First Nat. Bank v. Connolly

• Decision Date: 02 June 1943
• Citation: 138 P.2d 613,172 Or. 434,143 P.2d 243
• Parties: FIRST NATIONAL BANK OF PORTLAND <I>v.</I> CONNOLLY ET AL.
• Court: Oregon Supreme Court

172 Or. 434

138 P.2d 613

143 P.2d 243

FIRST NATIONAL BANK OF PORTLANDv.

CONNOLLY ET AL.

Supreme Court of Oregon.

Argued September 16, 1942.

Modified June 2, 1943.

Rehearing denied November 16, 1943.

Trusts

1. In action by administrator of younger brother to trace money withdrawn from younger brother's bank account by elder brother and to establish lien on property acquired therewith, evidence that elder brother, during younger brother's life, had treated account as a trust fund required finding that money belonged to younger brother and that it was converted by older brother.

Banks and banking

2. It is presumed "prima facie" that fund deposited in bank belongs to person in whose name it is deposited, and burden of proof is upon another claiming such fund.

Banks and banking

3. Evidence that elder brother borrowed money from bank account in younger brother's name and left note and later repaid loan with interest indicated ownership of account by younger brother.

Gifts

4. The elements of a "gift inter vivos" are a donor competent to contract, freedom of will of donor, a completed gift with nothing left undone, delivery of property by donor and acceptance by donee, and immediate and absolute effectiveness of gift.

Gifts

5. To consummate a "gift", there must be a transfer of possession and of dominion over subject of gift.

Gifts

6. A "gift inter vivos" may be made by deposit of money in bank to credit of another, although mere fact of deposit, without other evidence manifesting intent to make gift and delivery and acceptance thereof by donee, is not sufficient.

Gifts

7. Delivery of money to bank under circumstances showing that it was intended as a gift to person in whose name or for whose benefit it is deposited is a sufficient "delivery" to establish a gift, since bank is regarded as agent for donee.

Gifts

8. Where elder brother opened checking account in name of younger brother to whom bank sent duplicate deposit slip and thereafter sent notices of withdrawals and deposits and only withdrawals by elder brother until after younger brother's death, were for purposes of investment, fund was a "gift" to younger brother.

Gifts

9. The rule that less evidence is required to establish delivery of gift from father to children than where no such relationship exists is applicable to establish delivery of gift from elder brother to younger brother.

Gifts

10. Where control that elder brother retained over bank account opened in name of younger brother was same as that of an agent or a trustee, such control was not inconsistent with a gift of account to younger brother.

Gifts

11. Where elder brother opened bank account in name of younger brother and thereafter retained such control of account as would an agent or trustee, conduct of elder brother expressed intention to make gift of money to younger brother and no express declaration was necessary.

Gifts

12. Evidence that elder brother retained power to draw on bank account opened for younger brother and after younger brother's death repaid sums drawn from account with interest and accepted certificate of deposit payable to younger brother's estate did not support contention that elder brother merely opened account to provide for younger brother unless elder brother needed fund first.

Gifts

13. Where evidence disclosed that bank notified younger brother of elder brother's deposit in his name by mailing duplicate deposit slip, rule that gift inter vivos is not effected by opening a checking account in name of another who has no knowledge of transaction was inapplicable.

Evidence

14. Where bank mailed duplicate deposit slip to person in whose name account was opened, such person presumably received slip.

Gifts

15. Where elder brother opened bank account in younger brother's name and younger brother was informed of opening of

account, in absence of anything to show that he rejected it, he was presumed to have accepted it.

Gifts

16. An acceptance of gift is presumed where it operates entirely for donee's benefit.

Trusts

17. The act of donor of bank deposit in causing fund to be transferred to his personal account to be used for his own purposes after donee's death constituted a "misappropriation" of fund and rendered him liable to estate of donee as a "trustee ex maleficio".

Banks and banking

18. Generally, where a deposit is made by one in another's name, deposit belongs to person named, but deposit may be made in name of person other than depositor and remain property of depositor so that bank is justified in recognizing his ownership where circumstances are such that deposit has not been put beyond depositor's control.

Banks and banking

19. Where one deposits money in another's name, bank is not protected in paying over deposit to one in whose name credit does not stand and who, in fact, is not entitled to it.

Banks and banking

20. Where elder brother opened checking account in younger brother's name, transaction "prima facie" established relation of "creditor and debtor" between younger brother and bank.

Banks and banking

21. Conduct of bank after elder brother had opened checking account in younger brother's name in sending duplicate deposit slips, advices of charge, and statements to younger brother, and in subsequently issuing a time certificate of deposit to his estate, constituted an "admission" by bank that younger brother was depositor.

Banks and banking

22. Where bank account belongs to one person, only justification of bank in paying account to another is that such other is authorized to receive it.

Principal and agent

23. Any agency existing in depositor's brother which would have justified bank in paying account to brother terminated on depositor's death, and personal representative of depositor was only one authorized to receive account.

Banks and banking

24. Where bank paid funds represented by certificate of deposit to credit of deceased depositor's estate to decedent's brother who was unauthorized to receive funds and in whom bank had no justification for assuming that such authority reposed, bank acted at its peril and was chargeable with participation with brother in wrongful "conversion" of fund.

Limitation of actions

25. Action by estate of deceased depositor against bank which more than six years previously had paid deposit to unauthorized person was not barred by six-year statute of limitations, since statute does not commence to run in favor of bank on general deposit not evidenced by writing fixing time of payment until demand and refusal, unless demand is waived.

Limitation of actions

26. Unauthorized act of bank in transferring credit from general deposit to a time certificate after depositor's death cannot alter application of rule that six-year statute of limitations does not commence to run in favor of bank on general deposit until demand and refusal.

Banks and banking

27. In action to recover money wrongfully paid out by bank to unauthorized person, where bank was in liquidation, there could be no recovery and only remedy was by presentation to liquidator of verified claim.

Trusts

28. Where one partner acquired trust money and commingled it with personal account and thereafter transferred large portion of personal account to partnership account, which funds were used for general partnership expenses and purchase of sheep, fund could not be sufficiently traced so as to authorize a lien on sheep.

Descent and distribution

29. Statute prohibiting purchases of property of estate by administrator inhibits only purchase by an administrator at his own sale and does not apply to a purchase of interest of an heir or legatee.

Descent and distribution

30. Sale by heir of interest in estate to administrator for fair consideration is valid notwithstanding statute prohibiting purchase of property of estate by administrator.

Executors and administrators

31. Where administrator and wife purchased interest of heirs in estate and paid all claims allowed thereby acquiring equitable

ownership of estate assets, act of administrator in making void sale of certain assets to wife did not impair equitable title or establish "fraud" against estate of creditor which had not filed a claim.

Executors and administrators

32. Where decedent had allegedly converted money belonging to estate of deceased brother and there was no way of identifying specific property into which converted fund could be traced, and administrator and other heirs did not know of conversion, brother's estate occupied position of a "general creditor" and after final administration without a claim being presented by brother's estate decree could not be vacated nor any relief obtained against administrator.

Executors and administrators

33. Under statute of non-claim, generally, all claims which are not presented prior to entry of final discharge are barred from payment out of estate funds.

Limitation of actions

34. Claim against estate for decedent's conversion of trust fund, promptly made after discovery of conversion but which discovery by reason of concealment was not made until after administration had been closed, was not barred by "laches", statute of non-claim or statute of limitations.

Wills

35. Statutes providing for suit by creditors of deceased persons against next of kin, legatees, heirs or devisees to recover distributive share for application on debt are intended to supplement provisions of probate code for collection of claims against estates of decedents.

Wills

36. At common law, heir was liable for debts by specialty of ancestor and bound to satisfy them to extent of value of land inherited, but if he aliened land before action against him for ancestor's debt, creditor has no remedy.

Descent and distribution

37. Common law rule that if heir aliened land before action against him for ancestor's debt, creditor had no remedy has been abolished and property descends to heir subject to debts of ancestor.

Executors...