Murray v. Gadsden

• Decision Date: 22 May 1952
• Docket Number: No. 11197.,11197.
• Citation: 91 US App. DC 38,197 F.2d 194
• Parties: MURRAY v. GADSDEN et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

91 US App. DC 38, 197 F.2d 194 (1952)

MURRAY v. GADSDEN et al.

No. 11197.

United States Court of Appeals District of Columbia Circuit.

Argued January 9, 1952.

Decided May 22, 1952.

COPYRIGHT MATERIAL OMITTED

J. Flipper Derricotte, Washington, D. C., for appellant.

Alden W. Hoage, Washington, D. C., for appellee Vellmar G. Gadsden.

Samuel Scrivener, Jr., Washington, D. C., entered an appearance for appellee, The Perpetual Building Association.

Before CLARK, WILBUR K. MILLER and PROCTOR, Circuit Judges.

WILBUR K. MILLER, Circuit Judge.

On April 11, 1941, Emma G. Murray signed an instrument, prepared on a printed form, declaring her substantial savings account in the Perpetual Building Association to be thereafter a joint account in the names of herself and her sister, Vellmar G. Gadsden, "subject to order of either, and balance at death of either to the survivor."¹ Mrs. Murray signed two other forms, essentially identical with the first, on January 12, 1945, and December 23, 1946, respectively, in which she declared her two savings accounts in the Equitable Cooperative Building Association to be thereafter joint accounts in the names of herself and Mrs. Gadsden. Each of the forms was signed also by Mrs. Gadsden and by one witness.

Mrs. Murray died September 24, 1950. Mrs. Gadsden then withdrew the balances in the three accounts and deposited the money in her individual name. Soon thereafter, Mrs. Murray's administrator sued Mrs. Gadsden and the two building associations in the United States District Court for the District of Columbia, alleging Mrs. Murray had not intended the instruments to give Mrs. Gadsden a present interest in the savings accounts, and asking the court to declare the balances therein to be the property of his decedent's estate.

The building associations answered, setting forth the balances in the accounts at the date of death and praying the court to adjudge which claimant was entitled to receive the money.

Vellmar G. Gadsden moved for summary judgment, which was denied. Thereafter, she filed her answer, basing her defense principally upon the theory that the three printed forms signed by Mrs. Murray created a joint tenancy which conclusively established her right, as survivor, to the balances in the accounts at Mrs. Murray's death; that the parol evidence rule prevented extrinsic proof to the contrary.

After hearing evidence and making findings of fact therefrom, the trial judge concluded as a matter of law that each printed form was

"* * * a contract between Emma G. Murray and Vellmar G. Gadsden, which declared the account to be theirs as joint owners, subject to the order of either, and the balance, at death of either, to the survivor."

Then, relying upon our decision in Matthew v. Moncrief, 1943, 77 U.S.App.D.C. 221, 135 F.2d 645, 149 A.L.R. 856, the trial judge held that "such a written expression is conclusive and preclusive of all parole sic contradiction, there being no proof or allegation of fraud before this Court," and dismissed the administrator's complaint. He appeals.

In considering the case it must be remembered the accounts originally belonged to Mrs. Murray, the decedent. If the survivor, Mrs. Gadsden, is now entitled to them, ownership must somehow have passed from the decedent to her. She could have acquired the title which she claims only through a bequest, a contract, a trust, or a gift made by Mrs. Murray. The inquiry is, therefore, (a) whether the deposit memoranda, which the decedent signed and upon which the survivor bases her claim of title, bequeathed the accounts to Mrs. Gadsden, or (b) amounted to a contract under which she can now claim them, or (c) established a trust in her favor by virtue of which she now owns the corpus, or (d) amounted to a gift of the accounts by Mrs. Murray to Mrs. Gadsden so that the latter is now entitled to the balance.

(a) Mrs. Murray did not validly bequeath the accounts to her sister because the deposit memoranda were not executed in conformity with the Statute of Wills.

(b) The theory that Mrs. Gadsden owns the accounts by virtue of contracts cannot stand, for several reasons. In the first place the deposit declarations were at most contracts between the two individuals on the one hand and the building associations on the other. They were not contracts between the two women, as we hold later in this opinion. There was no consideration expressed, and none was pleaded or proved. Even if regarded as contracts between Mrs. Murray and Mrs. Gadsden, the documents did not set up a contractual arrangement giving title to Mrs. Gadsden as the survivor; for if the so-called contracts were to be effective only at Mrs. Murray's death, then they were testamentary in character and obviously ineffective for that purpose, — and any earlier transfer of title attributed to them could only have been by way of gift, which will be discussed hereinafter.

(c) We turn to the trust theory, although Mrs. Gadsden did not plead and does not argue that the deposit documents created an immediately effective trust in her favor under which the corpus passed to her at the settlor's death. She did suggest in her testimony that Mrs. Murray orally expressed a desire that at her death the accounts be divided among her surviving sisters. That amounts to saying the deposit memoranda established a testamentary trust, which could be done only by a validly executed will. So the validity of the trust theory depends on whether the instruments executed by Mrs. Murray established an immediately effective trust in Mrs. Gadsden's favor.

The mere language of the deposit documents, which makes no mention of a trust, does not raise the presumption that one was established. Even had it done so, the presumption would have been rebuttable. It is the donor's act which originates a trust and, when that result is attributed to some act of his, it is the intent with which he did the act which is material in determining whether a trust was in fact created.

These principles are well established by the decisions of the Maryland Court of Appeals, which we select from the welter of cases in many jurisdictions as being well reasoned, persuasive and sound.

In 1899 the Maryland court wrote two opinions which have become leading cases in that jurisdiction. It was confronted with two different situations concerning bank accounts which originally had been owned by one Elizabeth O'Neill. With respect to one of those accounts,² while Miss O'Neill was alive she caused the following entry to be made:

"Metropolitan Savings Bank, in Account with Miss Elizabeth O\'Neill. In trust for herself and Mrs. Mary Whalen, widow, joint owners, subject to the order of either; the balance at the death of either to belong to the survivor."

The court held this entry "constitutes a valid declaration of trust, in the absence of contravening proof * * *." But, despite the presumption that Miss O'Neill intended to establish a trust, which was raised by the language of the entry, the court held the presumption to be rebuttable and said the criterion was what she intended to accomplish. In that connection the opinion said, 43 A. at page 44:

"* * * It is the donor\'s act which originates the trust, and it is the intension with which he does the act that is material. The entry, unexplained, is a sufficient declaration of trust, because it indicates an intention to establish a trust, but this may be rebutted."

The companion case of Whalen v. Milholland, 1899, 89 Md. 199, 43 A. 45, 46, 44 L.R.A. 208, dealt with another bank account owned by Elizabeth O'Neill, who caused an entry to be made with respect thereto which did not contain the words "in trust for herself and Mrs. Mary Whalen," which appeared in the first case. This time the notation which she signed read as follows: "Elizabeth O'Neill and Mary Whalen. Joint owners. Payable to the order of either, or the survivor." The Maryland court held this language did not constitute a valid declaration of trust because it lacked the words of the entry in the other case which definitely indicated the intention of establishing a trust and raised a presumption to that effect. The words "joint owners" were said to be insufficient to raise such a presumption.

The later case of Coburn v. Shilling, 1921, 138 Md. 177, 113 A. 761, 768 had to do with a deposit entry by which the original owner of a bank account designated it as being in his name in trust for himself and another, to which were added the words "joint owners, subject to the order of either, balance at the death of either to belong to the survivor." Thus the case fell within the holding of the first Milholland case and the language of the deposit entry raised the presumption that a trust had been established. The proof tended to show that the arrangement had been made merely for the convenience of the original owner in having withdrawals made for him. The Maryland Court of Appeals held that such proof sufficiently rebutted the presumption that a trust was established which had arisen from the language of the deposit entry.

In this case the deposit documents do not contain any language from which the presumption of an intention to create a trust might flow. And even if the words "joint owners" could be thought to raise such a presumption (we agree with the Maryland court in rejecting the idea), it would be rebutted by proof tending to show the arrangement was only for Mrs. Murray's convenience.

Practically all cases on the trust theory involve situations in which it was contended that the original owner of the account had made himself a trustee for himself and another. We recall no case in which it was suggested that the original owner, in changing his account into the names of himself and another as joint owners, had made the person whose name he added a trustee. But whether the theory be that the original depositor was a trustee or that the newly added co-depositor was such seems immaterial; for the...