Varley v. Sims
| Decision Date | 15 March 1907 |
| Docket Number | 15,016 - (157) |
| Citation | 111 N.W. 269,100 Minn. 331 |
| Parties | HARRY C. VARLEY v. THOMAS W. SIMS |
| Court | Minnesota Supreme Court |
Appeal by defendant, as administrator of the estate of Jessie L Brown, deceased, from a judgment of the district court for Itasca county, entered pursuant to the findings and order of Spooner, J. Affirmed.
Gift -- Check on Bank.
A check on a bank for the entire amount of the drawer's credit therein, delivered to a person as a gift of the money, though unaccepted by the bank, operates as an assignment of the fund; and if so delivered and intended by the donor, in anticipation of death from an impending peril from which he subsequently dies, it is valid as a gift causa mortis.
Gift.
It is unnecessary that the check disclose on its face that it covers the entire bank credit. That fact may be shown dehors the instrument.
Gift -- Delivery.
The delivery of a check as a gift causa mortis to a person other than the donee, but for his use and benefit, and with instructions to deliver the same to the donee, is a sufficient delivery to pass title, though it does not reach the hands of the donee until after the donor's death.
Gift -- Presumption.
The person to whom the delivery is made is presumed, in the absence of a contrary showing, to be the trustee of the donee.
Presumption of Acceptance.
Where a gift causa mortis is beneficial to the donee and imposes no burdens upon him, acceptance by him is presumed as a matter of law.
George H. Spear, for appellant.
Things in action in which the donor himself is the debtor party, cannot be the subject-matter of a valid gift. 3 Pomeroy, Eq. § 1148.
An unaccepted check drawn in the ordinary form does not of itself operate as an assignment, though supported by a consideration. 2 Am. & Eng. Enc. (2d Ed.) 1065, and cases cited; 4 Cyc. 50, 51, and cases cited in note 58; Chapman v. White, 6 N.Y. 412, 417; Florence Mining Co. v. Brown, 124 U.S. 385; Hopkinson v. Forster, L.R. 19 Eq. 74; Duncan v. Berlin, 60 N.Y. 151; O'Connor v. Bank, 124 N.Y. 324; First Nat. Bank v. Clark, 134 N.Y. 368; Pullen v. Placer, 138 Cal. 169; Rose's Notes under Florence Mining Co. v. Brown, 124 U.S. 385. A check does not become effective as an assignment even when drawn for the full amount of a fund, unless the fund be specified. The check remains "the debtor's own naked executory promise to pay." Harrison v. Wright, 100 Ind. 515; 4 Cyc. 53, and cases; Attorney-General v. Continental, 71 N.Y. 325; First Nat. Bank v. Clark, supra. Unless the money is obtained before the death of the donor the delivery of the check is not a valid gift mortis causa. In re Smither, 30 Hun, 632.
The donor's check in the instant case being a "naked executory promise" does not constitute a valid gift causa mortis. 20 Cyc. 1240-1241; 14 Am. & Eng. Enc. (2d Ed.) 1063, and cases cited; Thresher v. Dyer, 69 Conn. 404; McKenzie v. Downing, 25 Ga. 669; Gerry v. Howe, 130 Mass. 350; Second Nat. Bank v. Williams, 13 Mich. 282; In re Smither, supra; Simmons v. Cincinnati, 31 Oh. St. 457; Rhodes v. Childs, 64 Pa. St. 18; Pullen v. Placer, supra; Appeal of Waynesburg College, 111 Pa. St. 130, 132; Hewitt v. Kaye, 6 L.R. Eq. 198; Thornton, Gifts & Adv. 301. The decedent's check was not given for a valuable consideration; the respondent, therefore, was not a holder for value. 2 Daniel, Neg. Inst. § 1618b. The death of the drawer revoked the authority of the bank to pay the check. Morse, Banks & Banking, 260; Thompson, Bills, 244.
The view that a check does not operate as an assignment has been unanimously adopted by the courts of England, and the vast weight of American authority is also to be found in full accord with this rule. Note to Hemphill v. Yerkes 19 Am. St. 609.
The validity of a gift causa mortis is determined by the law of the place where made. 20 Cyc. 1243, note 67; Emery v. Clough, 63 N.H. 552; McCraw v. Edwards, 41 N.C. 202. The check in question was drawn in Wisconsin. There is no case in Wisconsin which holds that a check works an assignment of the deposit when it is not given for a valuable consideration. The question of assignment of funds to the amount of the check is original in Minnesota, but inferentially it has been answered in the negative. Northern Trust Co. v. Rogers, 60 Minn. 208.
Alfred L. Thwing, for respondent.
There may have been such a prior agreement express or implied, to accept on the part of the drawee in an ordinary bill of exchange as will be equivalent to acceptance by him, after it is drawn. Woodard v. Griffiths-Marshal, 43 Minn. 260; Mandeville v. Welch, 5 Wheat. 277, 286. It is the universal understanding between banks and depositors, arising from the customs of trade, that the check of the latter is to be paid upon presentment. 2 Daniel, Neg. Inst. § 1638; National Bank v. Insurance Co., 104 U.S. 54. The implied promise of the bank to its depositor is to pay the sum deposited in any number of instalments to third persons designated by the depositor. A check is different in this respect from an ordinary bill of exchange. 2 Daniel, Neg. Inst. § 1640; Loan & Savings Bank v. Farmers, 63 Cent. L.J. 451, 455, note; Munn v. Burch, 25 Ill. 35; Fourth Nat. Bank v. City Nat. Bank, 68 Ill. 398, 402; Gage v. Union, 171 Ill. 531; Fogarties v. Bank, 12 Rich. L. 518; Simmons v. Bank, 41 S.C. 177; Lester v. Given, 8 Bush, 357; Farmers v. Newland, 97 Ky. 464; Gordon v. Muchler, 34 La. An. 614; Fonner v. Smith, 31 Neb. 107; Moline v. Fuehring, 60 Neb. 316; In re Brown, 2 Story, 502; Roberts v. Corbin, 26 Iowa 315; May v. Jones, 87 Iowa 188; Turner v. Hot Springs, 18 S.D. 101; Raesser v. National, 112 Wis. 591; 2 Morse, Banks & Banking, §§ 491, 511; dissenting opinions in Pullen v. Placer, 138 Cal. 199; National v. Eliot, 5 Am. L. Reg. 711.
It is well settled in this state and elsewhere that, as between the drawer of the check and the holder for value, the assignment is complete upon delivery, and the drawer has no right to stop payment without cause. Security Bank v. N.W. Fuel Co., 58 Minn. 141; Pease v. Landauer, 63 Wis. 20; Risely v. Phenix, 83 N.Y. 318, 328; National v. McLoon, 73 Me. 498; Pope v. Huth, 14 Cal. 404, 407; Bell v. Alexander, 21 Gratt. 1, 6; German Savings Inst. v. Adae, 8 F. 106; In re Brown, supra.
A great many cases asserting the general principle that an unaccepted check does not amount to an assignment should properly have been disposed of on the ground that the drawee may assert against the payee the equities which would be valid against the drawer. Bank v. Brewing Co., 50 Oh. St. 151; Northern Trust Co. v. Rogers, 60 Minn. 208; Industrial v. Weakley, 103 Ala. 458.
Checks used out of a book given to the depositor by the bank on receiving an open deposit are necessarily presumed by it to be drawn upon that fund or account. There is a well recognized distinction between a check and an ordinary draft or bill of exchange. Bull v. Bank of Kasson, 123 U.S. 105; Exchange v. Sutton, 78 Md. 577; Harrison v. Nicollet Nat. Bank, 41 Minn. 488; 1 Morse, Banks & Banking (3d Ed.) § 378, et seq. The check involved was drawn for the exact amount of the deposit. Some courts holding that a check for less than the full amount does not amount to an assignment pro tanto hold that a check for the exact amount constitutes an assignment of the debt due from the bank to the depositor. Hawes v. Blackwell, 107 N.C. 196; Walker v. Mauro, 18 Mo. 564; Muth v. St. Louis, 77 Mo.App. 493.
Choses in action may be delivered by transfer of the most effectual means of reducing them to possession, such as the writing representing the chose, if present and capable of delivery. Allen-West Commission Co. v. Grumbles, 129 F. 287; Johnson v. Colley 99 Am. St. 908, 909, note and cases cited; Bond v. Bean, 72 N.H. 444. A valid gift causa mortis may be made of a special fund or deposit in a bank by delivery of the donor's check on same. The check may be delivered to a third person and need not reach the donee until after the maker's death. Whitehouse v. Whitehouse, 90 Me. 468; Dickenson v. Hoes, 84 N.Y.S. 152. Acceptance by the drawee is not necessary. Rolls v. Pearce, L.R. 5 Ch. Div. 730; 1 Daniel, Neg. Inst. § 26. A gift is valid even though the check is not presented until after the donor's death. Phinney v. State, 36 Wash. 236; In re Taylor's Estate, 154 Pa. St. 183. In the case at bar the donee was not prevented from reducing the chose to possession before the donor's death.
The facts in this case are as follows: On November 29, 1904, Mrs C. H. Brown, the mother of plaintiff, had on deposit in the First National Bank of Grand Rapids, this state, subject to check, the sum of $1,168.30. She was on that date at the home of her sister, a Mrs. Wright, at West Allis, Wisconsin, and about to undergo a serious surgical operation. In view of the operation and the probability of death resulting therefrom, she drew her check on the Grand Rapids bank for the entire amount of her deposit therein, payable absolutely to plaintiff, and left the same with Mrs. Wright, instructing her to deliver it to plaintiff, who was not then present, in the event the operation resulted fatally. She also stated to her sister that, if she survived the operation, the check should be returned to her. Thereafter the operation was performed, and Mrs. Brown never regained consciousness, but died. Plaintiff was notified of the facts, but was unable to reach his mother before her death, and the check was not delivered to him until after that event. He subsequently presented it to the bank, but payment was refused. Defendant was appointed administrator of Mrs. Brown's estate, and the bank paid the money to him. Plaintiff thereafter brought this action to recover the same from the administrator,...
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