217 N.W. 150 | N.D. | 1927
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *154 Mary J. McGillivray Street died in the year 1924 at the age of seventy-five years and left surviving her second husband, to whom she had been married approximately two years; also, a sister and other relatives farther removed. Her death was the result of an automobile accident. For a number of years prior to her death she had money on deposit in the First National Bank of Dickinson, the original deposits representing the proceeds of the sale of ranch property left her by her first husband. The deposits accumulated and were evidenced by certificates issued and renewed from time to time. At the time of her death there were five such certificates amounting, without interest, to $48,500. The last renewal of these certificates had taken place in September, 1923, at which time she indicated to the cashier of the bank her desire to renew them in such a way as to make them payable to herself or H.E. Montague. They were renewed in this form and placed in her safety deposit box in the vault of the bank. After her death the certificates were found in the box and there was also found a memorandum enclosed in an unsealed envelope. On the address side of the envelope was written "For R.H. Johnson and Claud Montague." The enclosed memorandum is as follows: *157
Money in bank to be disposed of
H.E. Montague ............................. $10,000 Maria Wheat ............................... 10,000 Willetta McGlashan ........................ 3,000 Marian McGlashan .......................... 3,000 William Wheat ............................. 2,000 Charles Wheat ............................. 2,000 Fred Wheat ................................ 2,000 Watson Wheat .............................. 2,000 Florence Griffith ......................... 2,000 Mary Jane Griffith ........................ 1,500 Richard Griffith, Junior .................. 1,000 Norman Montague ........................... 3,000 Richard Montague .......................... 2,000 Hamilton Montague ......................... 2,000 Mary Currier .............................. 1,000 Donald Montague and Donald the Ranch ...... 2,000
Mary J. McGillivray Street, Oct., 1923.
Hugh McGillivray was appointed administrator of the estate of Mary J. McGillivray Street, deceased, and brought action against the bank upon the certificates of deposit. The bank answered, admitting its indebtedness but alleging the above facts with regard to the memorandum, and asking that the court determine whether or not the administrator was entitled to recover the proceeds or whether the same should be paid in accordance with the direction contained in the memorandum. It asked to be permitted to deposit the money in court for the benefit of the parties entitled.
H.E. Montague filed a complaint in intervention, pleading the execution of the certificates and alleging that he was the duly appointed, qualified and acting trustee for the benefit of himself and the other beneficiaries named in the memorandum. He prayed judgment against both the plaintiff and the defendant, requiring the delivery of the certificates to the intervener and their payment to him. From a judgment of dismissal entered against the intervener and a judgment in favor of the administrator against the bank, the intervener appeals. *158
The evidence, aside from the documents referred to above, is substantially as follows: R.H. Johnson, cashier of the defendant bank, testified that prior to the last renewal of the certificates they had been payable to Mary J. McGillivray Street; that at the time the last renewals were made, at the direction of the deceased he made them payable to the deceased or to H.E. Montague; that he was not shown the memorandum at such time and never saw it until after the death of Mrs. Street when the safety deposit box was opened; and that at the time they were drawn up she made no statement that he could remember definitely. He describes the transaction in this manner: "I might say that she came into the bank and asked for her box, and I went and got the box and she sat down at the desk just outside of the counter, and after awhile she says, `I guess I'll have my certificates renewed.' And she had them out there, and she says `I want them made in my name, payable to myself or H.E. Montague. I want them made out that way this time.'" He could remember no explanation of the change. The witness remembered that the deceased at one time came to his home and said that she was going to take care of Mr. Montague when she died — that was during the last year of her life — and that he understood it was her intention to have them payable to Mr. Montague in case of her death. The deceased did not discuss her business freely with the witness and was quite secretive about all her business matters.
The county judge testified that, after the death of the deceased and at the request of heirs and parties interested in the estate, he went to the First National Bank to examine the contents of the safety deposit box. A seal had previously been placed over the box. He opened it and found the certificates of deposit in question in an envelope in the box. He also found the memorandum. They were not included in the same envelope. He did not remember whether the memorandum was found next to the certificates of deposit.
H.E. Montague testified that the deceased had been a frequent visitor in his home and lived at his home "off and on." He lived in San Diego, California, and it had been the custom of the deceased for a number of years to spend the winter months in California. The deceased owned property in San Diego which was looked after by Montague, and she frequently consulted him regarding her business transactions. He and his family had visited her in Dickinson upon her *159 cordial invitation, accompanied by a check for $400 to pay railroad fare. While in Dickinson on this occasion she spoke to the witness about the money in the bank. To use his words, "She said if anything should happen to her I would be notified, and to come up here and to open her safety deposit box and I would find there the dissolution (disposition?) of the property or the money." He said she had never advised him concerning the state of the certificates nor how she had left them.
Mrs. DeLendrecie of Los Angeles, California, testified that she had known the deceased for fifteen or twenty years and was on intimate terms with her. The deceased often consulted her about her affairs and she thought Mrs. Street often told her about all her affairs. She had a conversation with the deceased in May, 1924, the day before the deceased left California for her home in Dickinson, at the home of the witness in Los Angeles. No one was present but Mrs. Street and the witness. The deceased told the witness that she had certificates of deposit in the bank at Dickinson and that "Claude" (the name by which H.E. Montague was known) knew about the certificates and that he was to attend to everything for her. He knew what disposition was to be made of the certificates. She remembered very distinctly that the deceased had said that he was to distribute the money to her sister, Mrs. Wheat, and to other relatives that Claude knew of, and she made a statement with regard to having left a list in the bank. "She said that the money would all be found to be distributed to her sister and Claude — Claude knew who they were — I don't recall just who she mentioned, but that Claude knew who they were; and that it was plain to me that Claude was able to make distribution; and it was left to his judgment to do it — he knew what she desired it to be. . . . I am just thinking — wait a minute — she was very particular about her sister — I recall that exactly, but I don't recall the names of anybody else that it was left with that she referred to in this matter but her sister she referred to particularly; and she said that in the bank in Dickinson, the papers were all there which Claude would receive; and Claude — I always knew him as Claude — that Claude knew all about them, and he would see to them being administered as she had written and desired that they should be."
It is clear from this evidence that the deceased did not in her lifetime *160 complete a gift of the certificates to her nephew, H.E. Montague. She at no time made any delivery of them to him, either actual or constructive. She retained at all times possession of the certificates and possession of the key to the safety deposit box, thus keeping control of them. She at no time indicated to any person the amount she intended Montague to receive, and the same is true of her sister and the other persons named in the memorandum; nor did she in any manner communicate the contents of the memorandum to any person. Had she lived she could have had the certificates renewed, payable to any person designated by her, without infringing any right of Montague or of any other person; likewise she could have changed the memorandum as often as she liked without affecting the rights of any beneficiary named in a prior published document. If Montague should take, or the administrator be charged, according to the terms of any memorandum, it would be whatever memorandum would be found after the death of the donor or settlor. These conclusions are obviously consistent with the intention of the deceased as indicated by her acts in keeping control of the certificates and her expressions with reference to disposition upon her death (not before) according to papers that would then be found in the bank.
While certain declarations and acts indicated that the deceased entertained an intention that upon her death all or certain of the property in question should pass to individuals who would not take it under the law of succession, it is apparent that there were no circumstances present which would be required in order to give effect to that intention as a gift in view of death within the statute (Comp. Laws 1913, § 5541). Neither can the disposition be upheld as a testamentary disposition, since there is no attempt to support the memorandum as a will; so, the case resolves to the single question as to whether or not a valid trust was created, of which the intervener and beneficiaries named in the memorandum are cestuis, or of which the intervener is both trustee and a cestui que trust.
The money unquestionably belonged to the deceased. She did nothing to divest herself of the use or absolute control of it, except to request that the certificates of deposit be made payable to herself or Montague. See Sherman v. New Bedford Five Cents Sav. Bank,
Since Lord Eldon's decision in Ex parte Pye, 18 Ves. Jr. 140, 34 Eng. Reprint, 271, it has become almost universal law that an owner of property may by his own voluntary declaration create a trust of that property without a change of possession and without any consideration. 1 Perry, Trusts, 6th ed. § 96. But, where there is no consideration and the expression of the declarant is equivocal, or the transaction executory, equity will not lend its aid to enable the proposed beneficiary to reap the reward. It is essential, therefore, that such a trust be perfectly created. A gift which is rendered inoperative for lack of delivery of the subject matter can not be considered as a trust and supported as such in every instance. The intention to create a trust must rest upon substantial proof tending affirmatively to establish it; it is not to be inferred from the mere failure, though for somewhat technical reasons, of an intended benefaction. Young v. Young,
Furthermore, the memorandum, which is the strongest bit of evidence *162 in support of the intervener's claim, contains as specific a declaration to the effect that Donald shall have the ranch property as that he or any other beneficiary shall have a specific amount of money which had been deposited in the bank; and, if the memorandum evidences a trust of the bank deposit, it is difficult to escape the conclusion that it likewise evidences a trust of the ranch property. The declaration is in writing and is subscribed by the trustee and hence, if otherwise sufficient, satisfies the statute of frauds. Comp. Laws of 1913, § 5364. Section 5364, Compiled Laws of 1913 contains an obvious misprint; the statute is correctly printed in § 4821, Revised Codes of 1905. So far as our researches have extended, no authorities have been found that would support a trust of real property on so slender a declaration by the owner as exists in this case — a mere statement in writing that a certain individual is to have the property, found after the death of the owner among the valuable papers of the deceased and explained only by parol evidence indicative of a testamentary intention. There can be no sound reason for distinguishing between a trust of personal property and a trust of real property in the matter of the intention to create it. They are equally dependent upon the intention to create. All of the expressions and directions bearing upon the disposition of the property in the instant case are appropriate to a testamentary disposition, rather than to a trust, and when all are considered together it seems to us that the conclusion is inescapable, that the deceased really intended the disposition as a testamentary one and doubtless believed that she had done all that was necessary to give effect to her testamentary intention. Whether or not she had made a valid will is a matter that we can not properly decide in this case, and we therefore express no opinion upon it. The failure of the document to operate as a will, if it does so fail, would not add materially to its force as evidence of a trust. 1 Perry, Trusts, 6th ed. § 97. We are of the opinion that there is lacking here proof of an intention to create a trust.
But it is argued that by having the certificates made payable to herself or Montague and by executing the memorandum, she clearly indicated a purpose to hold the certificates for the benefit of the persons named and that, since the law is more concerned with the substance or the legal effect of her act than with any words she might have employed or omitted, the fact that she did not declare herself a trustee is not *163
important; nor, it is urged, is it particularly significant that she retained the power of revocation, as the validity of a trust may not be affected by a reservation of the power of revocation. Kelly v. Parker,
It is indeed difficult to see wherein the deceased during her lifetime had taken any steps that in the slightest degree qualified her dominion, control, use or beneficial enjoyment of the property in question. Clearly, she was just as free to enjoy it as she would have been had she made a will expressing the same intention as that embodied in the memorandum. But, construing the memorandum as a deed of settlement, "It," to use the language of the Supreme Court of Massachusetts in the case of McEvoy v. Boston Five Cents Sav. Bank, 201 Mass. at page 54, 87 N.E. 465, "left her (the settlor) the sole beneficial owner of it, with an absolute power of disposition as long as she lived. As against her, therefore, the only practical effect of the instrument during her lifetime was to give the trustee (in the case at bar, herself) a right to collect and hold the property until she should ask for it. Her rights as beneficial owner during her life were not limited in any material way. She could revoke the trust at any time, or she could demand and receive from the trustee (herself, in the instant case) all the money, at any time, under the trust, and then do with it as she chose." In that case it was held that an attempted disposition of specific property by a transfer to a trustee upon trust to pay to the settlor as demanded and to make certain payments upon the death of the settlor and thereafter to pay stipulated amounts to certain beneficiaries with a reservation of the right to revoke, was testamentary and could not be given effect except as a will.
The case was distinguished from Kelley v. Snow, 185, Mass. 288, 70 N.E. 89, where the settlor retained a beneficial use extending to the *164
income during her life and retained a power of appointment under which the beneficiaries of the trust could be changed by giving notice in writing to the trustee, the court saying (page 54): "While she had a power by the writing to change the disposition of what remained after her death, she could not diminish the property which necessarily would pass to others under the trust." See, also, Stone v. Hackett, supra. In the case at bar the legal title never passed out of the settlor as in the Massachusetts cases, nor did she in any manner restrict her power of disposition by will or otherwise. If it be conceded that any trust of property which would be valid if created by will can be created by the owner in his lifetime (see Gilman v. McArdle,
In Brown v. Crafts,
The appellants cite, as authorities sustaining their contention that a trust was in fact created, a number of cases, principally from California, in which settlements of bank deposits have been upheld in favor *165 of donees where the donor had indicated a desire to have the deposit payable to himself or the donee and taken steps to enable the donee to obtain the money from the bank, either during their joint lives or as a survivor. These cases, in our opinion, approach more nearly to authority for the position of the appellant than any others presented upon the brief, and we feel that we would not be justified in disposing of the case without a careful consideration of these decisions.
In many of the cases involving bank deposits, such as Sayre v. Weil,
In other cases, however, where the deposit is made to the credit of two or more persons jointly, payable to either or to the survivor, their *166 names being linked either conjunctively or disjunctively, and where the owner of the fund so deposited has clearly signified a willingness to permit the other to withdraw the whole or any part of the moneys, either before or after the donor's death, the facts are more closely analogous to the facts in the case at bar, and the principles controlling the decisions merit attention. Owing to the number of such cases, it is, of course, impossible within an opinion of reasonable length to abstract the holdings in all of them. We therefore select such of them as may have been specially relied upon, or as are typical of the class, for examination in this connection.
In Booth v. Oakland Bank of Sav.
In the case of Carr v. Carr,
In Drinkhouse v. German Sav. L. Soc.
In McCarthy v. Holland,
In Chippendale v. North Adams Sav. Bank,
In Hoboken Bank for Sav. v. Schwoon,
In Harris Bkg. Co. v. Miller, 190 Mo. 640, 1 L.R.A.(N.S.) 790, 89 S.W. 629, where a depositor indorsed to another a certificate of deposit, notifying both the bank and the indorsee that he held the certificate for the indorsee but retained the right to use the income during his life, it was held that a valid trust was created.
In Deal v. Merchants M. Sav. Bank (Parrish v. Merchants M. Sav. Bank)
See also Cleveland Trust Co. v. Scobie,
In a supplementary brief counsel cite and rely specially upon Coburn v. Shilling,
We are not concerned here with any question as to whether or not a bank paying the survivor of one of two or more joint tenants according to the terms of a contract may be liable over to the administrator of the original owner. Battles v. Millbury Sav. Bank,
In the cases above, in which the right of the survivor was upheld on the theory that a trust was created by the depositor, it will be seen that in practically all of them a power, at least (as distinguished from a right), was recognized in the beneficiary during the life of the depositor to exercise control over the deposit or to withdraw it, or there was a contract relation with the bank in which definite rights of a beneficiary were recognized; whereas, in the instant case the control of the deposit was at all times solely with the deceased and was wholly dependent upon the possession of the certificate. There is no evidence of any intention to surrender to or share this possession with Montague or any other beneficiary. Montague's beneficial interest was not to be that of a joint tenant with the deceased. The amount of his ultimate interest was subject to the same uncertainty as that of any other contemplated beneficiary and even the persons to be favorably affected were likewise unknown and subject to inclusion or exclusion at the will of the depositor. The deceased admitted no one on an equal basis with herself. So, *171 even should the authority of those cases be recognized, the facts in the present case are sufficiently at variance to warrant a distinction.
The strongest analogy, in our opinion, is found in those cases in which the bank is said to become the trustee to carry out the trust according to the terms fixed by the deceased. But it is difficult to understand how the debtor becomes a trustee. Does it cease to be a debtor? Do the other incidents of the trust relation immediately attach? As we view the matter there is little authority for such an easy shifting of a debtor and creditor relation to that of trustee and cestui que trust in order to effect a given legal result — a result that may be reached by perfectly legal means through compliance with safeguards dictated by experience in the interest of the safe and orderly distribution of property. Sullivan v. Sullivan,
We have set forth in this opinion the cases that seem to us to afford the strongest support to the appellant, and we have indicated some of the reasons why we think the principles of those cases are not applicaable here. It is not to be assumed that there are not numerous authorities more nearly in point and holding against the contentions of the appellant. Among the many well considered cases supporting our conclusions in the matter are the following:
Main's Appeal,
In Telford v. Patton,
In Bath Sav. Inst. v. Fogg,
Where money is deposited in the names of two persons, payable to either or survivor, and where the book remains in the possession of the depositor until after his death, the other person having no knowledge of the deposit, the money remains the property of the depositor. Noyes v. Institution for Sav.
In Taylor v. Henry Bruscup,
". . . For the purpose of establishing such trust (a trust of the declarant's own property), however, the evidence must be clear and unmistakable both of the intent and the execution of that intent. . . . There is no reliable evidence of declarations of the deceased, either in writing or by parol, that tends to prove that he designed the money on deposit exclusively for his sister, or that he intended to give her any real interest in the money by inserting her name in the bank-book, apart from the entry itself. . . . His declarations, conduct, and dealing with the subject-matter, all go irresistibly to show that he never did and never intended to part with or surrender his absolute control and dominion over the fund, during life. . . ."
See also Murray v. Cannon,
For similar authorities, see Howard v. Dingley,
*174
132 A. 761; Morristown Trust Co. v. Capstick,
In this opinion we have not attached any significance to the fact that the certificates of deposit were payable in the disjunctive to the depositor or Montague. This is not to be considered as an implied holding that such is an appropriate form for creating a joint tenancy. Morristown Trust Co. v. Capstick,
It follows that the judgment appealed from is right, and it is affirmed.
NUESSLE, CHRISTIANSON, BURR, and BURKE, JJ., concur.