Travers v. Reid

• Decision Date: 07 February 1936
• Citation: 182 A. 908
• Parties: TRAVERS v. REID et al.
• Court: New Jersey Court of Chancery

182 A. 908

TRAVERS

v. REID et al.

Court of Chancery of New Jersey.

Feb. 7, 1936.

Syllabus by the Court.

1. The mere deposit of moneys in bank to the credit of one "in trust for" another constitutes neither a valid gift nor a valid declaration of trust.

2. The requirements of a valid voluntary declaration of trust are the same as the requirements of a valid gift inter vivos.

3. Neither chapter 40, 41, 42, nor 43, pp. 59, 60, 62, 63, P.L.1932 (N.J.St.Annual 1932, §§ 184-26, 17-43g et seq., 221-32 et seq.), alters the legal requirements of either a gift inter vivos or a valid trust.

Suit by Jennie Travers, executrix of the last will and testament of Christopher Reid, deceased, against Vincent Reid, guardian of Joseph Jennings, and another. On motion to strike the bill of complaint.

Motion denied.

Abraham M. Herman, of Orange, for the motion.

Meyer M. Semel, of Newark, opposed,

BERRY, Vice Chancellor.

The motion is to strike the bill for want of equity and on the further ground that on the facts stated in the bill the fund referred to is the property of the ward of the guardian defendant or is held in trust for him.

The facts alleged in the bill of complaint, and which must be taken as admitted on this motion, are that on April 15, 1929, Christopher Reid opened a bank account in his own name in the West Side Trust Company and made numerous deposits and withdrawals between that time and the date of his death on August 26, 1934. On August 19, 1933, at his request, the account was changed to the name of "Christopher Reid, in trust for Joseph Jennings." The passbook for said account was retained by Christopher Reid until his death. Between August 19, 1933, and the date of his death he made seven deposits in said account and three withdrawals therefrom; the last withdrawal being made twenty-four days before his death, at which time the balance was $496.51.

Joseph Jennings is a minor, for whom the defendant Vincent Reid was appointed guardian on March 5, 1935. The complainant, Jennie Travers, is both executrix and residuary legatee under the will of Christopher Reid. That will was dated June 25, 1933, and a codicil is dated August 14, 1934. By that codicil, substantial changes were made in the original will, and the bequest of $100 to Joseph Jennings was increased to $500. The complainant claims the fund as part of the assets of her decedent's estate, and the defendant guardian also claims to be entitled to receive the fund on behalf of his ward.

At the outset, the question of jurisdiction arises. In Scudder v. Trenton Savings Fund Society, 58 N.J.Eq. 154, 43 A. 3, on a bill filed by the administrator of W. P. S. to collect a deposit in the name of "W. P. S. Surrogate," there being no other claimant, Vice Chancellor Bird, while expressing the opinion that the administrator had the right to withdraw the funds, held that he was unable to advise a decree to that effect because of "the absence of any feature in the complainant's claim sufficient to confer jurisdiction upon a court of equity" and dismissed the bill, apparently upon the ground that, the relation between the depositor and the bank being that of creditor and debtor, the remedy at law was complete. But there are numerous reported cases in which this court has disposed of conflicting claims to bank deposits on bill by one of the claimants or the depositary bank itself. Nicklas v. Parker, 69 N.J.Eq. 743, 61 A. 267, affirmed 71 N.J.Eq. 777, 61 A. 267, 71 A. 1135, 14 Ann.Cas. 92; McCullough v. Forrest, 84 N. J.Eq. 101, 92 A. 595; Jefferson Trust Company v. Hoboken Trust Company, 107 N.J. Eq. 310, 152 A. 374; Johnson, Administrator, v. Savings Investment & Trust Company, 107 N.J.Eq. 547, 153 A. 382; In re Farrell's Estate, 110 N.J.Eq. 260, 159 A. 617; Long Branch Banking Company v. Winter, 112 N.J.Eq. 218, 163 A. 903; Hudson Trust Company v. Holt, 115 N.J.Eq. 34, 169 A. 516.

In Nicklas v. Parker, supra, the bill was filed by the administrator and, by answer and cross-bill filed by the bank, the cause was converted into one of interpleader.

Jefferson Trust Company v. Hoboken Trust Company was an interpleader suit, as was also Long Branch Banking Company v. Winter. Hudson Trust Company v. Holt was a bill by executors for instructions, but Johnson, Administrator, v. Savings Investment & Trust Company was apparently similar to the present action, and there would seem to be no good reason why, where there are conflicting claims to a bank deposit, an executor claimant should await the will or whim of the bank to implead the claimants; and the procedure by direct bill by the executor avoids circuity of action and multifarious suits at law. Although the relation of debtor and creditor existed between the bank and the deceased depositor, a suit at law by the executor against the bank, while it would undoubtedly result in a judgment in favor of the executor (Scudder v. Trenton Savings Fund Society, supra; Boone v. Citizens' Savings Bank, 84 N.Y. 83, 38 Am.Rep. 498) would not dispose of the claim of the defendant guardian. It is the undoubted duty of the executor to collect all of the assets of his decedent's estate. Hayes v. Hayes, 45 N.J.Eq. 461, 17 A. 634, affirmed Hayes v. Berdan, 47 N.J. Eq. 567, 21 A. 339; 23 Corpus Juris, 1189, § 423. And if, as a result of a suit at law, the bank paid the amount of the deposit to the executor, he would take it cum onere— subject to the trust, if any. The jurisdiction of courts of equity in matters touching the administration of estates of decedents is ancient, and owes its origin to the undoubted jurisdiction over matters of trust. 1 Maddock's Chancery Practice, 466; Willard's Equity Jurisprudence, 561; 1 Story's Equity Jurisprudence, 532, 533.

As already stated, the motion to strike is based upon the contention that the deposit involved is either the property of the ward of the defendant guardian or held in trust for him; and in support of this contention counsel for this defendant invokes chapter 40, p. 59, P.L. 1932 (see N.J.St.Annual 1932, §§ 17-43g note, 184-26 note, 221-32 note), which is entitled "An Act concerning trust deposits in savings banks, trust companies and banks where other than the deposit in trust no other or further notice is given in writing of the existence and terms of the trust." The pertinent portion of that act is section 1, which reads as follows :

"1. Whenever any deposit shall be made with any savings bank, trust company or bank by any person in trust for another, and no other or further notice of the existence and terms of a legal and valid trust shall have been given in writing to the savings bank, trust company or bank, in the event of the death of the trustee, the same or any part thereof, together with the dividends or interest thereon, shall be paid to the person in trust for whom the said deposit was made, or to his or her legal representatives and the legal representatives of the deceased trustee shall not be entitled to the funds so deposited nor to the dividends or interest thereon notwithstanding that the funds so deposited may have been the property of the trustee; provided, that the person for whom the deposit was made, if a minor, shall not draw the same during his or her minority without the written consent of the legal representatives of said trustee." (Italics mine.) It is clear that, except for that act, the defendant guardian has no claim upon this fund. The transaction involved does not contain the elements of a gift inter vivos.

"Proof of a gift inter vivos must establish three things: (1) A donative intent on the part of the donor; (2) an actual delivery of the subject-matter of the gift; and (3) a stripping of the donor of all ownership and dominion over the subject-matter of the gift." Besson v. Stevens, 94 N.J.Eq. 549, 120 A. 640; Jones v. Westcott, 150 A. 50, 51, 8 N.J.Misc. 312.

Assuming such a gift was intended, the second and third elements are lacking, Cook v. Lum, 55 N.J.Law, 373, 375, 26 A. 803; Stevenson v. Earl, 65 N.J.Eq. 721, 55 A. 1091, 103 Am.St.Rep. 790, 1 Ann.Cas. 49; and, if the intent was merely to transmit the title to the fund on deposit upon the death of the donor, in effect a testamentary gift, it was invalid because not made in compliance with the requirements of the statute of wills (4 Comp.St. 1910, p. 5861 et seq, § 1 et seq.). An act essentially testamentary in character cannot be effectual except by compliance with the statute of wills. Stevenson v. Earl, supra, and Gordon v. Toler, 83 N.J.Eq. 25, 89 A. 1020. And, when it plainly appears that a revocable trust to take effect in enjoyment at the death of the trustee was created in evasion of the statute of wills, equity will decline to enforce it. Dunn v. Houghton (N.J.Ch.) 51 A. 71. Nor can the transaction be considered as creating a trust for the benefit of the ward of the guardian defendant, as there are no circumstances other than the making of the deposit in the name of "Christopher Reid in trust for Joseph Jennings," indicating an intention to create such a trust. Nicklas v. Parker and Jefferson Trust Company v. Hoboken Trust Company, supra. "The elements by which is tested a voluntary declaration of trust as distinguished from a declaration made upon consideration are the same as the tests of a gift." In re Coyle's Estate, 154 A. 744, 745, 9 N.J.Misc. 158, citing Nicklas v. Parker, supra.

The facts in the instant case come squarely within the decision of Vice Chancellor Garrison in Nicklas v. Parker, supra, affirmed by ...