Cashman v. Mason

• Decision Date: 07 April 1947
• Docket Number: Civ. No. 1942.
• Citation: 72 F. Supp. 487
• Parties: CASHMAN v. MASON et al.
• Court: U.S. District Court — District of Minnesota

72 F. Supp. 487

CASHMAN v. MASON et al.

Civ. No. 1942.

District Court, D. Minnesota, Fourth Division.

April 7, 1947.

G. W. Horsley, of Springfield, Ill., and Rudolph E. Low, of St. Paul, Minn., for plaintiff.

C. E. Warner, of Minneapolis, Minn., for defendant Ellsworth Mason.

Grant W. Anderson, of Minneapolis, Minn., for defendant Northwestern National Bank & Trust Co. of Minneapolis.

NORDBYE, District Judge.

The plaintiff, Edith Cashman, was formerly Edith Cole, and is a niece of Mrs. A. W. Ross, who is now deceased. In June, 1941, plaintiff was living in Illinois, where she was employed as a stenographer. She came to Minneapolis to spend her vacation and while here visited her aunt, Mrs. Ross. There is evidence that at about that time Mrs. Ross told a public accountant, a Mr. Foley, who looked after her income tax matters, that she was going to have her bank accounts placed in the joint names of herself and the plaintiff in that she did not have any heirs and wanted to make her niece her "heir apparent". At that time Mrs. Ross had on deposit $1,048.13 in her savings and her checking account reflected a balance of $11,654.67. On July 12, 1941, Mrs. Ross and the plaintiff went to the defendant bank to open accounts in their joint names. The savings account was transferred from the name of Mrs. A. W. Ross to a joint account in the name of "Mrs. A. W. Ross or Edith M. Cole." The signature card signed by both parties contained the following agreement: "The funds deposited in this account are the joint property of the undersigned, and the bank may discharge its obligation for the same by payment to or upon the written order of either, or to the survivor of the undersigned without reference to the ownership of the funds deposited."

The checking account was likewise transferred from the name of Mrs. A. W. Ross to a joint account in the name of "Mrs. A. W. Ross or Edith M. Cole." The signature card contained in part the following statement: "All funds now or hereafter deposited in said account by either or any of the depositors shall be the property of the depositors jointly with the right of survivorship. Each depositor shall have complete and absolute authority over said account during the joint lives of the depositors and may withdraw all or any part of such funds on checks or other withdrawal orders signed by either or any of the depositors and by the survivor or survivors in case of death of any thereof."

After the accounts were opened as indicated, plaintiff went back to Illinois and continued in her position as a stenographer. From time to time thereafter, Mrs. Ross made substantial deposits in both accounts and substantial withdrawals from the checking account. In January of 1942, or thereabouts, plaintiff came to Minneapolis and lived at the Ross home. Later that year she was employed by a concern in Minneapolis of which Mrs. Ross was the controlling stockholder. Plaintiff signed a few checks on the joint checking account, but, so far as the evidence indicates, these checks were payment of bills incurred by Mrs. Ross and were all signed "Mrs. A. W. Ross by Edith M. Cole." Apparently no withdrawals were made on the savings account during the time the account was in the name of Mrs. Ross and the plaintiff. Furthermore, it appears that at all times Mrs. Ross had possession of the passbooks for both accounts.

It is to be gathered from the evidence that some friction arose between Mrs. Ross and the plaintiff, and in January, 1943, the plaintiff left the home of Mrs. Ross and never returned to live with her again. In April, 1943, plaintiff resigned her position with the business concern which Mrs. Ross controlled and returned to her home in Illinois. Thereafter, Mrs. Ross and the plaintiff may have met on one or two occasions, but their relationship was most casual.

On September 30, 1943, Mrs. Ross went to the defendant bank and made arrangements to change the title of the joint checking account which at that time was in the name of herself and this plaintiff. Although the original change order which Mrs. Ross signed and delivered to the bank has been destroyed, the evidence indicates that it was in the following form:

"Order to Change Title of Account

"N. W. 555

"You are instructed to change the title of the account now carried on your books as: Mrs. A. W. Ross or Edith M. Cole to Mrs. A. W. Ross or Ellsworth Mason.

"All outstanding checks drawn as against the account as formerly carried are to be charged against the present account."

Ellsworth Mason is a brother of Mrs. A. W. Ross, and at the time the accounts were changed he was residing in Peoria, Illinois. In accordance with the order signed by Mrs. Ross, the checking account was changed by the bank as requested and was carried thereafter as changed until Mrs. Ross' death on May 9, 1945. At the same time that the checking account was changed, Mrs. Ross executed a savings withdrawal slip withdrawing the entire balance in the joint savings account of herself and Edith M. Cole in the sum of $10,958.06 and redeposited the same to a new savings account which she opened in the name of "Mrs. A. W. Ross or Ellsworth Mason."

On September 30, 1943, the joint checking account reflected a balance of $6,339.95. Withdrawals were made thereafter on this account and one deposit of $3,000 was made by Mrs. Ross before her death. This $3,000 was deposited on February 10, 1945, and represents a withdrawal from the joint savings account of Mrs. Ross and Ellsworth Mason, and was deposited in the checking account so as to enable Mrs. Ross to have sufficient funds to draw a check in the sum of $3,880 which was apparently due the concern in which she was a majority stockholder by reason of the fact that she, Mrs. Ross, had been paid an excess salary and the Government required the restoration of this money for income tax purposes. Consequently, of the funds on deposit when the checking account was carried in the name of Mrs. Ross and this plaintiff, there remained in this account only the sum of $822.41 at the time of Mrs. Ross' death. As stated, there was a balance of $10,958.06 in the savings account at the time the new account was opened in the names of Mrs. Ross and Mr. Mason, and at the time of Mrs. Ross' death the balance in this account had been increased by deposits made by Mrs. Ross to the sum of $20,819.71. The balances in the checking and savings accounts were withdrawn by Mr. Mason shortly after Mrs. Ross' death on May 9, 1945.

Plaintiff brings this action to recover the sum of $6,339.95 and the sum of $10,958.06, the balances in the joint checking and savings accounts respectively on September 30, 1943, on the theory that, when these accounts were opened, a gift inter vivos was made from Mrs. Ross as donor to the plaintiff as donee, and that at that time a present interest was vested in Edith M. Cole and such interest could not be revoked by any subsequent act on the part of Mrs. Ross. Apparently the bank's liability is predicated on the theory that, with knowledge of the two joint accounts as reflected in its records, it wrongfully permitted the withdrawal of these funds by Mrs. Ross in that it permitted her to have both accounts transferred from the joint names of herself and the plaintiff to herself and Ellsworth Mason. The Minnesota statute which should be considered in passing upon the questions submitted provides, Section 48.30, Minnesota Statutes 1945 and M.S.A.: "* * * When any deposit shall be made by or in the names of two or more persons upon joint and several account, the same, or any part thereof, and the dividends or interest thereon, may be paid to either of these persons or to a survivor of them, or to a personal representative of the survivor."

It is suggested, but not decided, that this statute was passed primarily for the protection of banks in making payments on joint accounts. McLeod v. Hennepin County Savings Bank, 145 Minn. 299, 176 N.W. 987. In view of the fact that the joint account was terminated before Mrs. Ross' death, the statute probably has no other significance in this controversy. See 12 Minn.Law Review, pp. 285, 286.

A reading of the Minnesota cases would indicate that joint deposits such as we have here between plaintiff and Mrs. Ross may constitute a gift and are governed by the rules applicable to gifts. McLeod v. Hennepin County Savings Bank, supra. But obviously each case must be decided on its own facts, and the question is therefore presented whether Mrs. Ross made these deposits with the intention of making a gift, or whether she made this arrangement merely for her own convenience or to serve some purpose of her own. Dyste v. Farmers & Mechanics Savings Bank, 179 Minn. 430, 434, 229 N.W. 865. In order to have a gift inter vivos, the gift must be in præsenti. If it was a gift to take effect on the death of the donor, with the control and recall remaining with the donor, there is no executed gift inter vivos. McLeod v. Hennepin County Savings Bank, supra. Moreover, if the donor merely intended to arrange a form of testamentary disposition, the plan would not only be ineffective as a testament, but could be withdrawn at any time at the behest of the donor.

Mrs. Ross was an elderly widow with no children. She was in ill health and subject to periodical sick spells. In the early part of 1942 she suffered a stroke and was incapacitated for some time. It is fair to assume from the evidence that she wanted some one to live with her and to aid her in looking after her affairs, and, as Mr. Foley testified in summarizing the conversation between him and Mrs. Ross, she, Mrs. Ross, was going to take "Edith Cole in from there on, and Edith was going to be her, I would say, heir apparent." In pursuance of that arrangement, Edith Cole did come to live with Mrs. Ross and arrangements were made so that she apparently did part of the housework but was not required to pay anything for board...