Pyle v. East
| Decision Date | 16 December 1915 |
| Docket Number | 30366 |
| Citation | 155 N.W. 283,173 Iowa 165 |
| Parties | W. C. PYLE, Administrator, Appellee, v. W. R. EAST, et al., Appellants |
| Court | Iowa Supreme Court |
Appeal from Hamilton District Court.--C. E. ALBROOK, Judge.
ACTION at law upon a promissory note made by the defendants in the lifetime of the intestate. There was a judgment for plaintiff, and defendants appeal.
Reversed.
W. J Covil, for appellants.
Wesley Martin, for appellee.
The defendants admit the making of the note in suit, but allege that, at the time of its execution, and as a part of the same transaction, the payees therein named endorsed and signed upon the back of said instrument an agreement as follows They further allege that, at the time of making said note and the endorsement thereon, said instrument was, by agreement of parties, placed in the hands of a third person, J. E. Sogard, to hold and collect the interest thereon during the lifetime of the payee, and then to surrender or deliver it to East; that Sogard did in fact receive and hold the note during all the remainder of the lifetime of Morris, and then offered to turn it over to East; but the latter, to avoid any ground for criticism, suggested that it would be better to let the delivery be made through the court or administrator. For the reasons stated, the defendants deny plaintiff's right to maintain the action. Jury being waived, the issues were tried to the court, which found for the plaintiff.
The record indicates that Morris, who was the uncle of East, had no direct heirs. At the date of the note, he sold a tract of land to his nephew, and the note in suit represents a part of the purchase price. The papers in that transaction were drawn by the witness Sogard, a banker in that neighborhood, who, at the time, and at the request of Morris, wrote and witnessed the endorsement which we have above quoted. Morris then deposited with Sogard the note so endorsed, directing him to turn it over to East, at his (Morris') death, and saying, at the same time, "that the income should go to him as long as he lived, and when he was dead, it should be turned over to East." This testimony is in no manner disputed. The conclusion reached by the trial court appears to have been that the transaction witnessed by the endorsement on the note and by the testimony of Sogard shows no more than an imperfect attempt at testamentary disposition of property, or at best an incomplete gift by Morris to East, which never was consummated by delivery, and that, no title to the subject of the gift having passed to East in the lifetime of Morris, the note became, at the death of the latter, a part of the assets of his estate. In support of this theory, the court, in a written memorandum of its views, cites the following cases: Crispin v. Winkleman, 57 Iowa 523, 524, 10 N.W. 919; Schollmier v. Schoendelen, 78 Iowa 426, 43 N.W. 282; Furenes v. Eide, 109 Iowa 511, 80 N.W. 539; and In re Brown's Estate, 113 Iowa 351, 85 N.W. 617. We have examined each of these cases, as well as the citations therein made, and think they do not sustain the view of the trial court. The Crispin case involved a claim by the father of the deceased that the son, before his death, had authorized the father to use so much of his property or estate as might be necessary to pay the debts of the deceased, and apply the remainder to the support of his children. This claim was contested by the son's administrator, and the court held that the agreement on which the father relied was testamentary in character and, not being executed according to the law of wills, was void--a decision the correctness of which can be conceded. It does not, however, rule this case, in fact or in principle. The father there made no claim that the title had passed in the lifetime of the son, or that there had been any completed gift to him or to the children of the deceased. The court expressly says, The court does, however, hold and say--and this holding is in harmony with the claim of appellant in this case--that if the deceased had given the property in such a way that the title thereto had passed in his lifetime to the children, or to his father as trustee for their benefit, then the law would uphold it. The Schollmier case sustains the validity of a gift of a bank deposit, made by writing in the donor's bank book: "Pay to the order of Elizabeth Schoendelen and Dorothea Hasenmiller all within deposit after my decease." There was some evidence that the book was in the possession of one of the defendants at some time before the donor's death. Referring to the defense that her gift was of a testamentary character, the court says:
The court further held that the direction in the writing to make the payment after her death "related to the time when the interest transferred might be enjoyed, and not to its transfer." It is also there said that, if the book was delivered in the donor's lifetime, or if the assignment was delivered or "in any other manner given effect", then the title could be said to have passed. As we shall later see, the deposit of the note in this case in the hands of Sogard was in legal effect a delivery, sufficient to validate the transaction. The Furenes case relates to the alleged conveyance of land by three separate deeds to the grantor's grandchildren. These deeds were handed to a third person to be delivered, nothing being said about a delivery after the death of the grantor. One deed was delivered at once, while the other two were not delivered until after the grantor had died. The first deed was held to constitute a good conveyance, while the other two were of no effect, for want of delivery in the grantor's lifetime. That case in no manner controls the one at bar, where the delivery was in fact made to a third person, upon the express condition that the person so receiving it should surrender it to the defendant after the death of Morris. The court, in the cited authority, expressly distinguishes the case then before it from those where a third party taking the papers may be considered as acting for the grantee, as well as where the papers are placed in the hands of a third person, to be delivered after the grantor's death. So also in Brown's case, the court again expressly recognized the principle that, where a present delivery is intended, or the instrument is left with a third party, without reservation or right of recall, a present interest passes to the donee or grantee.
The additional precedents cited by counsel for appellee in this court are principally those announcing the rule that a mere gift which is testamentary in character will not be recognized or given effect by the courts unless it be made in writing and executed after the manner prescribed by statute for the execution of wills. Of the soundness of the proposition so relied upon, there can be no question; and if the transaction in the case at bar, witnessed by the endorsement on the note and the deposit of the paper with Sogard, is no more than a mere undertaking to make a gift, which should take effect only upon the death of Morris, then the judgment below is right, and should be affirmed. But it is our opinion that the undisputed facts demonstrate that this is not a case of testamentary disposition of property and that, under rules of law well established in this and other courts, the defendants have established a good defense.
In the first place, it does not seem to be necessary to the defense to show that a mere gift was intended. It appears in evidence that the note was given and this transaction had in the course of settlement for the purchase price of land sold by Morris to East, and that, in making such settlement, Sogard, who made the papers, was directed by Morris to prepare the endorsement, which was...
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