Reel v. Hansboro State Bank

• Decision Date: 31 December 1924
• Citation: 201 N.W. 861,52 N.D. 182
• Court: North Dakota Supreme Court

201 N.W. 861

52 N.D. 182

ANNIE L. REEL, Respondent, v. HANSBORO STATE BANK, et al., and, Beulah H. Estes, Sarah L. Knox, Dorothy J. Knox, and F. v. Keeling, as Executor of the Estate of Margaret E. Ward, Deceased, Appellants

Supreme Court of North Dakota

December 31, 1924

Appeal from the District Court of Towner County, Buttz, J.

Affirmed.

Traynor & Traynor (Joseph R. Palmer and L. Edgar Estes of counsel) for appellants.

"Expressions are sometimes found in the books to the effect that gifts causa mortis are not favored in law because of the opportunity which they afford for the perpetration of frauds upon the estates of deceased persons by means of perjury and false swearing; but gifts of the character of those in question are not to be held contrary to public policy, nor do they rest under the disfavor of the law, when the facts are clearly and satisfactorily shown which make it appear that they were freely and intelligently made. Ellis v Secor, 31 Mich. 185. While every case must be brought within the general rule upon the points essential to such a gift, yet, as the circumstances under which donations mortis causa are made must of necessity be infinite in variety, each case must be determined upon its own peculiar facts and circumstances. Dickeschild v. Bank, 28 W.Va. 341; Kiff v. Weaver, 94 N.C. 274."

"The chief distinction between gifts inter vivos and those of the character here in question is that, while the former are consummated by delivery the title to the property is irrevocably vested, while in the latter the title is ambulatory and inchoate until the death of the donor occurs." Devol v. Dye, 24 N.E. 247.

"Where the owner of property in the hands of another directs the depositary to deliver it to a third person as a gift, such direction, if executed, constitutes a valid delivery. If the depositary in such case refuses or fails to make such delivery, it has been held that the gift fails." 28 C J. 639.

"Where however, the donor's retention of possession is inconsistent, with the idea of an executed gift, the gift fails." 28 C. J. 641.

"The requisites of a valid gift inter vivos are that there must be a gratuitous and absolute transfer of the property from the donor to the donee, taking effect at once, and fully executed by delivery of the property by the donor and acceptance thereof by the donee." Goelz v. Bank, 31 Ind.App. 67, 67 N.E. 232.

"Gifts inter vivos have no reference to the future, but go into immediate and absolute effect. A court of equity will not interfere and give effect to a gift that is inchoate and incomplete." Smith v. Dorsey, 38 Ind. 451, 10 Am. Rep. 118.

Cuthbert & Adamson, for respondent.

"A complete gift inter vivos may be made by transfer of property to a trustee for the benefit of the donee." Hulet v. R. Co. 14 N.D. 209.

"It has been frequently held that 'a gift of a bank deposit may be effected though there is no change of credit on the books of the bank by substantial acts of the donor tending to carry the gift into effect and give the donee dominion over such deposit.' 83 Minn. 54, 85 N.W. 915, 85 Am. St. Rep. 454--the same rule prevails where the gift is one inter vivos in trust and the trustee is given dominion over the deposit. Any substantial act on the part of the owner of the property tending to carry the gift into effect and give the donee dominion over the property so that she can appropriate it to her own use supports such gifts." 2 Schouler, Personal Property, 92; Fletcher v. Fletcher, 55 Vt. 325; Ross v. Draper, 55 Vt. 404, 45 Am. Rep. 624; Malone Estate, 13 Phila. 313; Re Schmidt, 65 Minn. 256.

"A complete gift inter vivos may be made by transfer of property to a trustee for the benefit of the donee." 107 N.W. 935; 24 Century Dig. § 36.

"No particular form of words is required to create a trust." Foster v. Murphy (Neb.) 107 N.W. 843; Hulet v. R. Co. 14 N.D. 209. We invite the court's attention to (Iowa) 115 N.W. 590.

Delivery of gift inter vivos may be either actual, constructive or symbolical. Pyle v. East (Iowa) 155 N.W. 283.

"If a gift inter vivos is absolute the mere postponement of the enjoyment until the death of the donor is immaterial and will not defeat the gift." Tucker v. Tucker (Iowa) 116 N.W. 119.

"A valid gift may be made so that the grantor shall retain the use of the property for life." Mollison v. Rittgers (Iowa) 118 N.W. 512; McNally v. McAndrew, 73 N.W. 316.

"It is immaterial that there is a postponement of the time of enjoyment of a gift until after the donor's death." Abegg v. Hirst (Iowa) 122 N.W. 838.

--Where the nature of the subject or the circumstances of the gift prevent or excuse an actual manual delivery there must be a constructive or symbolic delivery to pass title. Beaver v. Beaver, 117 N.Y. 421, 22 N.E. 940.

JOHNSON, J. BRONSON, Ch. J., and NUESSLE, BIRDZELL, and CHRISTIANSON, JJ., concur.

OPINION

JOHNSON, J.

Plaintiff bases her cause of action upon the following facts:

The plaintiff's sister, Mrs. M. E. Ward, lived in Elsberry, Missouri, up to the time of her death, on April 11, 1923. She had, for some time, maintained a time deposit in the sum of $ 3305.00 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 (N.D.) 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 Feb.) 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, North Dakota, 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 safe keeping. 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.

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; § 5543, Comp. Laws 1913; a gift inter vivos vests an irrevocable title on delivery; §§ 5539, 5540, Comp. Laws 1913.

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...