Beaver v. Beaver

The Court of Appeals, when this case was before it, seems to have taken judicial notice of a practice that persons deposit money-in savings banks “to the credit of real or fictitious persons with no intention of divesting themselves of ownership.” If such a practice exist, we find no proof of its existence in this case. No testimony was given showing suph a practice, and no reason is shown why John O. Beaver should have had any of the tricky objects in view which are mentioned by the Court of Appeals. The charter of the bank permitted deposits to the amount of $5,000. (Laws of 1851, chap. 152, § 6.) And it does not appear that John O. Beaver’s deposits had previously approached that sum. And since there might have been the laudable motive of parental affection, we do not see why a less praiseworthy motive should be assumed. The ■application to the bank to receive the deposit was in the name of Asahel G. The request in the application was to receive the money from him and to open an account with him. It states his age, place of birth and residence. Testimony was given showing that it is the custom for the person who brings the money to sign the application. Hence John O. signed the application, although it was made in behalf of Asahel G. The signature of John O. would be properly made by him as natural guardian of his son. The additional proof given on the second trial clearly establishes that John O. intended to give this money to Asahel G., as is found by the learned justice. We are relieved, therefore, from the necessity of attributing to him any of those evil intentions, such as evading rules of the bank or escaping taxation, which the Court of Appeals seems to suppose prevail “in the great majority of cases.” And the ground that there was no evidence of a gift, held by that court' in the former trial, no longer exists. We know now, by positive proof, what was the intention of John O. when he caused this money to be deposited to the credit and for the benefit of Asahel G. Starting, then, with the fact that John O. intended to give this money to Asahel G., we must inquire whether any rules of law compel us to defeat this lawful intention. And we must observe that the intention was not to make a future gift, but to give at that time. It is found by the learned justice that the moneys were deposited by John O. with intent to pass the title to Asahel. The words “payable to John O.

The only objection is that John O. did not deliver to Asahel Gr. the pass-book.

In Martin v. Funk ( 75 N. Y., 134 ) the donor deposited money in a savings bank in her own name, adding the words “ in trust for L. W.” The donor retained the pass-book until her death, and the donee was not notified of the gift until after that event. In an action for the money by the donee (or cestui que trust) against the bank, she recovered. That case settled, first, that notice of the gift was not necessary; second, that retention of the pass-book in that case, and in similar-cases, did not prevent the gift from taking effect.

It appears, too, by that case, and by the similar cases of Willis v. Smyth ( 91 N. Y., 297 ); Mabie v. Bailey (95 id., 206); Scott v. Harbeck ( 49 Hun, 292 ), that the trust in such cases is treated ás what is sometimes called a passive trust. For the cestui que. trust is allowed to recover the trust funds; so that the so-called cestui que trust is held to be, at least after the decease of the donor, the absolute legal owner. Of course, if there were an active trust, the cestui que trust would not have the legal title. And on the death of the trustee, under the present statute, the property would not go to his personal representatives, but to the court to be managed by a new trustee. (Laws of 1882, chap. 185.) But in these cases, where the language of the deposit was as above stated, it has been held that the person for whom the deposit was' held in trust was entitled to recover 'it as legal owner. Therefore, the original transaction has been considered by the courts to be practically a gift by the donor to the person named as cestui que trust. And the transaction is described as a gift in Martin v. Funk. This is important, because it shows that the transaction is practically the ■same, whether the money is deposited in the name of the donee or in the name of the donor in trust for the donee.

What, then, is the reason why this mode of giving has been held to be effectual, notwithstanding the donor retained the book? Clearly this: The donor was, after the gift, the legal custodian of

Now, the principle thus settled in these cases is applicable here. Asahel G. was a minor. John O., as father, was natural guardian. He was entitled to the custody of this voucher for property belonging to his minor son. It is not meant by this that as such guardian he could dispose of the,property of his son. But it is plain that, in the absence of proof that any one else had been appointed guardian, he was the proper person to have the custody of this voucher. Let us suppose that Asahel G. had been only a year old, what could John O. have done with the pass book when, for the purpose of a. gift, he had deposited this money in Asahel’s name. Should he tie the book around the infant’s neck or fasten it to its apron string ? Plainly he could make no delivery of the book to a mere infant. Or if any other person had made the gift, would not such a person have delivered the book to the father of the infant ? To deliver the book to a mere infant would be folly. And the same principle must apply to a minor who is older. When the donee is a minor, younger or older, in the absence of any appointed guardian, the father must be the natural custodian of any such voucher.

There are cases in Massachusetts holding that an acceptance of a gift, or notice to the donee, is necessary to complete the gift. But in Gerrish v. New Bedford Institution for Savings ( 128 Mass., 151 ), it is pointed out that the decison in Martin v. Funk (ut supra).

It is sufficiently established in this case, and is so found, that John O., at the time of the deposit, made it “ with the purpose and ' intent that such moneys should thereafter be and remain the property of said Asahel Beaver.” It is proved (if proof were necessary) that it is very general for parents to bring money and deposit it in the-name of their minor children. So that the only question is whether the continued possession by John O., of the voucher, defeats his-intention as a matter of law. ■ „

If he had had this money deposited in his own name, adding the words “ in trust for Asahel G-. Beaver,” and had retained the voucher,, this would have been a valid gift to Asahel, though Asahel did not. know of the transaction. (Martin v. Funk.) It would have been said, John O. retained the voucher as trustee. Now, when, with the-same intent and purpose, he deposits the money absolutely in Asaliel’s name, and retains the voucher, it is argued this is no gift The distinction between the two cases is thin, very thin, when used to defeat the laudable intent of a father to give money to a minor-child. And if the distinction is sound, then a father cannot validly give money to his minor child by deposit in a savings bank except through the fiction of calling himself trustee. If the retention of the voucher in the Funk case was held to be in the character of a-trustee, why was not the retention by John O. in this case held to be in his character of guardian by nature, after his intention to-give the money has been proved as a fact. '

Of course, the great object -of requiring delivery is to mark the distinction between a mere intention to give, at some future time,, and a present act of giving. That was marked by the deposit in Asahel’s name, with the intent, now established by other proof, of making a gift. The consideration is love and affection. The transferís made by putting the money in the bank payable to Asahel, and to-no one else. The bank, by its rules, agrees to endeavor to prevent frauds and impositions, and yet declares that payments to a person presenting the book shall discharge the institution. But that rule does not authorize the bank negligently to pay to a person other than the one in whose name the account stands. (Appleby v. Erie County Savings Bank, 62 N. Y., 12 .) The courts have gone even

The case of Schoenwald v. Metropolitan Savings Bank ( 57 N. Y., 418 ), is referred to in the Smith case, above cited, and it is said that in that case the language of the contract was substantially different. Whether that case can stand against the decision of Smith v. BrooMyn Savings Bank we need not inquire. It is enough that the rules of the bank in the present case bring it within the later decision. And, under that decision, John O. could not, by virtue of possession of the pass-book, draw out any of this money. If the possession of the pass-book did not authorize him to draw the money, then such possession gave no control over the money, the thing given.

In Matter of Grawford ( 113 N. Y., 560 ) the deposit of money in a bank to the credit of another person was held to be a gift. As to the bonds in that case, they were coupon bonds, payable to bearer, and, therefore, passed by delivery. They had not been delivered, and the court say: “ Nothing appears in the case as to what was the effect of the so-called registry.”. And the registration had certainly no effect upon the coupons which remained still payable to bearer.

The pass-book in the present case was not negotiable paper, and the money entered on it was payable to no one but Asahel. And payment by the bank to Asahel, when of age (if not before; see the

It seems to us that this subject of the delivery of the gift was not so decided in the Court of Appeals that the remarks in the opinion are controlling on the new and most important facts presented on the second trial, viz., the intention of Jolm O. to make a present gift, and his intention that the money should become and remain the property of Asahel. Nothing was said as io the possibility of making an actual delivery of the voucher, and nothing as to the inability of John O. thereafter to draw out the money legally.

"We think, therefore, that the judgment should be reversed and a new trial granted, costs to abide event.

I think, on this trial, the' plaintiff has substantially overcome thé objection of the Court of Appeals in this case. (Reported 117 N. Y., 421 .) The ground assumed for a reversal in that case was that the plaintiff had failed to prove the intention on the part of John O. Beaver to make a gift to his son at the time of making the deposit in the bank, and that the retention of the bank-book by him was evidence of a want of delivery.

The court now, upon sufficient evidence, finds that it was the intention of John O. to make a gift of the money deposited at the time of the deposit, and I think that my Brother Learned has established most successfully and completely upon, principle and authority, that the retention, by the father, of the bank-book when the gift is made, or intended to be made, by him to his infant son, is as much an executed gift as if he had delivered the book to the son, or to some other person for the usé and benefit of the son. ITe being the natural guardian and custodian of the property of his infant son in the absence of any general guardian, could not defeat his own executed gift by retaining the bank-book.

(dissenting):

Upon the facts as now found, we think the trial court was obliged, by the opinion of the Court of Appeals upon its review of the

The learned counsel for the plaintiff now earnestly contends that because John O. Beaver intended, by making the deposit to the credit of Asahel, and did say that he had made a gift to him of the amount, that it should have been found, as a fact, that the gift was complete. There are cases, of which the early case of Orwngiae v. Arden (10 .Johns., 293), is one, in which the fact of delivery has been found, from the declarations of the donor, when the other evidence in the •case failed to show delivery. But, as we interpret the opinion of the Court of Appeals, the established fact of the non-delivery of the pass-book and the continued dominion of John O. Beaver over the deposit resulting from his form of making the deposit, his possession of the pass-book and the rules of the bank, which formed part of the contract of deposit, require the finding that there was no delivery of the subject of the gift. The effect of these facts is that the intent to deliver remained unperformed. The judgment must, therefore, be affirmed unless some error to the prejudice of the plaintiff occurred upon the trial. The burden rested upon the plaintiff'to show the delivery of the subject of the gift. Clearly so, after the particulars of the deposit had been shown by the cross-examination of her witnesses. Under the circumstances of this •case, it was needful to show the delivery by John to Asahel of the pass-book, or some equivalent act. So the Court of Appeals held. This tire plaintiff had not done and could not do. The defendants, however, called several witnesses whose testimony tended to show not only John O. Beaver’s occasional custody of the pass-book, but his continual custody of it. In view of the plaintiff’s failure to prove delivery of the pass-book, it cannot be important whether the defendant’s witnesses, who were unnecessarily called to establish the

Before the testimony of the widow of John O. Beaver was received she executed and delivered to Charles C. Beaver an assignment of all her interest in the subject-matter of the action. She thereby ceased to be “ a person interested in the event,” and as that was the only disqualification under which she rested its removal made her competent. This practice is open to abuse, but as it is authorized by authority we must recognize it. (Matter of W ilson, 103 N. Y., 374 ; Loder v. Whelpley, 111 id., 239.) It disposes of the objection to the testimony of Alice J. Beaver.

The judgment should be affirmed, with costs.

Judgment reversed, new trial granted, costs to abide event.