People's Sav. Bank v. Webb

• Decision Date: 06 March 1899
• Citation: 42 A. 874,21 R.I. 218
• Parties: PEOPLE'S SAV. BANK v. WEBB et al.
• Court: Rhode Island Supreme Court

42 A. 874

21 R.I. 218

PEOPLE'S SAV. BANK

v. WEBB et al.

Supreme Court of Rhode Island.

March 6, 1899.

Action by the People's Savings Bank against James H. Webb and others to determine claims to a deposit Judgment in favor of claimant Webb.

James, William R. & Theodore P. Tillinghast, for complainant .

William B. Tanner and Lewis A. Waterman, for respondents.

STINESS, J. The question in this case is whether James H. Webb, by depositing money in a savings bank in his own name as trustee for his son Fred E. Webb, constituted a trust, in the absence of any intent on his part so to do other than in case of his death, and also in the absence of any other evidence of a present intent, either by notice to the beneficiary or otherwise. Two points are involved: First, whether a trust is created by the terms of the deposit as a conclusion of law; and, second, whether the testimony of the depositor is now admissible as to his intention at the time of the deposit upon the question of fact.

Many eases of this kind have arisen, under a variety of circumstances. We find deposits as trustee for another; "in trust for" another; in the name of another; in the name of the depositor and another, or the survivor of them; with and without notice to the one who is named as beneficiary; and with and without evidence of the intent of the deposit. Where one appears to have made a purely gratuitous disposition of his funds for the benefit of another, free from any legal or moral obligation to the donee, the act should be construed with liberality, rather than with strictness, towards the original owner. If he has completed a trust or gift a court must execute it if it is inchoate, there is nothing for a court to carry out. The underlying question, both in trusts and gifts, is the intention and act of the donor. Hence we find the same general rule in both classes of cases. There must be a present intent to make a trust or gift at the time; there must be an execution of the intent by some act, such as delivery of the evidence of title, or a notice and acceptance of the trust; and the intent and act must be such as to give a present right or benefit to the donee. When any of these elements are wanting, the gift or trust is incomplete. Examples of a completed trust are found in Tillinghast v. Wheaton, 8 R. I. 536; Ray v. Simmons, 11 R. I. 266; and In re Atkinson, Petitioner, 16 R. I. 413, 16 Atl. 712. A gift was held to be consummated in the first case by the delivery of a savings-bank book; in the second, where one deposited money in his own name as trustee for his stepdaughter, and showed her the pass book; and in the third, where there was a similar deposit, with no delivery of the book, but the depositor told his children what he had done, thus completing the constitution of the trust. This last case points out the distinction between a gift, which requires a delivery of the thing given, actual or symbolical, and the creation of a voluntary trust, which does not require a delivery of the subject of the trust but a retention of it by the trustee for the beneficiary's benefit. In Case v. Dennison, 9 R. I. 88, a gift causa mortis was held to be incomplete without delivery; and in Institution v. Carpenter, 18 R. I. 287, 27 Atl. 337, a trust was held to be incomplete because it was not to take effect until the depositor's death, she to have the benefit and control of the fund in the meantime. In that case, referring to authorities which were cited, we said that they differed in regard to what would amount to an execution of the trust, but agreed in saying that the donor must bold the fund, in præsenti, as trustee, which element was lacking in the case then before us. In mentioning the difference, as to the execution of a trust, we remarked that in New York the mere deposit as trustee was sufficient, while the Massachusetts rule required an acceptance, by notice or otherwise, to complete the gift, upon the ground that a mere deposit as trustee, while the depositor retains control of the deposit, only shows an inchoate purpose on his part, which he may afterwards conclude not to carry out, and which he does not carry out until be notifies the beneficiary, and the gift is presumed to be accepted. The statement of the New York rule was made upon the authority of Martin v. Funk, 75 N. Y. 134, cited also in Willis v. Smyth, 91 N. Y. 297; Mabie v. Bailey, 95 N. Y. 206; Beaver v. Beaver, 117 N. Y. 421, 22 N. E. 940. Since then, however, the case of Cunningham v. Davenport, 147 N. Y. 43, 41 N. E. 412, on the plaintiff's deposit of money as trustee for his brother, has held that these cases only decide that a trust is created when "the depositor dies before the beneficiary, leaving the trust account open and unexplained"; in other words, that prima facie such an account is a trust. The case further holds that Cunningham's denial of an intention to create a trust or to make a gift was sufficient. It is summed up in these words: "We have presented here the case of a man who takes his own money, and deposits it to his own credit in trust for another, making no...