126 Misc. 155 | N.Y. Sup. Ct. | 1925
This action is in the nature of an interpleader to determine the title to a certain bank account in the bank of defendant City Bank Trust Company in the name of “ Mrs. Mary J. Brady, Mrs. Carrie B. Havens, either, or survivor, or survivors to draw,” opened August 15,1924, amounting at that date to $4,997.55. Interest of $99.95 was credited on the account January 1, 1925, making the amount thereof at the time of the trial $5,097.50, and further interest will be credited July 1, 1925, of $101.94, so that the total amount involved in the'litigation is $5,199.44. Plaintiffs claim title to this account as the administrators of Mary J. Brady, deceased; and the defendant Carrie B. Havens claims it by reason of -the fact that she is the survivor of the two alleged joint owners. The defendant City Bank Trust Company is indifferent as between the two claimants, desiring only to pay the fund to the one to whom it rightfully belongs.
The question ordinarily arises when a person deposits his own money in a bank in the name of another, and such deposits are made in a variety of ways. One method is the deposit by one person of his own funds in the name of another, without any qualification. It was held in Beaver v. Beaver (117 N. Y. 421) that in order that the title shall pass to the person in whose name the deposit is made there must be created either a trust in his favor or a gift to him; that a trust may not be implied from a mere deposit in a savings bank by one person in the name of another, and that to constitute a valid gift of personal property there must be on the part of the donor an intent to give, and a delivery, in pursuance of such intent, of the thing given to or for the donee, which delivery may be either by actually transferring the manual custody of the thing given to the donee, or by giving him the symbol which represents possession.
Another method frequently adopted is by the deposit by one person of his own money in his own name as trustee for another. The rule applicable to such cases was finally settled in Matter of Totten (179 N. Y. 112) where the court held that such a deposit, standing alone, does not establish an irrevocable trust during the lifetime of the depositor; that it is a tentative trust merely, revocable at will, until the depositor dies or completes the gift in his lifetime by some unequivocal act or declaration, such as delivery of the pass book, or notice to the beneficiary; in case the depositor dies before the beneficiary, without revocation, or some decisive act or declaration of disaffirmance, the presumption arises that an absolute trust was created as to the balance on hand at the death of the depositor.
Another form was to make the deposit in the name of the depositor and another jointly. The leading case dealing with that form of deposit is Kelly v. Home Savings Bank. When this case first came before the Appellate Division (in 103 App. Div. 141) the court adopted the statement of the rule in Farrelly v. Emigrant Industrial Savings Bank (92 id. 529), as follows: “ Where, however, the deposit is in joint names and the intent appears to create the joint tenancy,
The lourt reversed the judgment in favor of the executors of the depositor on the ground that the trial court did not give sufficient importance to the intent of the depositor, and granted a new trial. On the new trial the executors were again successful and the judgment was affirmed. (124 App. Div. 917.) The case came before the Court of Appeals (sub nom. Kelly v. Beers, 194 N. Y. 49), where the judgment was reversed. The court in the opinion (at p. 55) said: “ The possibility of so fixing a bank account that two persons shall be joint owners thereof during their mutual lives and the survivor take upon the death of the other is so well established that we may assume and need not discuss it. I think also it is so apparent that it must be conceded that the account in question on its face imports such joint ownership by appellant and the deceased with final sole ownership by survivorship. It has been written, however, in various decisions that the mere form of the account in such a case as this will not be regarded as sufficiently establishing the intent of the person making it to create a trust in behalf of another or to give to such another joint interest in or ownership of the deposit. [Citing cases.] Therefore it becomes proper to make brief reference to other facts already stated in full which tend to establish that the deceased did intend to give to her daughter the interest claimed by the latter, and that this intent was consummated in the deposit which was made and aptly and faithfully expressed in the title and form of that account.”
After discussing the facts in that particular case the court said (p. 59): “ It has been held so many times that courts will be controlled by the substance of a transaction rather than by the name given to it, that it is a matter of no importance that the particular terms ‘ joint ownership ’ and ‘ joint account ’ were not used by Mrs. Beers. The controlling question for us has been and is whether she intentionally and intelligently created a condition embracing the essential elements of joint ownership and survivorship. If she did, that was sufficient even though she did not use any particular formula in doing it. Her acts and repeated declarations indicate that she did intend to do just that which is denied, give to her daughter joint ownership in and control over this account. It is true that her daughter did not draw any checks on it during the
It thus appears that the courts had decided that in all these different forms of deposit, the decisive fact of the transfer of title was the intent of the depositor; that such intent was not to be determined from the form of the deposit alone, but it still remained a question of fact to be decided in each case from all the evidence upon that subject produced at the trial.
With the law very well settled as above stated, the Legislature in jl907 passed chapter 247 of that year, as an amendment to section 114 of the Banking Law of 1892 (Laws of 1892, chap. 689), a part of the chapter relating to savings banks, by adding this language: “ When a deposit shall be made by any person in the names of such depositor and another person and in form to be paid to either or the survivor of them such deposit thereupon and any additions thereto made by either of such persons upon the making thereof, shall become the property of such persons as joint tenants and the same together with all interest thereon shall be held for the exclusive use of the persons so named and may be paid to either during the lifetime of both or to the survivor after the death of one of them and such payment and the receipt or acquittance of the one to whom such payment is made shall be a valid and sufficient release and discharge to said bank for all payments made on account of such deposit prior to the receipt by said bank of notice in writing not to pay such deposit in accordance with the terms thereof.”
This section, as thus amended, was carried forward into the
It would seem, to have been the legislative intent to declare that when parties knowingly open an account in that form that the legal effect of their act was to create a joint tenancy in the fund, with the right of survivorship as an incident thereto.
This statute has from time to time been construed by the courts. The first case was Bonnette v. Molloy (153 App. Div. 73 [1912]). That case affected a deposit made prior to the act of 1907, and it was accordingly held not to apply, although the court said: “ If the moneys had been deposited after the enactment of this statutory provision, there could be no question but that the defendant [the survivor] would be entitled to' the fund.”
The next case was Clary v. Fitzgerald (155 App. Div. 659) in which the account read, “ Mrs. Kate Connelly or Mrs. Kate A. Fitzgerald, either or survivor, may draw,” and the court said: “ We think, therefore, that the necessary effect of this provision of the statute is that the single fact, unexplained by other competent evidence, that a deposit in a savings bank in the form in which this deposit was made fixes the respective rights of the depositors named as joint owners of the property with all the incidents attaching to such ownership. It may be true that the depositors, or their representatives, as between themselves may be permitted to show by other competent evidence that title as joint owners was not intended to be established nor in fact conferred. Inasmuch as the actual agreement as to the title would be one between the named depositors themselves, the bank would not be a party to that agreement as to the ownership of the fund; and such an agreement might doubtless be proved even by paroi evidence in a controversy between the parties to fix their relative rights to the fund. * * * We conclude, therefore, that the deposit in the bank of the fund in the form in which it was made was sufficient in the first instance to establish in this action a joint ownership in the fund with the attendant right of survivorship therein, and that no evidence of a contrary intention was presented by plaintiff.” That case was affirmed without opinion (213 N. Y. 696).
In 1914 the Banking Law was again revised (Laws of 1914, chap. 369), and this provision, section 114 of the Banking Law of 1892, as amended in 1907, and section 144 of the Banking Law of 1909, which had applied to savings bank accounts only, was continued and made applicable to banks (§ 148), trust companies (§ 198) and savings banks (§ 249) in precisely the same language, except such change as was necessary to make it applicable to the different kinds of banking institutions, and an added provision with
I have been unable to find any decision construing this section alone.
Section 249 of the Banking Law of 1914, applicable to savings banks, reads the same, but at the end thereof appears this additional provision, evidently inserted to meet the case of Clary v. Fitzgerald (supra) which practically nullified the legislative intent expressed in section 144 of the Banking Law of 1909: " The making of the deposit in such form shall, in the absence of fraud or undue influence, be conclusive evidence, in any action or proceeding to which either such savings bank or the surviving depositor is a party, of the intention of both depositors to vest title to such deposit and the additions thereto in such survivor.” This section has frequently been construed, but the decisions have hinged upon the effect of the addition, appearing only in the savings bank section, rather than that of the language which is common to the three sections which states that when a deposit is made in that form it shall become the property of such persons as joint tenants.
In McNett v. Crandell (172 App. Div. 375) the court said: “ The new Banking Law (Consol. Laws, chap. 2; Laws of 1914, chap. 369) at section 249 declares, in substance, that a deposit made in substantially this form shall be deemed the property of the persons named, as joint tenants, and that the making of the deposit in such form shall, in the absence of fraud or undue influence, be conclusive evidence, in any action or proceeding to which either such savings bank or the surviving depositor is a party, of the intention of both depositors to vest title to such deposit and the additions thereto in
In Matter of Delmore (174 App. Div. 99), a case affecting the title to savings bank deposits, the court, inadvertently citing the Wrong section, said: “ In addition, under section 148 of the Banldng Law (Consol. Laws, chap. 2; Laws of 1914, chap. 369), which re-enacted in amended form section 144 of the former Banking Law (Consol. Laws, chap. 2; Laws of 1909, chap. 10), those deposits having been made in the name of the depositor and another person, and in form to be paid to either or the survivor of them, the deposits and any additions made thereto by either of such persons upon the making thereof became the property of such persons as joint tenants and the same together with all interest thereon became their property and payable to either during the lifetime of both or to the survivor after the death of one of them. Therefore, both from the viewpoint of a valid gift, and of the vesting of title to the deposits in the survivor by operation of the Banking Law, the funds in question were the property of Mary F. McGiff and not of the estate of the decedent. Any finding to the contrary, therefore, was unwarranted.”
The next case is Hayes v. Claessens, which first came before the court in 189 Appellate Division, 449, where the court reversed a judgment in favor of the survivor. The facts involved are these: Christina McGovern had a deposit of savings in the Manufacturers' National Bank of Troy. On December 12, 1917, she signed an order reading as follows:
“ Manufacturers' National Bank of Troy, N. Y. Pay Trans to joint a/c Margaret Hayes and Christina McGovern or bearer seventy-eight hundred one 69/100 dollars, on account of money standing to my credit or subject to my control in your bank, as a special deposit on interest per pass book No. 14916.
her
“ Christina x McGovern ”
mark
The sum named with interest made up the total amount to her credit in the bank. She passed the paper with her pass book to Margaret Hayes and directed her to attend to the business as soon as she could. Margaret took the order and pass book to the bank the same day and a transfer of the entire account was made on the books of the bank to the joint account of Margaret Hayes and Christina McGovern. Christina McGovern died three days later. The court said: “ There was no other competent proof than the facts recited tending to establish a transfer to Margaret Hayes of
Upon the second trial the survivor again had a verdict, which was again reversed. (202 App. Div. 762.) The case came before the Court of Appeals (234 N. Y. 230) where the judgment was affirmed in so far as there was any evidence to sustain it, the court saying: “ One Christina McGovern had on deposit in the Manufacturers’ National Bank of Troy the sum of $8,096.49. This amount she transferred to the joint account of herself and one Margaret Hayes. It was found by the trial judge that this was done with the intention of making Margaret Hayes a joint owner of the account and with the intention that if Margaret Hayes survived, as she in fact did, she should be its sole owner. The Appellate Division, however, reversed these findings and held that there was no transfer of the $8,096.49 to Margaret Hayes, but that that sum belonged to Christina McGovern at the time of her death. There was evidence to support this finding.”
In the case of Matter of Fonda (206 App. Div. 61) the account was in a savings bank in the name of “ Elizabeth B. Fonda or Milton P. Miller, pay to either or the survivor of either ” at the time of the death of Fonda. The account was placed in this form under the following circumstances. Mrs. Fonda, a few weeks before her death, handed to her nephew, Miller, her savings bank pass book with a note to the bank reading as follows: “ Kindly make my nephew my survivor of what I have in this book and ■oblige, Very sincerely, Elizabeth B. Fonda. Milton P. Miller, nephew.” The nephew delivered the pass book to an official of the bank, who wrote on the bank book, after the name “ Elizabeth B. Fonda,” the words “ or Milton P. Miller.” The pass book
In Matter of Buchanan (184 App. Div. 237) the moneys in question originally were the property of R. and were sent to B., her attorney, with direction that he deposit the same in such form that he could at any time attend to the withdrawal thereof. He deposited them in four savings bank accounts, two of them in the name of “ Elizabeth A. Rawolle or Charles J. Buchanan as her attorney or the survivor,” and the other two in the name of “ Charles J. Buchanan or Elizabeth A. Rawolle, payable to either or the survivor of them.” The question came up by reason of the assessment of a transfer tax thereon after the death of Buchanan. The court said: “ It is not claimed here that the intention of the parties was otherwise than that sole title to the deposit should remain in Elizabeth A. Rawolle. The contention is merely this: That by the force of a certain statute, notwithstanding the will of the parties interested, the form of the deposits operated to transfer title and make Charles J. Buchanan and Elizabeth A. Rawolle joint owners thereof with remainders to the survivor. The statute relied upon is section 249 of the Banking Law (Consol. Laws, chap. 2; Laws of 1914, chap. 369). That section reads in part as follows:' When a deposit shall be made by any person in the names of such depositor and another person and in form to be paid to either or the survivor of them, such deposit and any additions thereto made by either of such persons after the making thereof, shall become the property of such persons as joint tenants.’ Then follows a provision to the effect that in such case the deposit may be paid to either depositor, or to the survivor, and that a receipt given by the person thus paid shall discharge the bank, provided notice not to pay is not previously given. This was clearly an enactment made to protect the savings banks in disbursing moneys. It did not affect the title of the depositors as between themselves, whose rights could be otherwise shown. (Clary v. Fitzgerald, 155 App. Div. 659.) No further provision, material here, was contained in this section of the Banking Law until the year 1914, when the following sentence was added thereto: ‘ The making of the deposit in such form shall, in the absence of fraud or undue influence, be conclusive evidence, in any action or proceeding to which either such savings bank or the surviving depositor is a party, of the intention of both depositors to vest title to such deposit and the additions thereto in such sur
The effect of this “ conclusive presumption ” provision was further discussed in Heiner v. Greenwich Sav. Bank (118 Misc. 326) as follows: “ It is claimed that the legislature had no authority to provide that the making of the deposit in the form stated should be conclusive evidence in any action or proceeding to which either such savings bank or the surviving depository is a party, of the intention of both depositors to vest title to such deposit and the additions thereto in such survivor. The first part of subdivision 3 of section 249 with reference to the creation of joint tenancies in
In determining the questions involved in this action it is unnecessary to consider those cases which construe only the effect of the “ conclusive presumption ” provision of section 249 of the Banking Law of 1914, as the statute applicable here is section 198, in which that language does not appear. From a consideration of all the cases, it would appear that these rules are to be followed in determining the effect of this statute: First. The statute does not apply unless the account is opened in substantially, if not precisely, the form mentioned in the statute. Second. When the account is in the statutory form, that single fact, unexplained
In this case the account is in the statutory form. Therefore, the presumption is that Mrs. Brady and Mrs. Havens were joint owners thereof, and upon the death of Mrs. Brady, which occurred December 26, 1924, the defendant Mrs. Havens, as the survivor, became the sole owner thereof. The burden of proof is upon the plaintiffs to rebut that presumption, and certain evidence has been given from which the court is asked to infer that Mrs. Brady, in making the deposit in the form which she did, did not intend “ to effect that legal result which her acts naturally and presumptively did accomplish,” to wit, the transfer of the title to this fund, which had previously been in herself individually, to a joint tenancy of herself and Mrs. Havens.
The facts are undisputed, and are as follows: Since 1912 Mrs. Mary J. Brady had an account individually in the City Bank Trust Company. On April 14, 1924, she was staying at the home of Mrs. Havens in Frankfort, N. Y., and from there she wrote a letter to Mr. Hancock, the attorney and a director of the bank and also a friend of the Brady family, as follows:
“ I wish to make my nephew's wife Mrs. Carrie Havens jointly interested with me in my account in the City Bank Trust Co. I am quite ill and cannot come to Syracuse. I should like this done soon but do not wish to lose any interest which might accumulate between now and July first. As the money will not be withdrawn from the bank I cannot see as it would make any difference whether it was done now or July first. You will advise me. Mrs. Havens can go to Syracuse any time to suit your convenience to meet you at the bank. Her daughter Mrs. Doust of Syracuse will go with her to identify her. Hope- you can fix this up for me. An early reply win be appreciated by me.
“ Sincerely,
“ MARY J. BRADY.”
“ I wrote Mr. Hancock last Monday in regard to making my nephew’s wife, Mrs. Carrie Havens jointly interested in the money that is in your bank. I am too ill to come to Syracuse, and wish to know if it can be done without my presence, and if done now, it cannot disturb the interest until July 1, as the money need not be withdrawn from the bank. Mrs. Havens can come any time, and as I have decided to do this, the sooner it is done the better. Mrs. Havens’ daughter, Mrs. Doust, of Syracuse will come with her to identify her. You will please advise me at your earliest convenience as to the things I want to know.
“ Sincerely,
“ MARY J. BRADY.”
Upon receipt of this letter the bank wrote Mrs. Brady on April 22, 1924, as follows:
“ We are herewith inclosing two blank joint account signature cards for you and Mrs. Carrie Havens to sign in order to make your personal account at this bank a joint account with Mrs. Carrie Havens. Both yourself and Mrs. Havens must sign each of the cards. When this is done, kindly return the cards and your pass book to us and we will change the account.”
The cards, which were inclosed, were signed by Mrs. Brady and Mrs. Havens and returned to the bank. They read as follows: “ Joint Account.
“ To City Bank Trust Company, Syracuse, N. Y.
“ The undersigned are opening a joint account with your bank under the title of Mrs. Mary J. Brady or Mrs. Carrie B. Havens, either or survivor, or survivors to draw. We hereby jointly and severally agree that the funds deposited in this account shall be drawn against by either the above named, or any survivor or survivors of them. Each of the above named has hereto affixed his own autograph signature in acknowledgment of this agreement and further authorizes City Bank Trust Company to accept these as specimen signatures to be used in drawing against the above described account. Syracuse, N. Y., April 25, 1924.
“ Autograph signature Address
“ Mrs. Mary J. Brady 503. Litchfield St.
“ Mrs. Carrie B. Havens Frankfort, N. Y.”
Upon receipt of the signature cards, the bank opened the new account on April 25, 1924, and sent the pass book to Mrs. Brady, with a letter reading as follows:
“ We are inclosing herewith new pass book made out to yourself*172 and Mrs. Carrie Havens, as you requested. We are also inclosing the old pass book which you may hold for a memorandum. The changing of this account from a personal to a joint account will not in any way affect your interest.”
The account remained in this condition until August 7, 1924, when Mrs. Brady again wrote the bank as follows:
“ A short time since I made my account a joint account with Mrs. Carrie Havens. ' I should like to ask if I can have the account in a Special Interest Account, as in that way no money can be drawn without the book and I shall keep the book. I have no reason to think that the money might be withdrawn from the bank without my knowledge. I was quite ill at the time I did this and did not think about having to take the book when the account was Special Interest, and hope it can be made so yet, as one never can tell what might happen. I should like an answer at your earliest convenience, and will take it as a favor if you put it in a plain envelope.”
This letter the bank answered as follows, under date of August 8, 1924:
“ We are in receipt of your letter wherein you request that we change the joint account which we now carry under the name of Mrs. Carrie Havens and Mrs. Mary J. Brady to a Special Interest Account. Your letter is not quite clear as to whether you wish this changed over in its present state or whether you wish the Special Interest Account to be merely an individual one, in your own name. If you wish the transfer to be made leaving the account as it is at present, it will be possible for us to transfer it without your check. If, however, you wish the special interest account to be in your name alone, you will kindly give us a check for the balance of your present joint account, and we will use this as your deposit to open the new account in our Special Interest Department. Upon receipt of your answer we will forward signature cards and pass book covering the new account. The present balance on the account is $4,997.55.”
There is not in the record any direct answer to this letter, but there is a letter from Mrs. Brady to the bank, bearing date August 21, 1921, which is an evident error, reading as follows:
“ On August 14, I wrote the bank asking if my account now a joint account with Mrs. Carrie Havens, could be made .in a Special Interest account, and stated my reason for wishing it that way. I have a Special Interest Account in the Peoples Bk. of Buffalo, and think it best to have this that way if it can be done now. As I have not received an answer to my first letter, I should like an early reply to this one.”
“ In reply to your letter of recent date, we have transferred the account of Mrs. Mary J. Brady and Mrs. Carrie B. Havens to our Special Interest Dept, as per the enclosed charge slip. We are also enclosing herewith pass book on this new account, and signature cards which we would request that you kindly fill out and return to us at your earliest convenience. Trusting this will be satisfactory, we are. Very truly yours.”
The charge slip inclosed read as follows:
“ We charge your account today for balance of your checking account transferred to our Special Interest Dept, as per your recent request, four thousand nine hundred ninety seven and 55 /100 dollars. City Bank Trust Company, Syracuse, N. Y. To Mrs. Mary J. Brady & Mrs. Carrie B. Havens, 503 Litchfield St., Frankfort, N. Y.”
The signature cards were on pink paper and were in form precisely the same as those signed in April when the account was opened except that they are headed “ Mrs. Mary J. Brady and Mrs. Carrie B. Havens, Joint Account,” and the date is August 15, 1924. Those cards were signed by both Mrs. Brady and Mrs. Havens and returned to the bank, with a letter of Mrs. Brady dated August 18, 1924, reading as follows:
“ Please find enclosed the cards signed by Mrs. Havens and myself. I am not sure that the colored card is signed right, if not please send another, and mark the place to be signed. I believe that changing this account does not make any difference with the interest, should like to be sure.”
To this the bank replied:
“ In reply to your letter of Aug. 18th, kindly be advised that no interest will be lost and that the cards were all in order.”
Mrs. Brady at no time during this period or until her death called at the bank, the business all being done by the foregoing correspondence. She died in Los Angeles, Cal., where she was visiting a cousin December 26, 1924, leaving an estate of about $10,000 outside of this joint account. It is stipulated that from the time of opening the joint account in April, 1924, neither Mrs. Brady nor Mrs. Havens drew any money from said account, and that there were no deposits therein, and no credits thereto except interest; that the account consisted entirely of money furnished by Mrs. Brady and interest thereon; that Mrs. Brady had the pass book for said deposit with her in California at the time of her death, and that neither the pass book of the special interest account nor the pass book of the joint account of Mrs. Brady and Mrs. Havens
From this evidence I conclude that it was the intention of Mrs. Brady at, the time she opened the account in the two names in April, 1924, and at the time she transferred it into a special interest account in August, 1924, to create in herself and Mrs. Havens a joint tenancy in the fund, and that she expressed that intention in clear and unmistakable language; that at the time she appreciated the legal effect of her act, that Mrs. Havens would have equal interest in the fund with her during the joint lives, including the right to withdraw the same from the bank, and that upon the death of either the survivor would be the sole owner thereof. That such was her intention is further evidenced by the declaration made by her, while on her trip to California and while there to" the effect that it was unnecessary for her to make a will, that she had her affairs so fixed that whoever had the distribution of it would be unable to cheat any one out of a penny, and that Mrs. Havens would have what was in the joint account in case of her death.
Judgment is, therefore, awarded in favor of the defendant Havens, adjudging that she is the owner of the account in question, and directing the payment thereof to her by the bank.
Findings may be prepared according to this memorandum, and if not agreed upon, may be settled upon two days’ notice.