Gary Ex'r v. Bank

• Court: United States State Supreme Court of South Carolina
• Writing for the Court: McIver, J
• Citation: 2 S.E. 568,26 S.C. 538
• Parties: Gary, Ex'r, etc., v. People's Nat. Bank.
• Decision Date: 21 April 1887

2 S.E. 568
(26 S.C. 538)

Gary, Ex'r, etc.,
v.
People's Nat. Bank.

Supreme Court of South Carolina.

April 21, 1887.

Executor—Assets—Deposit, as Guardian.

Money deposited in a bank to the credit of " G., Guardian, " is not assets of G. in the sense that it is subject to be checked out, upon the death of G., by his executor. Simpson, C. J., dissents.

Appeal from circuit court, Charleston county.

Action by William T. Gary, executor, respondent, against the People's National Bank, appellant, to recover $4,861.65, with interest.

J. N. Nathans, for appellant.

Lord & Hyde, for respondent.

McIver, J. This was a controversy submitted without action under the provisions of the Code. The facts, as agreed upon, are as follows: The late Martin W. Gary deposited in the People's National Bank $4,861.65, to his credit as guardian, which deposit was in fact made by said Gary as guardian of N. George Evans, John Gary Evans, Barnard B. Evans, and Mary Evans. On the ninth of April, 1881, M. W. Gary died, leaving a will of which the plaintiff is the duly-qualified executor. On the first of June, 1881, the plaintiff duly notified the bank of his qualification as executor of M. W. Gary, and demanded payment of the money deposited to the credit of M. W. Gary as guardian. The bank declined to pay on the ground that the money could only be drawn by the official successor of M. W. Gary, guardian, and that the check of the plaintiff as executor would not be a sufficient discharge of the bank. On the second of January, 1886, $4,000 of the deposit was paid to the joint order of W. T. Gary, executor, and two of the wards, with the express understanding that such payment was to be without prejudice to any of the questions involved in the present controversy. Upon these facts the following questions were submitted for the determination of the court: (1) Had W. T. Gary, as executor of M. W. Gary, the right to draw out, upon his check as executor, the deposit standing in the name of M. W. Gary, guardian? (2) Is W. T. Gary, executor, entitled to interest on the deposit from the time payment was demanded and refused, to-wit, first of June, 1881? The circuit judge decided both of these questions in favor of the plaintiff, and rendered judgment accordingly, and from this judgment defendant appeals, upon the ground that there was error in so deciding.

The decision below seems to be based upon the idea that, inasmuch as the legal title to the money on deposit was in M. W. Gary, his executor was alone authorized to draw it out, though the circuit judge seems to recognize the equity of those entitled to the beneficiary interest in the money to interpose for the protection of such interest. But as the wards, who were the persons entitled to the beneficiary interest, have not seen fit to interpose for the protection of their interests, and as the bank clearly has no equity to be protected, the executor, as holding the legal title, is entitled to draw the money.

It seems to us that due regard was not had to the fact that, in the eye of the law, M. W. Gary as an individual and M. W. Gary as guardian are two distinct and different persons, possessed of distinct and different rights. This distinction is important, and must be kept in mind throughout this discussion. Under this view, while the plaintiff is the executor of M. W. Gary, and as such has become the legal owner of all the personal assets of his testator, he is not the executor of M. W. Gary, guardian, and therefore has acquired no legal title to any assets which may have been in the hands of the said M. W. Gary as guardian during his life-time. Such assets belong to his wards, and do not descend to his executor. It seems to be conceded in the authorities cited in the circuit decree that if M. W. Gary had, in his life-

[2 S.E. 569]

time, undertaken to draw this money on his own individual check, the bank would have been justified in refusing payment, and could have required him to draw the check in his name as guardian; and this clearly recognizes the distinction above pointed out. Now, if M. W. Gary could not in his life-time have drawn this money upon his own individual check, it would seem to follow necessarily that his executor could not, after his death, draw the money; for certainly the executor could have no higher right or better authority than his testator.

The whole question turns upon the inquiry whether the money deposited in the bank to the credit of M. W. Gary, guardian, and not to the credit of M. W. Gary individually, constituted any part of the assets of M. W. Gary's estate, or whether it was a part of the assets of his wards' estate in his hands as guardian. If it was the former, then, undoubtedly, the executor would be entitled to receive the money to be administered according to the terms of the will from which he derived his authority; but, if the latter, the executor would have no right whatever to the money, as it would properly belong, both legally and equitably, to the successor of M. W. Gary in the office of guardian. From what source the money in question was derived does not appear, but it does appear that M. W. Gary himself separated it from his own money, and designated it as the money of his wards, by depositing it to his credit as guardian. He thereby distinctly declared that this money was not a part of his own assets, but was a part of the assets of his wards in his hands as guardian, —as much so as if he had sealed up the money in a bag, and so marked it, which was afterwards found in his own safe, in which case it is clear that the executor would have no legal right to the money, as it constituted no part of the assets of his testator's estate, as shown by the testator's own act and declaration.

It is urged, however, that a deposit in a bank is in the nature of a loan to the bank, and the rights of the parties must be considered in that aspect. Assuming this to be so, and looking at the transaction here brought in question as if M. W. Gary had loaned this money to the bank, and taken its note payable to himself as guardian, let us inquire who, upon the death of M. W. Gary, would be entitled to the note, —his executor or his successor as guardian. In 2 Williams, Ex'rs, (2d Amer. Ed.) 1192, it is said: "The absolute property of the goods must have been vested in the testator in order to make them assets in the hands of the executor. Therefore, if testator takes a bond for another in trust, and dies, this is not assets in the hands of his executor." This shows that, if the deposit be regarded as a loan to the bank secured by a note payable to M. W. Gary as guardian, such note, not being a part of the assets of the testator, would not pass to the executor. This view is also supported by analogy drawn from the rule, now well settled in this state, that an administrator de bonis non cum testamento annexo may sue for and recover, not only specific assets belonging to his testator, but also money, the substitute of such assets, for the purpose of paying his testator's debts or legacies, or accomplishing any other purpose indicated in the will.

It is true that it was at one time held, or rather stated, (for the point was not really necessary to the decision of the case,) in the case of Smith v. Car-rere, 1 Rich. Eq. 123, that an administrator de bonis non could only recover from the personal representative of the deceased executor or administrator such chattels or personal...