Macy v. Williams — 90 N.Y. Sup. Ct. 243

Majority

p. 243

John W. Macy, as Trustee, etc., for Alfred E. Hildick, Appellant, v. David T. Williams and Another, as Executors, etc., of Benjamin L. Guion, Deceased, Respondents. John W. Macy, as Trustee for Martha A. Guion, Appellant, v. Same, Respondents. John W. Macy, as Trustee for Julia D. Hildick, Appellant, v. Same, Respondents.

Headnote

Deposit in a savings bank by one person “in trust" for another — when a trust is not created thereby — evidence constituting the res gestee —- competent 'to show the real motive of the depositor'.

Money was deposited in a savings bank by a person in his own name in trust for other designated persons, who did not know of the existence of such bank accounts until after the death of the person máking such deposits, and the pass books containing the entries of such deposits were not delivered to the persons designated therein, but always remained in the possession of the depositor.

Releí, that such deposits, unexplained, constituted a trust in favor of the designated persons.

The character, however, of such transaction is not conclusively established by the mere fact of the deposits in the savings bank, so as to preclude evidence

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of contemporaneous facts and circumstances, constituting the res gesta, to show that the real motive of the depositor was not to create a trust, but to accomplish some independent and different purpose inconsistent with an intention to divest himself of the beneficial ownership of the fund.

Appeal by the plaintiff, John W. Macy, as trustee, etc., for Alfred E. Hildick, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of Kings on the 17th day of January, 1893, upon the report of a referee dismissing the plaintiff’s complaint, and also from an order made at the Kings County Special Term and entered in said clerk’s office on the 28th day of January, 1892, granting the defendants’ motion for a reargument of their motion for an extra allowance, vacating and setting aside the order denying the defendants’ motion for an extra allowance, and granting the defendants an extra allowance.

Appeal by the plaintiff, John W. Macy, as trustee, etc., for Martha A. Guión, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of Kings on the 17th day of January, 1893, upon the report of a referee dismissing the plaintiff’s complaint, and also from an order made at the Kings County Special Term and entered in said clerk’s office on the 9th day of June, 1892, granting the defendants’ motion for an extra allowance.

Appeal by the plaintiff, John W. Macy, as trustee, etc., for Julia D. Hildick, from an order of the Supreme Court, made at the Kings County Special Term and entered in said clerk’s office on the 28th day of January, 1892, granting the'defendants’ motion for a reargument of their motion for an extra allowance, vacating and setting aside the order granting the defendants’ motion for an extra allowance, and granting the defendants an extra allowance.

Charles W. Judson, for the appellants.

W. W. Buckley, for the respondents.

These are appeals from the judgments entered in the first two above-entitled actions upon the report of a referee dismissing the complaint of the plaintiff in each case, with costs, and also from three

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orders granting an extra allowance to the defendants in each action. The complaint in each case alleges that the testator of the defendant Benjamin L. Guión had in his possession large sums of money, upwards of $10,000 in the M. A. Guión case, and upwards of $1,000 in the Hildick case; that Guión died, leaving such trust incomplete and unperformed; that the plaintiff had been appointed trustee in the place and stead of B. L. Guión, by order of the Supreme Court, and prayed that the defendants, as executors of Gxxion, account for the trust funds held by him during his lifetime, and pay the same to the plaintiff. The answer in all three cases contains a general denial, and alleges payment of all moneys and property in Guion’s hands, as a part of the alleged trust, and also that the plaintiff is not the real party in interest. The answer also sets up the six years Statute of Limitations in all three cases, and the ten years statute in the M. A. Guión and J. H. Hildick cases.

On the trial in the M. A. Guión case, it was proved by the plaintiff that B. L. Guión opened an account ixx the Manhattan Savings Institution on the 5th day of Juxxe, 1867, in fonn B. L. Gxxioxx for M. A. Guión, and xnade vax-ious deposits therein, amounting in all, with interest, to $9,395.27;.tlxat Guión drew out of said account all of said moxxeys ixx different axnouxxts, on differexxt days, aixd the plaintiff claims the whole axnoxxxxt of the account with interest oxx the amount of each draft from the date thereof. The plaintiff further proved that B. L. Guión opened axx account in the East Diver Savings Institutioxx oxx the 4th day of January, 1870, in foxux B. L. Guión in trust for M. A. Gxxion, aixd xnade vax-ious deposits therein; that such accoxxxxt was closed on the 2d day of April, 1877, and the balance of the accoxxxxt, amoxxnting to nineteexx dollars and twenty-nine cexxts, was traxxsferx’ed to a xxew account opened by B. L. Guión oxx that day, ixx the saxxxe bank, ixx fonn B. L. Guión in trust for M. A. Gxxion; that Gxxioxx drew out from those foregoing accounts the suxix of $23,111.78 in different amoxxnts oxx different days, and the plaintiff claixns the whole of those amounts with ixxtexest. The plaintiff further proved that B. L. Guioxx opened an accoxxnt in the Dry Dock Savings Ixxstitutioix oxx the 3d day of April, 1877, in form B. L. Guión in trust for M.

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days, and plaintiff claims tlie whole of those amounts. On the 16th day of July, 1883, B. L. Guión opened an account in the New York Bank in the form of B. L. Onion in trust for M. A. Ouion, and made deposits therein to thé amount of $2,597.04, no part of which was withdrawn by him.

The plaintiff further proved that Ouion had collected dividends on stocks which he held in trust for M. A. Ouion, amounting to $9,112.50, which plaintiff claims with interest.

The plaintiff further proved that B. L. -Ouion had received a check from Williams and Ouion for $2,502.91, drawn to the order of M. A. Ouion, but did not claim to recover this amount. The whole amount of the claim of the plaintiff in that action is upwards of $100,000.

After the death of B. L. Ouion, the East River, Dry Dock and New York Bank books were found in Mr. Ouion’s safe, and were delivered to or taken possession of by M. A. Guión, and the amounts remaining undrawn at Ouion’s death were afterwards drawn out by her, namely, $1,972.48 from the East River Bank, $797.59 from the Dry Dock Bank, and $2,597 from the New York Bank, making in all $5,367.21.

The plaintiff’s proof on the trial in the A. E. Ilildick case was that B. L. Ouion opened an account in the Dry Dock Savings Institution on the 3d day of July, 1879, in form B. L. Ouion in trust for A. E. ITildick, and made various deposits therein; that Ouion drew out of that account the sum of $1,045 in different amounts on different days, and the plaintiff claims to recover the whole of that amount.

The plaintiff further proved that B. L. Ouion opened an account in the East River Savings Institution on the 22d day of December, 1879, in form B. L. Guión in trust for A. E. Ilildick, and made various .deposits therein, and Ouion drew out of that account the sum of $1,850, in different amounts on different days, which the plaintiff claims to recover.

On the 4th day of January, 1886, Ouion opened an account in the New York Bank, in form B. L. Ouion in trust for A.

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Mrs. J. B. Hildick, the mother of A. E. Hildick, and the amounts remaining and not drawn out at Guion’s death were afterwards drawn out by A. E. Hildick: $174.44 from the East Biver Bank, $597.50 from the New York Bank, $387.04 from the Dry Dock Bank; in all $1,158.98.

The plaintiff produced no evidence of any declaration of trust respecting any of the savings bank books other than the form of the bank books themselves. There is nothing to indicate Mr. Guion’s intention in opening the accounts in the way he did, and the plaintiff’s only evidence of the existence of the trust is the bank books, in form “in trust.” Neither M. A. Guión nor A. E. Hildick knew of these bank accounts, until after Guion’s death, and the books had not been delivered to them or to any one else, but had always remained in Guion’s possession. All the money depositéd in the savings bank belonged to B. L. Guión.

In the case of Martin v. Funk ( 75 N. Y. 134 ) it was decided by the Court of Appeals that such a deposit unexplained constituted a trust, but in the same case it was said, “It is not necessary to decide that surrounding circumstances may not be shown to vary or explain the apparent character of the acts, and the intent with which they were done.” In the subsequent case of Mabie v. Bailey ( 95 N. Y. 206 ) Judge Andrews says, in delivering the opinion of the Court of Appeals: “ The court in Martin v. Funk left undecided the point whether in respect to such a transaction ‘ surrounding circumstances may not be shown to vary1 or explain the apparent character of the acts, and the intent with which they were done.’

“ If it was now necessary to decide that point, I should incline to the opinion that the character of such a transaction as creating a trust is not conclusively established by the mere fact of the deposit so as to preclude evidence of contemporaneous facts and circumstances constituting res gestee, to show that the real motive of the depositor was not to create a trust, but to accomplish some independent and different purpose inconsistent with an intention to divest himself of the beneficial ownership of the fund.”

While, therefore, the opening of the accounts by Guión in the different banks in the names he did, constituted a trust without explanation, it becomes necessary to ascertain whether the facts and circumstances surrounding the transaction disclose a motive on the part of

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Guión to create a trust in favor of the several persons named in the bank books as beneficiaries, or whether his real motive was to accomplish an independent and different purpose, inconsistent with the intention to divest himself of the ownership of the property.

A preliminary statement of certain facts and circumstances will conduce to a better understanding of the situation. B, L. Guión died in March, 1887, leaving a last will and testament, and the defendants in these actions qualified as executors thereof.

In June, 1887, the executors opened the safe of Guión in the Stuyvesant Safe Deposit Company, and among other property found there were eighteen savings bank books, one in the name of B. L. Guión personally; two, Mrs. J. D. Hildick; four, Mrs. J. D. Hildick, in form in trust for her two children, Alfred E. and Eleanor Hildick; two, B. L. Guión, in form in trust for M. A. Guión; three, B. L. Guión, in form in trust for A. E. Hildick ; three, B. L. Guión, in form in trust for E. Hildick; one, B. L. Guión, in form in trust for H. Hunt; one, B. L. Guión, in form in trust for Mary G. Hunt; one, B. L. Guión, in form in trust, for Isaac M. Hunt. Mrs. Guión took possession of the two books in form in trust for herself. Mrs. Hildick took possession of the twelve books in her own name individually, or in form in trust for her children, and Isaac M. Hunt took the books in form in trust for himself and Mary G. Hunt and II. Hunt, who were his .sisters.

Benjamin L. Guión, the defendant’s testator, died in March, 1887, at the age of eighty-two years.' Eor upwards of twenty years before his death he had not been engaged in business other than investing and taking care of his money and stock speculations. He lived on the income of his money without any business. He deposited his money in savings banks in almost all cases in form in trust for other persons related to him by blood or marriage. At least twenty-seven of the accounts opened by Guión in form in trust were so opened without the knowledge or consent of the persons whose name Guión used, and the anoneys belonged to Guión in each case. He treated the accounts absolutely as his own, withdrawing funds from each account and making new deposits therein from time to time, and in most cases closing the accounts. The persons whose names Guión used never saw or heard of the accounts until after his death, and some of them not until the books

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were offered in evidence on the trial. The total amount of deposits made by Guión, with interest, amounts to upwards of $80,000, in the accounts in form in trust and only $26,000 in his personal account. These acts are very significant; they show the line of conduct adopted by Guión when he intended to create a trust. He did not retain the bank books in his possession, but delivered them to the beneficiaries and informed them that the account was opened for them. He neither deposited in that account thereafter, nor drew •any money therefrom. In all the other accounts he continued his deposits and withdrawals, closed up many of the accounts and surrendered the bank books to the banks, without communicating with .any of the persons whose names lie used; he treated the money and the books as his own. It is inconceivable that Guión intended to •divest himself of the beneficial ownership of his property, as he was dependent upon his income for the support of himself and his wife, and had not been in business for upwards of twenty years before his death. To hold that his intention was to create trusts by the deposit in the savings banks is to hold that he deliberately not only stripped himself of all means of support, but also rendered himself liable for much more money than he ever had. Yet Guión is eon■eeded by all to have been a man of sound business and financial ability, good sense, high moral character and unquestioned integrity. The memorandum found in Guion’s safe after his death to the effect that the bank books belonged to those in whose names they stood, falls far short of repelling the natural inference to be drawn from all the other facts and circumstances in the case. In the case of Beaver v. Beaver (117 N. Y., at page 430) Judge Andrews, in delivering the opinion of the Court of Appeals, said this: “ We -cannot close our eyes to the well-known practice of persons depositing in savings banks money to the credit of real or fictitious persons, with no intention of divesting themselves of ownership. It is attributable to various reasons; reasons connected with taxation, rules of the bank limiting the amount which any one individual may keep on deposit, the desire to obtain high rates of interest where there is a discrimination based on the amount of deposits, and the desire on the part of many persons to veil or conceal from others knowledge of their pecuniary condition.

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In most cases where a deposit of this character is made as a gift, there are contemporaneous facts or subsequent declarations by which the intention can be established independently of the form of the deposit. We are inclined to think that to infer a gift from the form of the deposit alone would, in the great majority of cases, and especially where the deposit was of any considerable amount, impute an intention which never existed, and- defeat the real purpose of the depositor.”

The foregoing remarks are peculiarly applicable to this case, and -.in our view the facts and circumstances disclosed repel the presumption of any intention to create a trust.

We think the referee reached a correct conclusion, and the judgments in both cases should be affirmed, with costs.

The three orders for additional allowance should be affirmed, with ten dollars costs in one case only, beside disbursements.

Brown, P. J., and Cullen, J., concurred.

In the first two above-entitled actions judgment affirmed, with costs, and in the three above-entitled actions the order affirmed, with costs.

Cases cited

Martin v. Funk 75 N. Y. 134 N.Y. 1878-11-12 p. 247
Mabie v. Bailey 95 N. Y. 206 N.Y. 1884-02-26 p. 247