121 Misc. 437 | N.Y. Sup. Ct. | 1923
The money involved in this controversy belonged to plaintiff’s .intestate, Mary McDonald, and was the accumulated
•Two days before her death there was prepared and delivered to the defendant Sargent for her a check upon the-defendant Seneca Falls Savings Bank of which the following is a copy:
“ No. 4278 Seneca Falls, N. Y. Nov. 15, 1919
“ The Seneca Falls Savings Bank ¡
“ Pay , to the
“ Order of Elizabeth Sargent $2055-01 /100 Two thousand fifty-five and 01 /100-Dollars and all accumulations— account 4287 and make joint account of same witness to mark. her ¡
“ W. S. MacDonald. Mary X McDonald.”
mark
The savings bank account, with its accumulations, then amounted to $2,096.11, and upon presentation of the check by Mrs. Sargent was closed and that amount forthwith redeposited to the joint credit of herself and Miss McDonald; a new passbook therefor was issued in the name of both and delivered to Mrs. Sargent, upon which was stamped in purple ink under the names the words “ Either or survivor may draw.” ' ¡
After the death of Miss McDonald the joint account was in turn closed and its balance deposited to Mrs. Sargent’s individual credit. There now remains (including some earned interest) the sum of $1,539.08, which amount has been tendered in court for the bank and, by arrangement between counsel, is left to await the outcome, the action by stipulation being dismissed, without costs, as against the bank.
It should be said in passing that the evidence shows a considerabl e amount of the money withdrawn from these accounts by Mrs. Sargent was expended by her for the benefit of Miss McDonald including her funeral and other mortuary expenses.
The action is to recover the moneys for Miss McDonald’s estate and is founded on the theory that no title thereto ever vested in the defendant Sargent; that at the time the change in the account was made Miss McDonald was incompetent to manage her affairs or do any business whatsoever and that the transfers were procured by undue influence and fraud practiced upon her.
A number of instances are related as indicating that during those last months she was a victim of hallucinations and delusions, but however this may be, they were not of such a nature as rendered her incapable of understanding the condition of her property or of apprehending her true relations to those who might be expected to share her estate. There is no evidence of any fixed, continuing or universal mental incapacity, and if her last will and testament
Concerning the allegations of fraud and undue influence the proof is entirely silent. There is nothing to indicate that the subject of the change of the bank account or of any other gift to Mrs. Sargent had ever been mentioned between them, or by any person in her behalf. So far as appears her first knowledge of Miss McDonald's intention in that regard came when the check was handed to her. That she knew Miss McDonald wished to consult with a lawyer may be, perhaps, inferred from the fact that her husband told the attorney that Miss McDonald wished to see him, but no other or further inference can be drawn from that fact. Neither fraud nor undue influence is to be presumed and in the absence of trust relations or other special surroundings the burden of showing same is upon the party who alleges it. Matter of Smith, 95 N. Y. 516-522; Thompson v. Peterson, 152 App. Div. 667-672. In the absence of any proof it must be held that neither allegation is sustained.
If the change of this bank account served to vest the ownership of the money which it represented in Miss McDonald and the defendant Sargent jointly, the action must be dismissed and it, therefore, becomes necessary to consider the legal effect of that transaction. It will be observed that the check directed the bank to pay the moneys to the order of Mrs. Sargent “ and make joint account of same.”
Before the adoption of the amendments to the Banking Law (Laws of 1907, chap. 247; Laws of 1914, chap. 369) a deposit to the joint account of persons other than husband and wife, whether the provisions that the survivor might draw was specific or otherwise, did not of itself sufficiently establish the intent of the person making it to create a trust in behalf of the other or to give the other joint interest in or ownership of the deposit. In the absence of other satisfactory evidence of such intent deposits of that kind were deemed to have been made only for convenience. Matter of Bolin, 136 N. Y. 177; Kelly v. Beers, 194 id. 49; Matter of Reynolds, 163 N. Y. Supp. 803.
The amendment of 1907 is now reproduced in section 249 of the Banking Law and, so far as germane, is as follows:
“ 3. 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*441 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, and the same together with all dividends thereon shall be held for the exclusive use of such persons 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 such savings bank for all payments made on account of such deposit prior to the receipt by such savings bank of notice in writing not to pay such deposit in accordance with the terms thereof.”
It would seem, however, that the legislative intent of the act was defeated by a judicial construction which held the amendment, while protecting the bank, as between the persons in whose name the deposit stood, only operated as a presumption in favor of ownership of the joint fund by the survivor which might be rebutted by evidence that title as joint owners was not intended to be established. Clary v. Fitzgerald, 155 App. Div. 659. Accordingly in the following year the section was again amended (Laws of 1914, chap. 369, § 249) by the addition of the following words: “ 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 survivor depositor is a party, of the intention of both depositors to vest title to such deposit and the additions thereto in such survivor.” Read literally these amendments would seem to say that one in possession of the money of another might, without the knowledge or consent of the owner, deposit it in the-manner described and thereby become a joint owner with its accompanying right of sole title by survivor-ship. The law, however, does not create absurdities nor is it intended to afford means whereby one may be deprived of his property through trickery or fraud. There is always to be read into these statutes that the deposit is made by or with the knowledge and consent of the true owner of the money.
If the meaning of the provision be otherwise, as was said by Mr. Justice Kellogg, “ then arbitrarily, for no public purpose, without compensation and by no due process of law, an owner is made to lose his property without his consent and without his knowledge. If so construed it is not valid.” Matter of Buchanan, 184 App. Div. 237. It must be borne in mind that the moneys in question belonged to Miss McDonald and the deposit in their joint names was made by Mrs. Sargent who theretofore had no ownership or interest in them. Under the cases, as well as what I
Writing upon this subject in Heiner v. Greenwich Sav. Bank, 118 Misc. Rep. 326, Mr. Justice Lazansky summed up the situation by saying: “ The legislature, in my opinion, intended that the form was only conclusive evidence as to accounts opened with the intention of the owner or owners of the money. The provision should not be deemed to include accounts otherwise opened.” In other words, before such conclusive evidence of ownership can be said to exist the deposit must have been made with the intention of the owner of the money in the form prescribed by the statute.
As I understand the facts in the instant case, the account was not opened in the form prescribed by the statute but simply as a joint account in the names of Mrs. Sargent and that the statutory words “ Either or survivor may draw ” appear only upon the passbook. Assuming, however, that this is a technical compliance with the requirement of the Banking Law, there will still remain the question, was it so intended by Miss McDonald? Her intention, as well as her knowledge and consent, must be derived from the check which she gave for the purpose of the transfer. The case is bare of other evidential facts upon the subject. The check is without ambiguity. She directed, not that her moneys should be deposited in form to be paid to either herself or Mrs. Sargent or the survivor of them, but only that they should be deposited to the joint account, as seems to have been done, of herself and Mrs. Sargent. The limitation of her direction could not be extended to either Mrs. Sargent or the bank. Presumptively she knew what the law was and limited the proposed deposit in the light of that knowledge. In the present state of the law, deposits may be made
Judgment is directed for the plaintiff, with costs to be paid out of the fund to both parties in accordance with their stipulation. All moneys therefrom expended by the defendant for the benefit of Miss McDonald or her estate to be allowed as credits.
Findings may be submitted.
Judgment accordingly.