Smith v. Clark

• Decision Date: 07 January 1952
• Docket Number: No. 4-9645,4-9645
• Parties: SMITH v. CLARK.
• Court: Arkansas Supreme Court

Page 776

244 S.W.2d 776

219 Ark. 751

SMITH v. CLARK.

No. 4-9645.

Supreme Court of Arkansas.

Jan. 7, 1952.

Lee Ward, Paragould, for appellant.

Barrett, Wheatley & Smith, Jonesboro, for appellee.

MILLWEE, Justice.

Francis Cline Clark died intestate in Craighead County on July 2, 1949 survived by appellant, Frances Jeanette Smith, his daughter, and by appellee, Fred Clark, a brother. Appellant brought this suit as administratrix of her father's estate to recover $2,800, which sum she alleged belonged to her as heir and was fraudulently withdrawn from her father's bank account by appellee and converted to his own use.

Appellant attached to her complaint certain interrogatories which she asked that appellee be required to answer under oath. Five of the six questions propounded related to circumstances surrounding the issuance and delivery to appellee of a check by the deceased covering the funds in controversy.

The answer of appellee contained a general denial and further alleged a gift to him by his brother of the balance of the $2,800 remaining after payment of funeral and other expenses incident to his brother's last illness in the approximate sum of $1,465. Answers to the interrogatories were attached to appellee's answer signed by his solicitors. In response to appellant's motion for summary judgment because appellee had failed to answer the interrogatories under oath, appellee refiled the answers under oath.

Appellant filed a demurrer to the answer on the ground that it did not state facts sufficient to constitute a defense and also filed a reply denying generally the allegations of the answer.

After trial on oral testimony, the cause was taken under advisement. A decree was subsequently entered admissing appellant's complaint and finding that the evidence established a gift causa mortis to appellee from his brother of the funds in controversy.

There is no dispute in the evidence which is to the following effect. Francis Cline Clark and his wife separated about 1930 and were divorced in 1931 or 1932. Appellant, who is their only child, lived with her material grandparents for several years following the separation and until she married. After the separation, Francis Cline Clark lived with appellee and his family. Although he visited appellant after her marriage, Clark continued to make his home with appellee for more than fifteen years and until his death in July, 1949. Clark became afflicted with cancer and in May, 1949 entered a Jonesboro Hospital where he was confined for eight weeks before his death. Several days prior to June 25, 1949, and after he had undergone two operations, Clark delivered to appellee his signed check in blank on the Security Bank and Trust Company of Paragould, Arkansas. He directed appellee to withdraw his deposit of approximately $2,800 in the bank, pay all medical expenses and other debts owed by him (Francis Cline Clark), and that appellee keep for himself any balance remaining in the event of his brother's death. Appellee took the signed blank check to the bank on June 25, 1949 where a teller filled in the date and amount of the check payable to 'cash' for $2,800, as directed by appellee. Appellee endorsed the check and received the $2,800. He paid the hospital, medical and other bills incurred on account of his brother's last illness in the amount of approximately $1,400.

Two nurses who attended Clark while confined in the hospital testified to conversations in which he told them that he would never get well, that appellee and his family had done more for him than anybody, that he intended to sign a check for appellee to draw his money out of the bank and wanted appellee to have the money remaining after payment of his hospital bills and other debts. Clark later told them that he had signed such a check. Similar testimony was given by appellee's daughter. It was shown that decedent customarily signed checks in blank with directions to the payee to fill in the blanks. It was also shown that he was devoted to appellee and his family. An automobile owned by Francis Cline Clark was turned over to appellant as administratrix and there was some evidence that he had a $1,000 life insurance policy payable to appellant.

Appellant first contends that the answer of appellee did not state facts sufficient to constitute a defense to the complaint and that her demurrer to the answer should now be sustained. Although the record does not show that the demurrer was ever presented to the trial court, Appellant says the question is still before this court by virtue of Ark.Stats. § 27-1140. This statute provides that unless the demurrer is presented to the court before calling a cause for trial, it shall be regarded as waived as to all points except the jurisdiction of the court, and that the pleading demurred to does not state facts sufficient to constitute a cause of action, or defense.

We think appellant's contention is untenable. The answer of appellee, after admitting that Francis Cline Clark died intestate and that appellant was administratrix of his estate, denied 'each and every other material allegation contained in the complaint'. Thus we have a general demurrer to an answer containing a general denial of the facts alleged in the complaint. The authorities generally hold that a denial is not subject to demurrer where it presents an issue on material allegations. In 71 C.J.S., Pleading, § 241b, it is said: 'It has been held that an answer which contains a general denial coupled with, or contained in, allegations and statements of fact purporting to constitute an affirmative defense is not subject to successful attack by demurrer, although the new matter be itself does not constitute a defense.' The demurrer to appellee's answer admitted the truth of its allegations for the purpose of the demurrer. Since the answer contained a general denial of the allegations of the complaint, it stated a good defense and the demurrer could properly have been overruled for this reason. But the answer also set up additional allegations which, if true, were sufficient in our opinion to establish a gift causa mortis. We deem it unnecessary to set out these rather lengthy allegations which are in substantial conformity with the proof adduced by appellee as hereinbefore set out.

So we consider appellant's contention that the allegations of the answer are insufficient to establish a gift causa mortis in connection with her further contention that the evidence is insufficient to prove such gift. It is well settled that gifts causa mortis as well as gifts inter vivos must be established by clear and convincing testimony. Bennett v. Miles, Administrator, 212 Ark. 273, 205 S.W.2d 451. There is considerable conflict in the authorities as to whether the donor's own check may be the subject of a gift causa mortis. Many courts hold that a gift of the donor's own check made in expectation of death is not the subject of a gift, either inter vivos or causa mortis, where such check is not accepted or paid by the bank before the donor's death. 38 C.J.S., Gifts, § 106; Anno. 20 A.L.R. 177, 44 A.L.R. 625, 53 A.L.R. 1119. But this court is committed to the so-called minority rule which holds that one's check or draft may be the subject of a valid gift by the maker although it is not presented for payment until after the death of the donor.

In the leading case of Carter v. Greenway, 152 Ark. 339, 238 S.W. 65, 67, Judge Hart stated the rule as follows: 'It is earnestly insisted by counsel for appellants that a check cannot be made the basis of a gift causa mortis. There is some conflict and confusion in the authorities on this question. But we think that the better reasoning and the trend of our own authorities, where the rights of creditors are not involved, is that, when the delivery of the check is coupled with an intent to transfer a present interest in the money, and no revocation is attempted, the intent of the donor should be given effect, and that the donee has the right to the payment of the check after the death of the drawer as well as before.'

In that case the court also approved the following statement by the New York Court in Ridden v. Thrall, 125 N.Y. 572, 26 N.E. 627, 629, 11 L.R.A. 684: 'To consummate a gift, whether inter vivos or causa mortis, the property must be actually delivered, and the donor must surrender the possession and dominion thereof to the donee. In the case of gifts inter vivos, the moment the gift is thus consummated it becomes absolute and irrevocable. But in the case of gifts causa mortis more is needed. The gift must be made under the apprehension of death from some present disease, or some other impending peril, and it becomes void by recovery from the disease or escape from the peril. It is also revocable at any time by the donor, and becomes void by the death of the donee in the lifetime of the donor. It is not needful that the gift be made in extremis when there is no time or opportunity to make a will. In many of the reported cases the gift was made weeks, and even months, before the death of the donor, when there was abundant time and opportunity for him to have made a will. These are the main features of a valid gift causa mortis as they are set forth in many text-books and reported cases.' See also Lowe v. Hart, 93 Ark. 548, 125 S.W. 1030.

This court is also committed to the rule that when a negotiable instrument is intrusted by one who signs it to the custody of another with blanks left therein, the instrument carries an implied authority to fill up the blanks. White-Wilson-Drew Co. v. Egelhoff, 96 Ark. 105, 131 S.W. 208. In that case, as here, the person receiving the instrument requested a third party to do the mechanical act of filling in the blanks. See also, Saxon v. McGill, 179 Ark. 415, 16 S.W.2d 987.

Appellant earnestly insists that a valid gift was not proved because the check was delivered to appellee in blank. It is also argued that...