Clark v. Young

• Decision Date: 24 November 1944
• Docket Number: 8 Div. 299.
• Parties: CLARK v. YOUNG et al.
• Court: Alabama Supreme Court

21 So.2d 331

246 Ala. 529

CLARK v. YOUNG et al.

8 Div. 299.

Supreme Court of Alabama

November 24, 1944

Rehearing Denied March 8, 1945.

Further Rehearing Denied March 29, 1945.

Ben L. Britnell, of Decatur, for appellant.

F. W. Davies and Spain, Davies, Gillon, Grooms & Young, all of Birmingham, for appellee Young.

Norman W. Harris, of Decatur, for appellee State Nat. Bank.

The decree is in pertinent part as follows 'The facts of this case are not in dispute, and the Court finds the following facts: On June 23, 1942, Cora E. Hunter deposited in the Falkville branch of the State National Bank the sum of $7,500.00 and the agreement between the said Cora E. Hunter and the said bank with reference to the deposit of said money was evidenced by a certificate of deposit dated June 23, 1942, being numbered No. 2106, issued by the State National Bank to Cora E. Hunter and payable twelve months after date to 'Mrs. Cora E. Hunter or Mrs. Annie Lou Young, or survivor' on return of the certificate properly endorsed. Said certificate provided that it would bear interest for one year at the rate of two per centum (2%) per annum, interest then to cease and there is now due under said certificate the sum of $7,650.00, including principal and interest. The money deposited in said bank in consideration of which said certificate of deposit was issued was the sole property of Cora E. Hunter, and the defendant Annie Lou Young owned no part of the same. Said certificate of deposit was retained by V. O. Clark in his capacity as agent for Cora E Hunter, and the said V. O. Clark held said certificate of deposit in his capacity as such agent for Mrs. Hunter, and not as agent for Mrs. Young. In making said deposit it was the intention of Cora E. Hunter that Annie Lou Young should at the death of Cora E. Hunter become the owner of the indebtedness and of the sum of money evidenced and represented by said certificate of deposit, but it was also the intention of the said Cora E. Hunter to reserve possession and full control and dominion over the certificate of deposit and over the money in consideration of which it was issued during her life time and it was her intention that Mrs. Young should have no interest in or right to the same until the death of Cora E. Hunter. Cora E. Hunter died on January 31, 1943, before the maturity of the certificate of deposit, and V. O. Clark was appointed administrator of her estate, and through his counsel advised the State National Bank of Decatur that he had possession of the aforesaid certificate of deposit, and that he claimed the proceeds of the same in his capacity as administrator of the estate of Cora E. Hunter, deceased. Annie Lou Young also made known that she claimed to own and to be entitled to payment to her of the amount due under said certificate of deposit. State National Bank, in view of said conflicting claims, declined to pay said certificate of deposit upon its maturity to either of the claimants, and through its counsel advised the parties that it intended to file an interpleader suit against the two claimants in order to determine which of them was entitled to said sum of money, and in order to protect itself from double liability. Thereupon the complainant filed suit under the statute to determine which of the claimants was entitled to the money in controversy.'

BROWN Justice.

Bill in the nature of bill of interpleader filed by appellant Clark as the administrator of the estate of Cora E. Hunter, against Annie Lou Young and the State National Bank, a corporation, seeking to settle the adverse claims of the complainant and Annie Lou Young to a certificate of deposit issued by said Bank, representing an indebtedness of $7,650 including interest. Said certificate of deposit is in the following words and figures:

Not Subject to Check

'Certificate of Deposit

'State National Bank

'Due June 23, 1943

No. 2106

'Falkville, Ala., June 23, 1942

This Certifies that

Mrs Cora E. Hunter has deposited in this Bank $7,500.00 Seven Thousand Five Hundred and no/100 Dollars Payable to Mrs. Cora E.Hunter or Mrs. Annie Lou Young or Survivor 12 months after date, on the return of this Certificate properly endorsed, with interest at the rate of 2 per cent, per annum, interest then to cease.

The Banking Act of 1933 provides that this Certificate may not be cashed before maturity and that no interest be paid after maturity.

'V. O. Clark

Manager

'Not Subject to Check'

'Not Subject to Check'

The appellant claimed the certificate of deposit, which came into his possession as administrator of the estate of Cora E. Hunter, deceased, on her death, as the personal representative of said Hunter. Mrs. Young claimed the certificate,--as a gift inter vivos; as a gift causa mortis, or as joint deposit--constituting a contract, vesting in her the right of survivorship.

The circuit court denied her claim on all of said theories, except the last, holding that her right of survivorship was created by contract.

From that decree the administrator has appealed. Rule 36, Equity Practice, succeeding § 10390 of the Code of 1923, authorized the course of procedure taken by the parties. Code 1940, Title 7, Appendix, page 1081.

The statute, Code 1940, Title 5, § 122, provides: 'No certificate of deposit, issued by a banking corporation or trust company for any special deposit for which interest is to be paid, must be reissued but, on the return thereof, must be cancelled.'

In the light of this statute, each such deposit rightfully made stands on its own footing, unhampered by previous dealings between the parties in respect to the money rightfully deposited. There is no question that the money deposited belonged to Mrs. Hunter, or that she had the right to deposit the same, as she did.

The legal effect of the transaction evidenced by certificate No. 2106, of date June 23, 1942, was a loan of money by Mrs. Hunter to the bank, vesting the title to the money--the $7,500--in the bank, creating the relation of debtor and creditor, and the certificate which partakes of the nature of a promissory note is a chose in action, evidencing the right of its owner, at the due date therof, upon proper indorsement and surrender to call the loan. 7 Am.Jur. 316, § 445; Blakey v. Brinson, 286 U.S. 254, 52 S.Ct. 516, 76 L.Ed. 1089, 82 A.L.R. 1288; Mierke v. Jefferson County Sav. Bank, 208 N.Y. 347, 101 N.E. 889, 46 L.R.A.,N.S., 194, Ann.Cas.1914D, 21; Renfro Bros. v. Merchants & Mechanics' Bank, 83 Ala. 425, 3 So. 776.

We concur in the conclusion of fact stated in the decree of the circuit court (which the reporter will reproduce in the report of the case). At no time prior to the death of Mrs. Hunter, or since, has the claimant Mrs. Young acquired any vested interest in or right to possession of said chose in action. As to it Mrs. Hunter died intestate and the legal title passed to and vested in her personal representative. In this controversy between the administrator, the adverse claimant and the depository bank, the administrator represents the interest of the estate, including that of distributees, who may be proper parties, but are not necessary parties to the proceeding. Sovereign Camp. W. O. W., v. Snider, 227 Ala. 126, 148 So. 831; Burt et al. v. Brandon, 230 Ala. 85, 159 So. 691.

Under the facts stated in the decree, Clark, the custodian of the key to Mrs. Hunter's box, was Mrs. Hunter's agent, and there was no evidence showing delivery of the certificate in Mrs. Hunter's lifetime to Mrs. Young. Mrs. Young had no connection with the transaction evidenced by certificate of deposit No. 2106 and knew nothing about it. On principles stated in Smith v. Eshelman, 235 Ala. 588, 180 So. 313, Mrs. Young did not acquire the title to the chose by gift.

To support a claim under the contract theory there must have been a joint ownership and, in the absence of such vested interest during the life of the depositor, the right of survivorship does not exist. First Nat. Bank of Birmingham v. Lawrence, 212 Ala. 45, 101 So. 663.

Cases cited by appellee wherein a joint account was maintained on which both parties had the right to check, or a joint savings account to which both parties contributed showing a vested interest in both parties, are inapt as authorities to sustain the decree. Cases in that class cited and relied on by appellee are Deal's Adm'r v. Merchants & Mechanics' Sav. Bank of City of Norfolk, 120 Va. 297, 91 S.E. 135, L.R.A.1917C, 548; Kelly v. Beers, 194 N.Y. 49, 86 N.E. 980, 128 Am.St.Rep. 543; Malone v. Sullivan et al., 136 Kan. 193, 14 P.2d 647, 85 A.L.R. 275. In the last cited case, on which appellee most strongly relies, the account was opened in the name of both women, Amy Malone and Annie Williams, and Williams the survivor had the right to check on the joint account during the life of Malone. Moreover, the Revised Statute of Kansas provided (Rev.St.1923, 9-173): 'When a deposit has been made, or shall hereafter be made, in any bank or trust company transacting business in the state, in the names of two persons, payable to either, or payable to either or the survivor, such deposits or any part thereof, or any interest or dividend thereon, may be paid to either of said persons whether the other be living or not; and the receipt or acquittance of the person so paid shall be valid and sufficient to release and discharge the bank for any payment so made.' 85 A.L.R. 277, 278.

The decree of the circuit court in so far as it awards the certificate of deposit No. 2106, of date June 23, 1942 described in the bill to Annie Lou Young, is reversed and annulled, and one will be here rendered ordering, adjudging and decreeing that said certificate of deposit is the property of the estate of Cora E....