Smolin v. First Fidelity Sav. and Loan Ass'n

• Decision Date: 27 April 1965
• Docket Number: No. 206,206
• Citation: 209 A.2d 546,238 Md. 386
• Parties: Edwin M. SMOLIN v. FIRST FIDELITY SAVINGS & LOAN ASSOCIATION, Inc.
• Court: Maryland Court of Appeals

Page 386

238 Md. 386

209 A.2d 546

Edwin M. SMOLIN v. FIRST FIDELITY SAVINGS & LOAN ASSOCIATION, Inc.

No. 206.

Court of Appeals of Maryland.

April 27, 1965.

Rolf A. Quisgard, Jr., Baltimore (Marvin Steinberg, Baltimore (on the brief), for appellant.

Eugene A. Alexander, III, Baltimore (H. Paul Rome, Baltimore, on the brief), for appellee.

Before PRESCOTT, C. J., and HAMMOND, MARBURY, SYBERT and BARNES, JJ.

BARNES, Judge.

This appeal resulted from the denial by the Circuit Court of Baltimore City (Oppenheimer, J.) of the petition of Edwin M. Smolin, the appellant (Smolin), filed April 24, 1963, to require the conservator (now receiver) of the First Fidelity Savings & Loan Association (First Fidelity) to pay Smolin the sun of $4969.35, allegedly Veterans Disability Retirement payments deposited by Smolin in Account No. 60483 of the Association. Judge Oppenheimer had overruled the exception of Smolin to the Report of a Special Master in which it was recommended that the relief prayed for in the Smolin petition be denied.

The facts are not in dispute, and are as follows: On September 23, 1947, Smolin, a Second Lieutenant in the United States Army in World War II, was granted Veteran Retirement pay in the amount of $184.05 monthly, and has been paid this monthly retirement pay since that time. At the time of allowance of the retirement pay by the Army Retirement Board, Smolin lived in Iowa City, Iowa. Thereafter he moved to Connecticut. He now resides at Springdale, Connecticut. He opened a savings account (No. 128082) in the name of himself 'or Shirlee J. Smolin, payable to either or survivor' in the Stamford Savings Bank, Stamford, Connecticut. A photostatic copy of this account, which is in the record, shows a balance of $9,973.12 as of January 2, 1959. From January 5, 1959 to September 6, 1960, there was 25 separate deposits in the account ranging from $54.07 to $684.05. There was one deposit, on January 4, 1960, in the amount of $184.05. During the period mentioned there were four withdrawals: $2400.00 on January 22, 1959, $250.00 on May 14, 1959, $970.00 on May 19, 1959 and $1000.00 on April 4, 1960. The balance on September 16, 1960 was $12,704.06. Interest of $205.16 was added on October 1, 1960 which gave a balance as of that date of $12,909.22. During this period there were credits for interest in addition to the $205.16 mentioned. These were $68.39 on April 1, 1959, $14.15 on October 1, 1959 and $188.70 on April 1, 1960. These interest payments indicate an interest rate on the basis of approximately 3% per annum. On October 3, 1960 there was a withdrawal of $5000.00 reducing the balance to $7,909.22. Smolin claims that during the twenty month period from January 2, 1960 through September 6, 1960 he accumulated $3,681.00 of retirement pay ($184.05 X 20) which was a part of the $5000.00 withdrawn from the Stamford account on October 3, 1960 to establish a new account (No. 60483) in First Fidelity in Baltimore. The signature card for Account No. 60483, signed by Smolin and Shirlee J. Smolin, gives their address as '82 Deep Spring Lane, Springdale, Conn.' and recites: 'Savings Share Account: Two Party Joint Trust, subject to order of either (with right of survivorship).' It then has the usual Maryland trust form 'Edwin M. Smolin in trust for himself and Shirlee J. Smolin' as joint owners, subject to the order of either, the balance at death of either to belong to the survivor. Then is recited 'The undersigned hereby apply for a savings share account' in First Fidelity '* * * in accordance with provisions and in the form provided for on the face and reverse sides hereof, subject to its Charter and By-laws, and amendments thereto, to the rules, regulations and laws governing said Association and subject also to the following: Each of the undersigned hereby authorizes the other to endorse and check or instrument payable to the order of the other or both and to present same for credit to this account.'

On the face and reverse sides appeared the following:

'This certifies that the above named is/are members of First Fidelity Savings & Loan Assn., Inc. This certificate is issued and by acceptance hereof is held subject to all the provisions of the Charter and By-laws of the Association and the laws of the State of Maryland and is transferable on the books of the undersigned (First Fidelity) by the holder hereof in person or by duly authorized attorney upon surrender of this certificate properly endorsed. The undersigned (First Fidelity) may treat the holder of record in the manner in which membership was made as the owner for all purposes, without being affected by any notices to the contrary, until this certificate, representing a preferred stock interest in the Association, is transferred on the books of the undersigned (First Fidelity). Certificates will not be transferred unless and until the transferee has made proper application for membership and has been accepted as a member of the undersigned' (First Fidelity).

Immediately under this statement appears: 'Savings Department. Savings invested here are intelligently and economically managed and are profitably employed to earn generous dividends for you. Regular savings promote the thrift habit, enabling you to reach financial independence or any goal you set * * *.' Under the heading 'Dividends' appears: 'Dividends are credited semi-annually, June 30 and December 31. Deposits made on or before the 20th of each month receive credit for the entire month when left to the end of the dividend period.' There also appears a form of 'Transfer of Share Account and Membership' which recites that 'For value received the undersigned hereby sells, assigns and transfers to _____ the share account on the books of said association.' Then there are blanks for the date, signature and witnesses followed by 'The undersigned is the transferee of the share account represented by the within certificate and has executed application for membership and signature card.' Then follows a blank for the signature of the transferee with a notation 'Transfer entered of record _____ 19__.' (All emphasis supplied.)

A transcript of Account 60483 in First Fidelity is in the record. Under 'Name' appears 'Smolin, Edwin M. or Shirlee J.' The original deposit is for $5000.00, dated as of July 22, 1960. There are two dividend credits of $125.00 and $128.12 respectively on October 2, 1961. There is also a dividend credit of $137.27 as of January 5, 1962. In addition to the original deposit of $5000.00 there were 12 deposits between October 2, 1961 and May 14, 1962 ranging in amount from $65.30 to $351.95. On November 3, 1961, there was a deposit of $184.05. The balance as of May 14, 1962 was $8,049.73. There was a deposit of $329.28 as of June 12, 1962, but as the conservator took over the assets of First Fidelity on June 2, 1962, this deposit was apparently returned, leaving the final balance $8,049.73. Other than this return of the deposit of June 12, 1962, there were no withdrawals of any kind from the First Fidelity account. The dividends credited indicate a dividend rate of 5% on an annual basis.

Smolin claims that beginning with the $184.05 deposit on November 3, 1961, and for the six months thereafter to and including May 3, 1962 (a total of seven months), the subsequent deposits all being in excess of $184.05 represent deposits by him by mail of his monthly disability payments of $184.05, a total of $1288.35, which, with the amount of $3687.00 claimed as included in the original deposit of $5000.00 from the Stamford account, represents a total of $4969.35 claimed as deposited veteran disability payments. No duplicate deposit slips from either the Stamford Savings Bank or from First Fidelity are in the record. We will assume for the purposes of this case, but without deciding, that Smolin has traced the monthly disability payments of $184.05 for which he claims priority, into Account No. 60483.

Smolin claims the right to priority of payment by the conservator (now receiver) of First Fidelity of $4969.35 of the balance of Account No. 60483 of $8,049.73 by virtue of the Act of Congress of August 12, 1935, c. 510, section 3, 49 Stat. 609, codified as 38 U.S.C. § 3101(a), which provides in pertinent part:

'Payments of benefits due or to become due under any law administered by the Veterans' Administration shall not be assignable except to the extent specifically authorized by law, and such payments made to, or on account of, a beneficiary shall be exempt from taxation, shall be exempt from the claim of creditors, and shall not be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, either before or after receipt by the beneficiary. The preceding sentence shall not apply to claims of the United States arising under such laws nor shall the exemption therein contained as to taxation extend to any property purchased in part or wholly out of such payments.'

The Act of August 12, 1935, c. 510, repealed two earlier Acts on the same subject. In effect this consolidated the two earlier Acts and added the phrase 'either before or after receipt by the beneficiary.'

The earlier Acts on the same subject were:

1) Act of March 3, 1873, c. 234, s. 33, 17 Stat. 575 (Revised Statutes 4747, par. 4) which provided:

'No sum of money due, or to become due, to any pensioner, shall be liable to attachment, levy, or seizure by or under any legal or equitable process whatever, whether the same remains with the Pension Office, or any officer or agent thereof, or is in course of transmission to the pensioner entitled thereto, but shall inure wholly to the benefit of such pensioner.'

2) World War Veterans Act of June 7, 1924, c. 320, s. 22, 43 Stat. 613, which provided:

'That the compensation, insurance, and maintenance allowance payable under Titles II, III, and IV, respectively, shall not be assignable; shall not be subject to the claims of creditors of...