial fund because if I didn‘t go to him when half the town was it would have been a little unnatural. He didn‘t want to be hampered with court permission and this and that and the other, he knew between ourselves we would maintain this trust аnd he thought it was more fluid this way for handling to the children‘s advantage therefore he didn‘t set up any formal trust.”
The expressions “he wanted the control,” “he didn‘t want to be hampered with court permission,” “he knew between ourselves we would maintain this trust * * *” are exceedingly significant.
Another сonflict in the evidence attracts notice. In an affidavit sworn to by one Gladys B. Rockford on May 28th, 1940, this deponent declares with emphatic certainty, that as the secretary of the decedent, she knows that the envelope bearing the mentioned endorsement rеmained in the safe deposit box from about the year 1931. This testimony is manifestly discordant with the assertion that the endorsement was inscribed by the decedent on the occasion in 1937.
If the superficial import of all the evidence is penetrated more inquisitively, the probable truth becomes perceptible. The decedent undoubtedly had the profound interest of an
The decedent was a learned, able and experienced lawyer whо was perfectly aware of the means of creating and evidencing a voluntary trust or a valid gift. The appellant is also an intelligent and trustworthy person. The indecisive posture of her husband concerning this fund has occasioned confusion in her interpretation and exposition of the intent of the decedent.
Appellant has cited several decisions in which alleged trusts or gifts were found substantiated by the proofs. Examination of those decisions reveals that the evidence in those cases was of a more convincing charаcter than that offered in this case or they were aided by statutory provision.
In Bankers Trust Co. v. Bank of Rockville, c., supra, the evidence of the inter vivos gift to the children was clear and explicit and was furnished by an impartial party.
In Dill v. Dill, 118 N.J. Eq. 374; 179 Atl. Rep. 370; affirmed, 119 N.J. Eq. 467; 183 Atl. Rep. 172, an assignment of a mortgage was questioned. Due execution and
In Janes v. Falk, 50 N.J. Eq. 468; 26 Atl. Rep. 138, the trust was declared by a writing, a speech and an allocation of the indicia to the estate papers. No such unequivocal acts are found in the instant proofs.
So, also, in West Jersey Trust Co. v. Read, 109 N.J. Eq. 475; 158 Atl. Rep. 113. The trust was a written declaration and the evidences of the trust fund were found in the safe deposit box of the alleged beneficiаry.
The decision in Hickey v. Kahl, 129 N.J. Eq. 233; 19 Atl. Rep. 2d 33, is rested upon a statute relating to the ownership of funds in bank accounts opened by A in trust for B. Cf. Thatcher v. Trenton Trust Co., 119 N.J. Eq. 408; 196 Atl. Rep. 470; Travers v. Reid, supra.
Viewed judicially, the evidence introduced to prove the essential elements of the alleged gift or voluntary trust is not persuasive. The many infirmities in this evidence destroy its probative value. Admittedly, the decedent owned the bonds from which the cash was derived and the cash was discovered in a safe deposit box registered in the name of the decedent and his mother. The mother disclaims ownership of the cash. From the circumstances, a presumption arises that the decedent was the owner, unless overcome by sufficient evidence of ownership in another. Rabassa v. Raab, 95 N.J. Eq. 255 (at p. 256); 122 Atl. Rep. 309; Salmon v. Pittenger, supra; 65 C.J. 318 § 80.
I apprehend that even if the registry of the box had also included the name of the appellant, a like presumption would
The conclusion is that the evidence fails to establish the existence of the alleged inter vivos gift or voluntary trust. The fund was properly incorporated as a part of the taxable estate passing under the will of the decedent. The determination of the State Tax Commissioner and the assessment are therefore affirmed.