Reel v. Hansboro State Bank

• Decision Date: 31 December 1924
• Citation: 52 N.D. 182,201 N.W. 861
• Parties: REEL v. HANSBORO STATE BANK et al.
• Court: North Dakota Supreme Court

52 N.D. 182

201 N.W. 861

REEL

v.HANSBORO STATE BANK et al.

Supreme Court of North Dakota.

Dec. 31, 1924.

Syllabus by the Court.

A gift causa mortis does not pass an irrevocable title until the death of the donor; a gift inter vivos vests an irrevocable title on delivery.

The test to be applied in determining whether a gift is one inter vivos is whether it was made with the intent that it take effect immediately and irrevocably. If a “gift inter vivos,” it must have been fully executed by an unconditional delivery, actual or symbolical, having regard to the nature of the property and the circumstances.

For reasons stated in the opinion, gift held neither one inter vivos nor causa mortis.

Whether a trust has been created is primarily a question of intention. What the law requires in order to effect a divestiture of the beneficial interest must be done by the donor. If a trust has been created by a sufficient declaration, in a manner not contravening the statutes, it will be enforced in equity, though the consideration be wholly voluntary. If the gift be imperfect and something remains to be done by the donor to perfect an intention to make a gift or create a trust, a court of equity leaves the parties where it finds them. It will not aid in completing an incomplete transaction, or in enforcing that which rests only in an unexecuted intention. When, however, there is an actual settlement made for vesting the estate in a trustee and an intention so to do clearly and unequivocally appears, a court of equity will enforce it.

Where the donor attempts to part with dominion over his property in a manner sanctioned by law, such as by assignment, gift, or the like, which, if fully pursued, would effectuate a complete transfer of the title, equity will compel the claimant to stand on his legal rights, and, notwithstanding a clearly expressed purpose to part with the property, will refuse to impute a trust where one was not contemplated.

If the donor intends to and does, in fact, part with all interest in the property, possession for use and enjoyment during her lifetime does not divest the transaction of its trust character; and the fact that the trust sought to be created cannot be administered or settled until after the death of the settlor, on account of the reservation of interest, does not affect the validity of the trust.

A completed trust, without reservation of power of revocation, can only be revoked by consent of all the cestuis; and, though the trust be voluntary, no act of the donor after the completed gift, not consented to or acquiesced in by the donee, will affect the title in the latter.

A trust is not revoked by acts or conveyances consistent with its continued existence.

Appeal from District Court, Towner County; C. W. Buttz, Judge.

Action by Annie L. Reel against the Hansboro State Bank and others. Judgment for plaintiff, and defendants Beulah H. Estes and others appeal. Affirmed.Traynor & Traynor, of Devils Lake (Joseph R. Palmer, of Elsberry, Mo., and L. Edgar Estes, of Clarksville, Mo., of counsel), for appellants.

Cuthbert & Adamson, of Devils Lake, for respondent.

JOHNSON, J.

Plaintiff bases her cause of action upon the following facts:

The plaintiff's sister, Mrs. M. E. Ward, lived in Elsberry, Mo., up to the time of her death, on April 11, 1923. She had for some time maintained a time deposit in the sum of $3,305 in the defendant bank. On February 15, 1923, the certificate of deposit matured. After the 1st of January, 1923, and for some months prior thereto, Mrs. Ward's health had been failing. She was 81 years of age. In February, 1923, in a conversation with one Blackorby, Mrs. Ward stated that “she wanted to give the property she had up here [North Dakota] to her sister at Devils Lake, Mrs. Reel [plaintiff] and what she had down in Missouri to her sisters there.” She also told Blackorby that she had money in a bank in North Dakota; that she had heart trouble, and was not expected to live. She stated to this witness that “she had ordered a certificate of deposit made to her sister, Mrs. Reel.” A will was made by Mrs. Ward after this conversation and subsequent to the instructions relating to the certificate of deposit. The old certificate was sent to the defendant bank for renewal, but owing to illness in the family of Blackorby, the managing officer of the defendant bank, the certificate was not immediately renewed. It lay in a drawer in the bank many days without attention. Thereafter Mrs. Ward wrote the following letter in longhand:

“I sent you the certificate of deposit the 21st [meaning the 12th of February] 1923 and have not heard from it. Getting uneasy about it, although I know the trains have not been regular since the blizzard. If you have overlooked it, you be sure to send the interest to Elsberry, Mo., but you make the certificate to Mrs. A. L. Reel, Devils Lake, N. D., so if anything happens to me she can draw it. I have been quite sick, a little better now. You had to give up your mother. You have my sympathy. I know what that is. I hope your father is improving. Your friend, M. E. Ward.”

Inadvertently, the instructions of Mrs. Ward in this regard were not complied with, and a new certificate was prepared by a clerk in the bank to Mrs. Ward as payee. This certificate was not delivered to Mrs. Reel, but was mailed to Mrs. Ward. It was issued on February 24, 1923, but dated back to February 15, the maturity date of the old certificate. Mrs. Ward received the certificate some time before her death, placed it in her safety deposit box and delivered the box to one Dr. Keeling, her attending physician, to be put in a bank at Elsberry for safekeeping. Keeling is the executor of the will.

The will is dated February 13, 1923, and in it the testatrix devises all her real property in Missouri to the defendant Beulah Estes, a niece; and all the remainder of her estate, real and personal, to her three sisters, by name, including plaintiff, for their natural lives, the same to revert to Beulah Estes at the time of their death. Beulah Estes waited on Mrs. Ward in her last illness.

The plaintiff contends that she is the absolute owner of the fund in the Hansboro State Bank; that the letter, quoted supra, constitutes an absolute assignment or gift to her of that fund; that the transaction was a gift inter vivos; that it was the intention of the decedent, as expressed in this letter and in conversations, to make plaintiff the present owner of the deposit; and that Mrs. Ward retained no right in, or control over, the principal, reserving only the right to the interest; and that a trust was created. The defendants, other than the bank-the bank has not appealed-maintain that a gift of the deposit to the plaintiff was never consummated for want of delivery; that the bank, or its managing officer Blackorby, did not become a trustee of the fund for the benefit of the plaintiff; and that there was no acceptance of the gift by the plaintiff before Mrs. Ward changed her mind and revoked the same. The defendants, in effect, contend that the transaction constitutes at most a gift causa mortis; and that it was revoked before death.

[1] The distinction between a gift inter vivos and a gift causa mortis is that the latter does not pass an irrevocable title until the death of the donor (section 5543, C. L. 1913), a gift inter vivos vests an irrevocable title on delivery (sections 5539, 5540, C. L. 1913).

[2] The test to be applied in determining whether a gift is one inter vivos is whether it was made with the intent that it take effect immediately and irrevocably. If a gift inter vivos, it must have been fully executed by an unconditional delivery, actual or symbolical, having regard to the nature of the property and the circumstances. The fact that the donor is in extremis at the time the gift is made, does not, it has been held, necessarily determine its character as a gift causa mortis. If, as we have said, it was made with the intention that it should be immediately and irrevocably effective, with an intention to part both with possession and dominion, and was accompanied by a complete and unconditional delivery, it may, notwithstanding the donor is in extremis, be a gift inter vivos. Gilligan v. Lord, 51 Conn. 562;Coffey v. Coffey, 179 Ill. 283, 53 N. E. 590. By statute in this state, a gift made during the last illness of the donor, or under circumstances which would naturally impress him with an expectation of speedy death, is presumed to be a gift causa mortis. Section 5542, C. L. 1913.

There is a difference clearly recognized in the decisions between a gift inter vivos and a declaration of trust. Baker v. Baker, 123 Md. 32, 90 A. 776. In the case of a declaration of trust the legal title may be retained by the donor or transferred to a third person with the equitable title vesting in the cestui que trust. An intention to make a gift in præsenti ordinarily excludes the idea of a declaration of trust. In re Ashman, 223 Pa. 543, 72 A. 899; 28 C. J. 624.

[3] We are of the opinion that the record presents neither a case of a gift inter vivos nor one of causa mortis. There was not such delivery of the evidence of the debt-the certificate of deposit-as will satisfy the rule as stated above and laid down in Ramsdel, v. Warner, 48 N. D. 96, 183 N. W. 281. The evidence is wholly insufficient to support the conclusion that Mrs. Ward was in immediate fear or contemplation of death, at the time she wrote Exhibit 2, or even when she talked with the witness Blackorby. She thought the end might not be far away, but it does not appear that she thought it was imminent. Though ill, she was not confined to her bed when the will was made.

It is contended that a voluntary, irrevocable trust was created. Section 6277, C. L. 1913, is as follows:

“Subject to the provisions of section 5364 a voluntary trust is created as to the trustor and beneficiary by any words or acts of the trustor, indicating with...