In re Di Santo's Estate

• Decision Date: 17 November 1943
• Docket Number: 29513.
• Citation: 142 Ohio St. 223,51 N.E.2d 639
• Parties: In re DI SANTO'S ESTATE.
• Court: Ohio Supreme Court

51 N.E.2d 639

142 Ohio St. 223

In re DI SANTO'S ESTATE.

No. 29513.

Supreme Court of Ohio

November 17, 1943

Syllabus by the Court.

Ownership of series D United States savings bonds, issued pursuant to the Second Liberty Bond Act, as amended and supplemented, and in such manner and subject to such terms and conditions as were prescribed therefor by the Secretary of the Treasury, is to be determined according to the tenor of such bonds, and where such bonds have been registered in the name of one natural person payable on death to a single designated natural person, upon the death of the first named natural person, they become the property of the named beneficiary and the proceeds of such bonds are not subject to administration in the estate of the first-named natural person. Rhorbacker, Exr., v. Citizens Building Ass'n Co., 138 Ohio St. 273, 34 N.E.2d 751, 135 A.L.R. 988 approved and followed.

Appeal from Court of Appeals, Cuyahoga County.

WEYGANDT C. J., and BELL, J., dissenting.

This case arose upon the exceptions of Frank DiSanto, one of the heirs at law of Louis DiSanto, deceased, to the inventory filed in decedent's estate. The matter was submitted upon a stipulation of facts to the Probate Court of Cuyahoga county, which court directed the administratrix to exclude from the inventory certain United States savings bonds which had been registered in decedent's name as owner, payable on death to certain beneficiaries named on the face of the bonds.

Louis DiSanto died intestate on November 23, 1941. In decedent's safe deposit box were found seven United States registered discount savings bonds, series D aggregating $5,500 maturity value. These bonds were issued under the Second Liberty Bond Act, as amended by Second 22 which was added by the Act of February 4, 1935, 49 Stat. 21, 31 U.S.C.A. § 757c, subsequently amended by the Public Debt Act of 1941, Act of February 19, 1941, ch. 7, Section 3, 55 Stat. 7, 31 U.S.C.A. § 757c, and circulars and regulations of the Secretary of the Treasury promulgated thereunder.

The offering circular pursuant to which these bonds were issued was Treasury Department circular No. 596, dated December 15, 1938, with first amendment dated March 27, 1940, and second amendment dated February 20, 1941, and provides (paragraph 14): 'All savings bonds issued pursuant to this circular shall be subject to regulations prescribed from time to time by the Secretary of the Treasury.'

All the bonds were registered in the name of Mr. Louis DiSanto with one of them payable on death to his widow and each of the remaining six payable on death to a named child.

Treasury Department circular No. 596 provided in part as follows:

' authorized Forms of Registration.

'8. United States Savings Bonds may be registered (1) in the name of any natural person (that is, an individual) whether an adult or a minor, (2) in the names of two (but not more than two) natural persons as co-owners, (3) in the name of one natural person payable on death to a single designated natural person, (4) in the name of any incorporated or unincorporated body, (5) in the name of a fiduciary, and (6) in the name of the owner or custodian of public funds. Full information as to the authorized forms of registration for United States Savings Bonds will be found in the regulations prescribed from time to time by the Secretary of the Treasury (see paragraph 14). These regulations may be seen at any post office and may be obtained from the Treasury Department, Division of Loans and Currency, Washington, D. C., or from any federal reserve bank.'

At the time of the death of Louis DiSanto all of the bonds here involved were registered in the beneficiary form prescribed in subdivision 3 of paragraph 8, supra.

The regulations in force at the time of the death of Louis DiSanto governing the issuance, transfer and ownership of the bonds, in question are contained in Treasury Department circular No. 530, fourth revision, dated April 15, 1941, with first amendment dated June 26, 1941. The regulations presently in force are contained in Treasury Department circular No. 530, fifth revision, dated June 1, 1942. The regulations contained in the fourth revision do not differ substantially in any respect here material from the regulations contained in the fifth revision. The regulations applicable to the bonds here in question provided in part in Section 315.12 thereof with respect to bonds registered in beneficiary form (3 Fed. Register, 3128, 5 Fed. Register, 1267, 6 Fed. Register, 2191):

'(a) Payment to registered owner. A savings bond registered in the name of one person, payable on death to a designated beneficiary, for example, 'Henry W. Ash, payable on death to John C. Black,' will be paid to the registered owner during his lifetime upon his properly executed request without regard to the designated beneficiary. If the beneficiary should predecease the registered owner the bond will be paid as though no beneficiary had been named in the registration.

'(b) Reissue during lifetime of registered owner. A savings bond registered in the name of one person payable on death to a designated beneficiary may not be reissued during the lifetime of such beneficiary so as to eliminate his name. If such beneficiary should predecease the registered owner, the bond may, upon appropriate request by the registered owner, and proof of the death of the beneficiary, be reissued in the name of the registered owner alone, or in his name payable on death to a new beneficiary.

'(c) Payment or reissue to beneficiary. If the registered owner dies without having presented and surrendered the bond for payment to a Federal Reserve Bank or the Treasury Department, and is survived by the beneficiary, upon proof of such death and survivorship, the beneficiary will be recognized by the Treasury Department as the sole and absolute owner of the bond, and payment will be made only to him, or, upon appropriate request by the beneficiary the bond may be reissued in his name alone or (if not a minor or under any other legal disability) in his name payable on death to a single designated beneficiary: Provided, however, That if the bond with a properly executed request for payment has actually been received by a Federal Reserve Bank or the Treasury Department, payment of the bond, or check if one has been issued, will be made to the estate of the deceased owner in accordance with the provisions of Section 315.16.

'(d) Payment or reissue after death of the surviving beneficiary. After the death of a surviving beneficiary who became entitled to the bond under the provisions of the next preceding paragraph, the bond will be paid or reissued in accordance with the provisions of Section 315.16, as though the bond were registered in the name of the surviving beneficiary alone. In this case proof of the death of both the registered owner and the beneficiary and of the order in which they died will be required.'

In the body of the bond form it is provided:

'This is a United States Savings Bond of Series D, Authorized by the Second Liberty Bond Act, approved September 24, 1917, as amended, and issued pursuant to Treasury Department circular No. 596, dated December 15, 1938, to which reference is made for a statement of the rights of holders, as fully and with the same effect as though herein set forth.

'This bond is not transferable; and, except as provided under said circular, it is payable, at maturity or on earlier redemption, only to the registered owner and upon the presentation and surrender of this bond with the request for payment duly executed on the back hereof, all in accordance with the provisions of said circular and the regulations prescribed from time to time thereunder.'

The Probate Court found that the bonds which had been included in the inventory of decedent's estate belonged respectively to the beneficiaries named in the bonds and sustained the exceptions. Appeal was taken to the Court of Appeals of Cuyahoga county wherein there was filed and allowed a 'Suggestion of interest of the United States of America.' The Court of Appeals affirmed the judgment of the Probate Court. The case is here following the allowance of a motion to...