Boling v. Gibson, 78-146

• Decision Date: 09 July 1979
• Docket Number: No. 78-146,78-146
• Citation: 584 S.W.2d 14,266 Ark. 310
• Parties: Larry BOLING, Special Administrator, Appellant, v. Merna W. GIBSON and Cecil L. Gibson, Appellees.
• Court: Arkansas Supreme Court

Page 14

584 S.W.2d 14

266 Ark. 310

Larry BOLING, Special Administrator, Appellant, v. Merna W. GIBSON and Cecil L. Gibson, Appellees.

No. 78-146.

Supreme Court of Arkansas, In Banc.

July 9, 1979.

Bradley & Coleman, Jonesboro, for appellant.

Moore & Gibson, P.A., Osceola, for appellees.

FOGLEMAN, Justice.

This appeal involves the title to eight certificates of deposit issued by various banks to Herman Gibson, Merna W. Gibson and Cecil L. Gibson. Merna W. Gibson (known as Wayne) and Cecil L. Gibson were the two sons of Herman, who died testate on October 12, 1976, bequeathing and devising all his property to these two sons, his only surviving children. Nora Gibson, Herman's widow, elected to take against the will, which had nominated these two sons (by a previous marriage) as joint executors. They were appointed as such by the probate court. Mrs. Gibson filed an objection to their accounting because it failed to account for certain certificates of deposit, which she alleged were property of the estate. She then filed an action in the chancery court to determine the ownership of the certificates, which the two sons claimed as a gift from their father. Larry Boling was appointed special administrator upon petition of Mrs. Gibson to prosecute actions on behalf of Herman Gibson's estate for the determination of the ownership of the certificates. The proceedings were consolidated for hearing. The chancellor and probate judge held that the certificates of deposit were the subject of a gift to Merna W. and Cecil L. Gibson, by their father. Appellant brings this appeal as to bank certificates of deposit of a total face value of $108,038.14.

Appellant states the following point for reversal:

THE CHANCELLOR AND PROBATE JUDGE ERRED IN HOLDING THAT THE NON-NEGOTIABLE BANK CERTIFICATES OF DEPOSIT WERE A GIFT FROM HERMAN GIBSON IN HIS LIFETIME TO HIS SONS MERNA W. GIBSON AND CECIL L. GIBSON.

A. THE BANK CERTIFICATES OF DEPOSIT WERE NOT SUBJECT MATTER TO CONSTITUTE A GIFT BY DELIVERY.

B. THERE WAS NO CLEAR INTENT TO MAKE AN IMMEDIATE PRESENT AND FINAL GIFT BEYOND RECALL, UNCONDITIONALLY RELEASING ALL FUTURE DOMINION AND CONTROL OVER THE CERTIFICATES OF DEPOSIT.

C. IF THE CERTIFICATES OF DEPOSIT WERE PROPER SUBJECT MATTER AND IF ALL THE ELEMENTS OF A VALID GIFT WERE PRESENT IN THE DELIVERY, IT PERPETRATED A FRAUD ON THE WIDOW.

A

Appellant contends that because these certificates of deposit were stamped "non-negotiable," and were not property but only representations of property or money held by banking institutions, they could not be the subject of a gift by the father who purchased them with his own money and either caused them to be made payable to him and these two sons or caused the certificates to be changed to include the two sons as payees, without ever having "designated in writing to the banking institution that the account or Certificate of Deposit is to be held in 'joint tenancy' " as provided in Ark.Stat.Ann. § 67-552(a) (Repl.1966). He somehow concludes that the issuing bank could not have legally paid the money to them on presentation of the instrument. He reads Porterfield v. Porterfield, 253 Ark. 1073, 491 S.W.2d 48, as holding that a delivery of certificates of deposit issued in the names of two or more persons without a designation in writing will not satisfy the elements of an immediate, present and final gift. Such a reading is not justified. The decision in Porterfield was that there was no delivery of the certificate in question and no clear and convincing evidence that there had been a gift. We did hold that all the elements of a completed inter vivos gift must be shown by clear and convincing evidence. We pointed out that there must be an actual delivery of the subject matter of the gift to the donee with a clear intent to make an immediate, unconditional and final gift beyond recall, accompanied by an unconditional release by the donor of all future dominion and control over the property so delivered.

The "non-negotiable" nature of these certificates meant only that title would not pass by endorsement and delivery by the payees, or any of them to, one not a party to the instrument. The alternate payees were the father and his two sons, named as "Herman Gibson or M. Wayne or Cecil Gibson," or variations of the names and of the order in which they were named. All were payable to any of the payees or the survivor of either. The sums represented by these certificates were payable by the issuing bank to any one of the three named payees. Ark.Stat.Ann. § 67-521 (Repl.1976). Cook v. Bevill, 246 Ark. 805, 440 S.W.2d 570. Ark.Stat.Ann. § 67-552(a) has little, if any, significance, because appellees are not claiming by right of survivorship.

The certificates of deposit were subject of gift by delivery with intent to make a gift. We have said that a promissory note, or any chose in action or any other evidence of debt, may be the subject of a gift inter vivos. Pyland v. Gist, 177 Ark. 860, 7 S.W.2d 985. A certificate of deposit falls into that category. It was classified in that respect in Basket v. Hassell, 107 U.S. 602, 2 S.Ct. 415, 27 L.Ed. 500 (1883) in these words:

* * * A certificate of deposit is a subsisting chose in action and represents the fund it describes, as in cases of notes, bonds, and other securities, so that a delivery of it, as a gift, constitutes an equitable assignment of the money for which it calls.

These instruments have been so considered universally. Commonwealth v. Crompton, 137 Pa. 138, 20 A. 417 (1890); Dietzen v. American Trust & Banking Co., 175 Tenn. 49, 131 S.W.2d 69 (1939); Philpot v. Temple Banking Co., 3 Ga.App. 742, 60 S.E. 480 (1908); Annot., 40 A.L.R. 508, 509.

B

This contention presents us with a very difficult and delicate problem. Appellees sought to prove that a completed gift of the certificates of deposit was made to them by their father in his lifetime. They had the burden of showing, by clear and convincing evidence, that these certificates were delivered to them by their father with the clear intent to make an immediate, present, final gift beyond recall, releasing all future dominion and control. It must have been the intention of the donor that title pass immediately, and a delivery for safekeeping or for any purpose, either express or implied, other than a specific intent to part with all right, title and interest in, and all dominion and control over the certificates, would not constitute a gift. Lowe v. Hart, 93 Ark. 548, 125 S.W. 1030.

The certificates were issued by various banks in Jonesboro. None of the banks at the time required the depositor to designate the payees or depositers in writing or to execute any signature card or any written document in connection with the issuance to the certificates. Some of them had originally been issued to Herman Gibson only. Later, he caused the names of his two sons to be added as payees by oral instructions. Others were originally issued to these three payees. One of them had been issued as early as June, 1973. Appellees contend that the gift to them was made on July 28, 1976.

Mr. and Mrs. Herman Gibson had a safe deposit box at First Bank & Trust Company (then First National Bank) in Jonesboro. The records at that bank show that it was entered by Herman Gibson on July 28, 1976, at 9:05 a. m. Wayne Gibson, who lived in Springfield, Missouri, testified that he visited his father for two or three days in July, 1976, and that when the two ate breakfast on the morning of July 28, his father said, "We have got some business to take care of; we are going to town." Wayne said that, on the way, his father told him that he intended to give all the certificates of deposit he had bought, and about which he had talked to Wayne over the years, to Wayne and his brother, saying he wanted to take them out of his lock box and give them to Wayne. According to Wayne, they stopped at the First National Bank and his father went inside and returned in a few minutes, handed Wayne an envelope containing the certificates and said, "These belong to you boys and I want you to have them," and then asked Wayne what he was going to do with them. Wayne said that they crossed the street and walked toward the Citizens Bank, but, before they got to the bank, his father met someone he knew and stopped to talk. Wayne proceeded into the bank and engaged a safety deposit box through Ms. Christabel Elliott, a bank employee, who gave him two keys to the box, and accompanied him to open the box, where he used one of the keys and she used the bank's key to open the box, into which Wayne placed the certificates. Wayne said that, as he left, he met his father, who was standing inside, near the front of the bank. Cecil Gibson testified that in June, 1976, his father had spoken of the certificates of deposit and had said to him, "I am going to give them to one of you boys, the first one of you that is up here on a working day."

This was all the testimony about the making of the gift, but a sharp issue has arisen about the intent of Herman Gibson at the time of the transaction and his relinquishment of dominion and control, particularly in view of the fact that he received and retained all interest paid on the certificates between the time they were placed in the lock box at Citizens Bank and his death.

Christabel Elliott, who was a vault attendant in charge of safety deposit boxes at Citizens Bank, had testified on behalf of appellant. She had been an employee of that bank for 13 years. She took Wayne Gibson's application for a lock box on July 28, 1976. She produced the record card for the box. She stated that, when Wayne Gibson came into the bank to rent the lock box, he told her his father, whom he identified as H. Gibson, would come in and sign the card, saying, "We will add his name to the card later, he does not have a key right now, I have both keys." She said that Wayne said that his father signed his name "H. Gibson." She said...