First Nat. Bank of Lyndhurst v. Rutherford Trust Co.

• Decision Date: 23 November 1931
• Citation: 157 A. 142
• Parties: FIRST NAT. BANK OF LYNDHURST v. RUTHERFORD TRUST CO. et al.
• Court: New Jersey Court of Chancery

157 A. 142

FIRST NAT. BANK OF LYNDHURST

v. RUTHERFORD TRUST CO. et al.

Court of Chancery of New Jersey.

Nov. 23, 1931.

Syllabus by the Court.

A valid gift inter vivos can only be established by showing: First, a donative intention on the part of the donor; second, a delivery of the subject-matter of the gift in the manner in which its delivery is most capable; third, that the donor has stripped himself of all ownership and dominion over the subject-matter of the gift.

The burden of proving the existence of each of these prescribed elements, indispensable to a valid gift inter vivos, by evidence that is clear, cogent, and convincing, is upon the one who asserts and seeks to establish such a gift.

Declarations of the alleged donor, written or otherwise, tending to show the existence of a state of mind and purpose in him, wholly inconsistent with the making of such a gift, may, together with all other evidence bearing thereon, properly be considered by the court, in arriving upon its determination, as to what the alleged donor's intention or state of mind was at the time of his having made the alleged gift.

Bill of interpleader by the First National Bank of Lyndhurst, against the Rutherford Trust Company, executor of the estate of Otto Walsh, deceased, and Lucy Szableskl.

Decree in accordance with opinion.

Leo F. Reilly, of Lyndhurst, for complainant.

Stanton T. Lawrence, of Rutherford, for defendant Rutherford Trust Co.

Conkling, Smith & Towe, Harry L. Towe, and Edward J. Luce, all of Rutherford, for defendant Szableski.

LEWIS, Vice Chancellor.

On January 16, 1930, Otto Walsh died testate, leaving, amongst other property, the sum of $13,670.07 in a savings account which he kept at the First National Bank of Lyndhurst, N. J., the complainant herein. Defendant Rutherford Trust Company, as the executor of his estate, claimed this fund as part of his estate, while defendant, Lucy Szableski, claimed it as a gift inter vivos to her; whereupon complainant filed its bill of interpleader. The question here presented is as to the true ownership of this fund.

From the undisputed testimony it appears that the decedent, when about 30 years of age, had emigrated from Germany to the United States, where he continued to reside until the time of his death, when he was almost 70 years of age. At first he took up his residence in Pittsfield, and then in Scranton, Pa., from where he finally moved to Lyndhurst, N. J., taking up his residence on the second floor of the building known as No. 748 Jersey avenue, which was owned by defendant Lucy Szableski and her husband, who occupied the apartment on the first floor thereof. It was in these premises, located almost within a stone's throw pf the D. L. & W. Railroad Shops, where he was employed, that the testator lived during the last twenty-three or twenty-four years of his life.

While living there, it seems that fate was very unkind to him, for one misfortune after another befell him. First two of his children died, then his wife passed away, and finally Richard, his only remaining child, was also summoned by death, leaving him all alone, without family or kin, in this country. However, he continued to maintain this same apartment, where he lived a lonely, almost isolated, life. Aside from a sister, a niece, and the latter's children, all of whom resided in Germany, he had no relatives or kin. He had but one intimate friend, Greenwald, whom he had appointed as sole executor under the will which he had made in 1927.

Despite his moderate earnings, his constant application to work and penurious mode of living enabled him to accumulate an estate, which, at the time of his death, amounted to about $37,000. This estate consisted of bonds, mortgages, and several bank accounts, the largest single item of all of which is represented by the money in the savings account, which constitutes the subject-matter of the present interpleader and controversy.

In support of her claim to the money in this savings account, defendant Lucy Szableski, has produced the bank book therefor and the testimony of her son, Stanley, who testified with respect to the statements alleged to have been made by decedent at the time of its delivery to her; she herself having been precluded from testifying with respect thereto by the provisions of our Evidence Act (2 Comp. St. 1910, p. 2216 et seq.). Hence her entire case rests upon his testimony alone, upon which it must stand or fall.

While the law recognizes and will sustain a gift inter vivos, whenever one is satisfactorily established, nevertheless public policy requires that the evidence adduced in support thereof should be considered in the light of and tested by those sound safeguards against the perpetration of fraud and perjury which the law has so wisely laid down and prescribed in such cases. All of our cases hold that such a gift can only be established by showing: First, a donative intention on the part of the donor; second, a delivery of the subject-matter of the gift in the manner in which its delivery is most capable; third, that the donor has stripped himself of all ownership and dominion over the subject-matter of the gift. Swayze v. Huntington, 82 N. J. Eq. 127, 87 A. 106, affirmed 83 N. J. Eq. 335, 91 A. 1071; Mullen v. Mullen, 98 N. J. Eq. 728, 130 A. 628, affirmed 98 N. J. Eq. 727, 130 A. 632; Page v. Afflerbach, 102 N. J. Eq. 390, 140 A. 792, affirmed Reeves v. Reeves, 102 N. J. Eq. 436, 141 A. 175; Kirkpatriek v. Kirkpatrick, 106 N. J. Eq. 391, 151 A. 48.

Tbe burden of satisfactorily proving the existence of each of these prescribed elements, by evidence that is both clear and convincing, is upon the one who asserts and seeks to establish such a gift. And with all the more force and reason is this wholesome rule applicable in a case, such as is the one sub judice, where the alleged gift is asserted for the first time only after death has sealed the lips of the alleged donor. Before a gift, asserted under such circumstances, will be sanctioned and sustained by this court, it should require the production of proof that is both cogent and convincing in quality. Madison Trust Co. v. Allen, 105 N. J. Eq. 230, 147 A. 546; Wright v. Sanger, 101 N. J. Eq. 203, 137 A. 657; Schroeder v. Stoky, 2 N. J. Misc. R. 760. Has, then, the defendant Lucy Szableski produced such proof?

Her son, Stanley, testified that, on the day preceding the testator's death, he, upon arriving from school for lunch, did not find his mother at home; that he then went up to the testator's apartment, where he saw his mother and a. doctor standing in testator's bedroom; that his mother then went downstairs to prepare his lunch, while he remained outside of testator's room and heard the doctor advise testator to go to the hospital; that, when his mother returned, he went downstairs, had his lunch, and then came up again; that he saw the testator, as he was about to start downstairs, hand his mother something,...