Opinion
July 25, 1941.
1. GIFTS: Parol: Delivery. There must be a delivery, actual or constructive, of a thing given with intent to relinquish all dominion thereof, by a donor to a donee to constitute an irrevocable gift inter vivos, the requirement of delivery being particularly applicable to parol gifts.
2. GIFTS: Parol: Evidence. To establish a gift inter vivos, asserted by the donee after the death of the donor, the evidence must be clear, cogent and convincing so as to leave no room for a reasonable doubt in the mind of the chancellor.
3. GIFTS: Evidence: Right of Payment to Donee. The right of a debtor to pay the debt to the donee is a factor entitled to consideration on the issue whether title to such debt has passed to the donee, but is not controlling.
4. GIFTS: Parol: Statements and Acts of Alleged Donor. Title to notes does not pass by reason of mere statements of the alleged donor indicating a gift. The deceased donor never parted with the possession of the notes, but placed them in his safe deposit box to which the donee was deputized to, but did not, enter, and her authority under this deputation terminated at the donor's death. The acts of the deceased donor in signing receipts addressed to the donee covering the delivery of bearer notes and his endorsement of the interest checks payable to the donee, in the light of his retention of the notes, his receiving the proceeds of the interest checks, and inferences that he must have presented the interest coupons for payment, and that he never told the donee of any gift, are not persuasive and convincing evidence of an irrevocable parol gift in praesenti from a husband to his wife.
5. GIFTS: Power of Revocation or Dominion. There is no legally consummated gift inter vivos where the donor reserves, either expressly or in the circumstances, the power of revocation or dominion over the subject of the gift.
6. GIFTS: Delivery and Acceptance. In order to constitute a valid gift of personal property it is essential that it be delivered by the donor to the donee, or someone for him, with the intention on the part of the donor to part with his right in and dominion over the subject of the gift, and that it be accepted by the donee, whose ownership must take effect immediately, leaving nothing essential to be done in the future.
7. GIFTS: Evidence. The following items point to there being no valid gift: the donor's memorandum prior to his death that he owned the notes; that when the notes were found in the donor's safe deposit box after his death and a witness stated that the notes belonged to the donee, she replied that she knew nothing about it; that as coexecutrix she filed various sworn documents listing the notes as assets of the donor's estate; that she had joined with the donor in a Federal tax return indicating no gifts. This and other evidence was inconsistent with a valid gift inter vivos in spite of verbal declarations of the deceased donor that his wife, the donee, owned the notes, and arrangements made by the donor, when the notes came in default, for the reorganization committee and the agency that thereafter operated as paying agent, to have the notes listed in the name of the donee.
8. TRUSTS: Requisites for Creation. Three things must concur to raise a trust: sufficient words to create it; a definite subject; and a definite object; and to these requisites may be added another, viz.: that the terms of the trust should be sufficiently declared. The declarations attributable to the testator tend to establish an intention to make a gift unconsummated in law at the time of his death. There were no declarations of a trust.
9. TRUSTS: Parol: Creation. Donors, not the courts, must create voluntary parol trusts, the same as testators must make their wills and living persons must make their contracts. Unexecuted or imperfect parol gifts of personality are not trusts, nor are executory parol promises for the creation of a voluntary trust. Courts leave such a transaction as the donor left it.
10. GIFTS: Parol: Equity. The donee never changed her position in reliance upon the alleged gift. During the donor's lifetime the donee had no equity against him with respect to the alleged gift, and his death does not raise an equity against his estate.
Appeal from Circuit Court of City of St. Louis. — Hon. Ernest F. Oakley, Judge.
REVERSED AND REMANDED.
Jacob M. Lashly and Lashly, Lashly, Miller Clifford for Masonic Home of Missouri; Bryan, Williams, Cave McPheeters for St. Louis Union Trust Company.
(1) Plaintiff-respondent is estopped to assert a claim of title to the property involved here. (a) Where (as here) an executor or administrator takes possession or control of the decedent's estate he is estopped to set up in his individual capacity an adverse title or claim to all or any part of the estate in his possession or control in his capacity as executor or administrator. Sessions v. Willard, 172 374 So. 242; Wiseman v. Swain, 114 S.W. 145; Second Natl. Bank v. Ford, 123 S.W.2d 867; Colburn v. Broughton, 9 Ala. 351; Henderson's Succession, 113 La. 101, 36 So. 904; White v. Swain, 3 Pick. 365; Maingault v. Holmes, 8 S.C. Eq. (Bail) 283; Snodgrass v. Snodgrass, 1 Baxt. 157. (b) Where (as here) an executor or administrator includes certain property in his inventory, and the inventory has not been amended and is in full force and effect, he is conclusively estopped from asserting that such property does not belong to the estate under administration. Rinkel v. Lubke, 246 Mo. 377, 152 S.W. 81; Henshaw v. Gunter, 169 Tenn. 305, 87 S.W.2d 561; United States Fid. Guar. Co. v. Clutter, 74 Okla. 254, 179 P. 754; Escallier v. Great Northern Ry. Co., 46 Mont. 238, 127 P. 458; Pluchino v. Piccolo, 114 N.J. Law 82, 175 A. 812. (2) Weight of testimony as to oral statements of decedents. Testimony as to oral statements claimed to have been made by persons since deceased is regarded as the weakest kind of evidence and is subject to the closest scrutiny. Johnson v. Quarles, 46 Mo. 423; Ringo v. Richardson, 53 Mo. 385; Kennedy v. Kennedy, 57 Mo. 73; Modrell v. Riddle, 82 Mo. 31; Daudt v. Steiert, 205 S.W. 222; Lea v. Polk County Copper Co., 21 How. 493, 16 L.Ed. 203; Makinson v. Shumick, 196 Iowa 980, 193 N.W. 407; Overlander v. Ware, 102 Neb. 216, 166 N.W. 611; Plath v. Mullins, 87 Wn. 403, 151 P. 811; Hoffman v. Condon, 134 App. Div. 205, 118 N.Y.S. 899; Tweedale v. Barnett, 172 Cal. 271, 156 P. 483; Heitman v. Bruns, 37 Cal.App. 489, 174 P. 67; Foscue v. Mitchell, 190 La. 758, 182 So. 741; Welch v. All Persons, etc., 78 Mont. 370, 254 P. 179. (3) Burden of proof was upon plaintiff-respondent. The burden of proof was upon plaintiff-respondent to show by clear, unequivocal, convincing and conclusive evidence all of the necessary requisites of a gift inter vivos, namely, (a) donative intent, (b) delivery of the subject matter of the alleged gift to plaintiff, and (c) acceptance of the subject matter by plaintiff. Gosney v. Costigan, 326 Mo. 1215, 33 S.W.2d 947; Geude v. Eiben, 328 Mo. 373, 89 S.W.2d 960; Jones v. Falls, 101 Mo. App. 536, 73 S.W. 903; In re Van Fossen, 13 S.W.2d 1076; Light v. Graham, 199 S.W. 570; Hays Admrs. v. Patrick, 266 Ky. 713, 99 S.W.2d 805; Rothwell v. Taylor, 303 Ill. 226, 135 N.E. 419; Ries v. Ries' Estate, 322 Pa. 211, 185 A. 288; Rosenmann v. Belk-Williams Co., Inc., 191 N.C. 493, 132 S.E. 282; Andreas v. Andreas, 84 N.J. Eq. 368, 94 A. 417; Casey v. Topliffe, 80 F.2d 543. (4) The judgment appealed from cannot be sustained upon any legal theory supported by the record. (a) The declarations claimed to have been made by the alleged donor in respect to the ownership of property which is claimed as the subject matter of gift by plaintiff-respondent are not in themselves sufficient evidence to establish the essential elements or requisites of a valid gift, which must be shown by other evidence than the mere declarations of the alleged donor. Albrecht v. Slater, 233 S.W. 8; Campbell v. Sech, 155 Mich. 634, 119 N.W. 922; Fouts v. Nance, 55 Okla. 266, 155 P. 610; Thomas v. Riley, 147 Ala. 189, 41 So. 854; Atchley v. Rimmer, 148 Tenn. 303, 255 S.W. 366; Collins v. Mande, 144 Cal. 289, 177 P. 945; Short v. Patton, 79 W. Va. 179, 90 S.E. 598; Bolles v. Toledo Trust Co., 132 Ohio St. 21, 4 N.E.2d 917; In re Brown's Estate, 130 Misc. 865, 226 N.Y.S. 1; Casey v. Topliffe, 80 F.2d 543; Chambers et ux. v. McCrerry, 106 F. 364. (b) The other evidence in the record is insufficient to show one of the necessary requisites of a gift, namely, a delivery of the securities to plaintiff-respondent. Albrecht v. Slater, 233 S.W. 8; Trautz v. Lemp, 329 Mo. 580, 46 S.W.2d 135; Bauernschmidt v. Bauerschmidt, 97 Md. 35, 54 A. 637; Dingley v. Robinson, 149 Wn. 301, 270 P. 1018; Mitchell v. Weaver, 242 Mass. 331, 136 N.E. 166; Dodson v. Matthews, 22 Tenn. App. 49, 117 S.W.2d 969; Andreas v. Andreas, 84 N.J. Eq. 368, 94 A. 417; Bolles v. Toledo Trust Co., 132 Ohio St. 21, 4 N.E.2d 917; Casey v. Topliffe, 80 F.2d 543. (c) The evidence is insufficient to show another essential element of a valid gift, to-wit, that plaintiff-respondent accepted the securities. Albrecht v. Slater, 233 S.W. 8; Gottstein v. Hedges, 210 Iowa 272, 228 N.W. 93. (d) Nor can the judgment or decree appealed from be affirmed upon the theory that Otto M. Cartall, during his life, created a trust in the securities under determination here for the use and benefit of plaintiff-respondent because the record and the evidence fails to support such a theory. Goodman v. Crowley, 161 Mo. 657, 61 S.W. 850; Pennell v. Ennis, 126 Mo. App. 355, 103 S.W. 147; Martin v. Martin, 266 S.W. 750; Citizens Natl. Bank v. McKenna, 168 Mo. App. 254, 153 S.W. 521; In re Smith's Estate, 144 Pa. 428, 22 A. 916; Noble v. Learned, 153 Cal. 245, 94 P. 1047; Young v. Young, 80 N.Y. 422; In re Crawford, 113 N.Y. 560, 21 N.E. 692; Wadd v. Hazelton, 137 N.Y. 215, 33 N.E. 143; Mitchell v. Weaver, 242 Mass. 331, 136 N.E. 166; Robertson v. Parker, 287 Mass. 351, 199 N.E. 645; Mulloy v. Charlestown Five Cent Saving Bank, 285 Mass. 101, 188 N.E. 608; Moore v. Lawton, 147 Md. 244, 127 A. 756; Ariett v. Osage County Bank, 120 Kan. 286, 242 P. 1018; Elliot v. Gordon, 70 F.2d 9; Eschen v. Steers, 10 F.2d 739.
Clarence T. Case, David W. Voyles and T. Jackson Case for respondent.
(1) To constitute estoppel in pais, the conduct of the party sought to be estopped must be shown to be not only inconsistent with the rights he or she now claims, but, as respects the real interests of another, that its application is required in justice and equity, because of some benefit he or she received or some disadvantage or change of position caused to the party who claims estoppel, by such conduct. Fitts v. Cook, 5 Cush. 596; Hauser v. Murrey, 256 Mo. 58; Stone v. Gillian, 81 Mo. App. 9; Moran v. Stewart, 173 Mo. 207; McBride v. Bank Trust Co., 330 Mo. 259; First State Bank v. Braden, 39 S.D. 53; Peck v. Peck, 137 P. 137; Natl. Match Co. v. Storage Ice Co., 227 Mo. App. 115, Cert. Den., 290 U.S. 668; Williams v. Reid, 37 S.W.2d 537; State v. Fidelity Cas. Co., 82 S.W.2d 123; McWilliams v. Ramsey, 23 Ala. 813; In re Murphy's Estate, 30 Wn. 1. (a) Estoppel does not create a cause of action, if none otherwise existed. State v. Shell Pipe Line Co., 139 S.W.2d 510. (b) It is an affirmative defense, and must be pleaded with the facts necessary to constitute it. Ambruster v. Ambruster, 326 Mo. 51, 77 A.L.R. 782; Scanlon v. Kansas City, 325 Mo. 125; Grafeman Dairy Co. v. Northwestern Bank, 315 Mo. 849; Mo. Cattle Loan Co. v. Great So. Life Ins. Co., 52 S.W.2d 1; Briscoe v. Merchants Bank, 102 S.W.2d 751; Noell v. Remmert, 326 Mo. 148. (2) It is well-settled doctrine that declarations of a donor in the nature of admissions against interest are admissible as tending to show that he had given the property in question to the donee. 24 Amer. Juris., p. 793, secs. 121, 125; Durham v. Shannon, 116 Ind. 403; Anno. 105 A.L.R. 409; Harvey v. Long, 260 Mo. 374; Albright v. Davis, 64 S.W.2d 121; In re Dayton's Estate, 121 Neb. 402, 237 N.W. 303; Brown v. Fore, 12 S.W.2d 114, 65 A.L.R. 435; Northrup v. Burge, 255 Mo. 641; Harris Banking Co. v. Miller, 190 Mo. 640; Rollestone v. Bank of Commerce, 299 Mo. 57. (a) When declarations or acts accompany the fact in controversy, and tend to illustrate or explain it, they are treated, not as hearsay, but as original evidence. Jones on Evidence (2 Ed.), sec. 35. (b) When shown to have been made with deliberations, such evidence is not necessarily weak evidence, nor requiring corroboration; but when admissions are so proved, they may have great inherent force. Jones on Evidence (2 Ed.), sec. 295. (c) When evidence by law is not allowed to be contradicted, it is said to be "conclusive." 1 Jones Comm. on Ev. (2 Ed.), p. 31. (d) The weight and sufficiency of evidence in actions involving gifts inter vivos and causa mortis are governed by the general rules of evidence, and in most jurisdictions, it has been held such evidence must be clear and convincing. 24 Amer. Juris., p. 797, sec. 129; Gosney v. Costigan, 326 Mo. 1215; Jones v. Falls, 101 Mo. App. 536; Light v. Graham, 199 S.W. 570. (3) The rule is well established that all things in action consisting of the promises or undertakings of third persons, of which the legal title or equitable title can pass by delivery, may be the subjects of a valid gift, including promissory notes. 3 Pomeroy Eq. Jur. (3 Ed.), sec. 1148. (a) The test of the question whether a debt has been assigned is whether under the circumstances the debtor would be justified in paying the debt to the person named as assignee. Fairbanks v. Sargeant,
117 N.Y. 320; In re Steger, 202 F. 791. (b) Any act of the assignor indicating that he relinquishes control over the chose in action amounts to a constructive delivery of the instrument. 5 C.J., p. 904, sec. 69. (4) Our Married Woman's Act provides that the husband shall not be deemed to have reduced to his possession property belonging to his wife, or coming to her by gift, bequest, or inheritance, by his use, occupancy, care or protection thereof, without her written consent. R.S. 1929, sec. 3003. (a) Under such statutes, a gift from husband to wife will be sustained, if the rights of creditors do not intervene, even though made without the intervention of a trustee, or evidenced in writing or declared to be for her sole and separate use. Johnston v. Johnston, 173 Mo. 91; Batts v. Gooch, 97 Mo. 88; Bettes v. Magoon, 85 Mo. 580; Strother v. McFarland, 184 S.W. 483. (b) Where the two live together, his possession of her private property will be considered her possession. Stewart v. Balls, 33 Mo. 154. That he may be the agent for his wife is well settled. Farley v. Stroeh, 68 Mo. App. 85. (5) Regard to the relation of donor and donee and situation of the property must be had as respects gifts inter vivos. Where there is between them a family relationship, and no fraud and the rights of creditors are not involved, the law recognizes a different rule on questions of delivery and acceptance. Harvey v. Long, 260 Mo. 374; Dickson v. Dickson, 231 Mo. App. 515; Jones v. Jones, 201 S.W. 557; Thornton on Gifts Advancements, sec. 169; In re Brady's Estate, 239 N.Y.S. 5; In re Estate of Trapp, 269 Ill. App. 269; In re Chapple's Estate, 2 A.2d 719; Davis v. Zimmerman, 40 Mich. 24; Ratterman v. Lodge, 13 F.2d 805; Phillips v. Plastridge, 107 Vt. 267. (a) There is a presumption, even as to real estate title, that where a husband has acquired and caused land to be conveyed to his wife, it was intended to be a settlement on her. Siling v. Henderson, 193 Mo. 365; Schuster v. Schuster, 93 Mo. 483. (b) As between husband and wife, delivery may lie in the intention of the husband. Harvey v. Long, 260 Mo. 374; Estate of Malone, 13 Pa. 313. (c) Delivery as between husband and wife may be inferred from the husband's declaration that he made the gift. In re Dayton's Estate, 121 Neb. 402, 237 N.W. 303; Brown v. Fore, 12 S.W.2d 114, 65 A.L.R. 435. (6) Especially, in the case of the wife, or other member of his family, where a gift imposes no burden, and was entirely beneficial, acceptance will be presumed, whether donee was cognizant of and acquiesced in the arrangement or not. Bunker v. Fidelity Natl. Bank, 335 Mo. 305; Gosney v. Costigan, 326 Mo. 1215; In re Hartley's Estate, 54 S.W.2d 429; Albright v. Davis, 64 S.W.2d 121; In re Estate of Trapp, 269 Ill. App. 269. (7) The fact that income was received by the donor after the gift, with the assent of the donee, would have no effect to defeat it. Telle v. Roever, 159 Mo. App. 115; Robinson v. Pero, 272 Mass. 482, 172 N.E. 599; Clough v. First Natl. Bank, 254 Mich. 298, 236 N.W. 790; Ratterman v. Lodge, 13 F.2d 805; Collins v. Collins, 45 S.W.2d 811; Burns v. Nolette, 83 N.H. 489. (a) The fact that securities are, after the gift, deposited in a safe deposit box or places to which the donor has right of access, does not invalidate a gift. Harvey v. Long, 260 Mo. 374; Dickson v. Dickson, 231 Mo. App. 515; Rumsey v. Otis, 133 Mo. 85; In re Dayton's Estate, 121 Neb. 402, 237 N.W. 303; In re Brady's Estate, 239 N.Y.S. 5. (8) A gift inter vivos conveys to the donee both the legal and the equitable title, while a trust is simply a perfected gift of the equitable title only. Coon v. Stanley, 230 Mo. App. 524; Starkes v. Lincoln, 316 Mo. 483. (a) If it is evident that the donor intended to make a complete disposition of the property, the courts will assume, if there was an imperfect gift, inter vivos, that the settlement amounted to a valid executed trust. Harris Banking Co. v. Miller, 190 Mo. 640; In re Soulard's Estate, 141 Mo. 642; Mize v. Bates County Bank, 60 Mo. App. 358; In re Hartley's Estate, 54 S.W.2d 429; Davis v. Rossi, 34 S.W.2d 9. (9) Express trusts in personal property are not required to be in writing. Northrup v. Burge, 255 Mo. 641; Harris Banking Co. v. Miller, 190 Mo. 640; R.S. 1929, sec. 3104. (a) And may be created either by transfer to the beneficiary, or a trustee, or if the donor declares himself a trustee for such purposes. Rollestone v. Bank of Commerce, 299 Mo. 57; In re Soulard's Estate, 141 Mo. 642; Lane v. Ewing, 31 Mo. 86; Harris Banking Co. v. Miller, 190 Mo. 640; Mize v. Bates County Bank, 60 Mo. App. 358. And if the donor constitutes himself trustee for the donee, no further delivery is required. In re Brady's Estate, 239 N.Y.S. 5, affirmed, 254 N.Y. 590. (10) Where the record is practically all one way with respect to issue presented, the Supreme Court will give deference to the chancellor's findings. Findly v. Johnson, 142 S.W.2d 61.
Mary E. Cartall, widow of Otto M. Cartall, seeks a judgment decreeing her to be the owner of 128, face value $64,000, Dorothy Apartment Company notes, dated as of September 1, 1935, and due September 1, 1945, and 7, face value $3500, New Clemens Realty Company notes, dated as of April 1, 1933, and due April 1, 1943, 7 shares of no par value common stock of said New Clemens Realty Company, and directing the delivery of the same to her by the coexecutor of her deceased husband's estate. This, on the theory, basically, of a gift inter vivos to her by her husband. All notes are $500, 6% mortgage notes, payable to bearer. The evidence established that deceased left only current bills; that his debts, with the exception of an immaterial item, had been paid at the time of trial, and that the securities involved had a value well in excess of $7500. St. Louis Union Trust Company and Masonic Home of Missouri, corporations, coexecutor with plaintiff and residuary legatee, respectively, under Mr. Cartall's will, appeal from a judgment in favor of plaintiff. They contend the evidence failed to establish certain constitutive elements of a valid gift inter vivos; among other things, a valid delivery and acceptance. We shall refer [372] to the makers of the notes as Dorothy and New Clemens.
The issue involving a gift inter vivos may be concisely framed — may notes payable to bearer found, without any identification marks, in her husband's safe deposit box after his death be held to have been delivered so as to perfect a gift inter vivos by the husband to the wife, there being no actual delivery, by reason of declarations of the husband to third parties (a self-constituted paying agent) that they were the wife's property, the listing of the notes, for convenience, on the records of said paying agent in the wife's name, the issuance of interest checks in the wife's name by said paying agent, the wife's and husband's endorsements of said checks and the retention of the interest money by the husband, when the gift is first asserted by the wife (who did not know of the gift during the husband's lifetime) after his death — but a proper development of the wife's contentions calls for a detailed statement of the transactions. The case has been exceptionally well presented.
Otto M. Cartall, who gave every indication of previous good health, "dropped dead" in downtown St. Louis on December 18, 1936. He and plaintiff had lived as husband and wife since their marriage in 1911. There were no children. Mr. Cartall, a full partner in the firm of Kessler, Cartall Company of St. Louis, certified public accountants, had been an active and successful business man, and had accumulated an estate appraised at $226,499.64, entirely of personal property. The Dorothy and New Clemens notes are included in the inventory of his estate and are in the possession of plaintiff's coexecutor.
Plaintiff had no business education and never acquired by inheritance, gift or otherwise a separate estate, property or independence, except what came to her or will come to her from her husband.
Mr. Cartall's will, duly admitted to probate January 5, 1937, was executed on October 3, 1931. The issues and the existing circumstances do not call for its detailed provisions. So far as material, after bequeathing his household furniture, books, clothes, jewelry and like effects to plaintiff, Otto M. Cartall willed the residue of his estate to plaintiff and the St. Louis Union Trust Company, as cotrustees, with power, to manage, control, invest, reinvest, etc., and named plaintiff as the beneficiary of the net income of said trust estate; vesting in the trustees, in their discretion, the privilege of encroaching upon the corpus of the trust estate from time to time for such amounts as they might deem necessary for the proper maintenance and support of plaintiff; protecting said trust estate and the income against the claims of creditors and the anticipation of the proceeds by the beneficiary, and making the provisions of the will in lieu of plaintiff's marital rights. The will further provided that upon the death of plaintiff the trust should terminate and the then trust estate should pass to the Masonic Home of Missouri, codefendant.
The Chouteau Trust Company, of St. Louis, Missouri, the named trustee in a number of deeds of trust securing evidences of debt of various apartment corporations, including the Dorothy and New Clemens, closed its doors in 1933 and became incapacitated to act as trustee. The circuit court appointed Otto M. Cartall successor trustee for practically all the issues in St. Louis. Most of the securities were in default. The noteholders of the various issues were brought together, one after another, and elected a "bondholders' committee," with E.G.H. Kessler (Mr. Cartall's partner in the accounting business) as chairman to do the active work. Mr. Kessler also acted as president for practically all of the interested corporations. The Dorothy and New Clemens notes, among others, were deposited with the bondholders' committee pending refinancing. The Apartment Management Company also was organized to manage the properties, collect the rents, distribute the interest and keep track of the securities. E.W. Colbrunn was the treasurer and general manager and acted in a clerical capacity for the bondholders' committee. Eventually the Dorothy and New Clemens reorganizations were effected by the bondholders' committee. The Dorothy Apartment Company and the New Clemens Realty Company were organized to take title to the respective properties. New notes and new deeds of trust, executed and recorded, were exchanged for the old notes and deeds of trust, released of record.
At the time of his appointment as substitute trustee or soon thereafter, Mr. Cartall held securities secured by deeds of trust on a number of apartment properties, including the Dorothy, New Clemens, Winston Churchill, Trenton, Concord, Solar, [373] Norwalk, and Enright issues. He desired to consolidate his investments of this nature. He mentioned this to Mr. Kessler and Mr. Colbrunn. By offering a premium to induce Dorothy noteholders to exchange, he, with the assistance of Messrs. Kessler and Colbrunn, acquired $64,000 of the outstanding $70,000, face amount, of the Dorothy old notes pending the refinancing.
To facilitate the handling of the several note issues (the notes were payable to bearer, were not registered and no provision in the notes or deeds of trust looked to their registration) in which the bondholders' committee was interested, the Apartment Management Company made up lists of the holders. Said lists reflect what Mr. Colbrunn was told. When informed of the transfer of a security, the old name on the list would be inked out and the new name written above the old. The exhibit of the security was never required. Lists of the Dorothy and New Clemens noteholders were introduced. Plaintiff's Exhibit 13 was the Apartment Management Company's list of the Dorothy new noteholders and carried the following: "Mary E. Cartall (128) 4023 Magnolia Place." Mr. Colbrunn testified it was typed prior to the issuance of the interest checks on the Dorothy new notes. Throughout it is an original typewritten copy, indicating no change therein up to the date of trial, March 21, 1939. Defendants' Exhibit 9 consists of seven sheets of paper. Mr. Colbrunn testified that defendants' Exhibit 9 was the remainder of the list of which plaintiff's Exhibit 13 was a part; that it was impossible to set a date on said Exhibit 9 other than that it came into existence after the first of 1933. We shall not detail defendants' Exhibit 9. It included earlier lists of the holders of Dorothy notes, giving the note numbers. A close study of its sheets in the light of the record does not aid plaintiff's case. Mr. Colbrunn testified that, for the purpose of having him assist in acquiring Dorothy notes, Mr. Cartall delivered to him $6500 Enright, $2000 Winston Churchill; $11,000 New Clemens; $1500 Solar and $500 Norwalk; and that in acquiring the $64,000, face amount, of Dorothy notes, they exchanged notes listed in Mr. Cartall's name and notes listed in plaintiff's name.
Mr. Kessler did not recall discussing the New Clemens issue with Mr. Cartall; but testified, speaking of the Dorothy issue, that Mr. Cartall "meant to give these bonds to his wife. I couldn't help but know;" that he had heard Mr. Cartall tell Mr. Colbrunn to pay the interest on the Dorothy bonds to plaintiff; that this occurred the first time that interest was paid after the distribution of the new notes [May, 1936]; that Mr. Cartall said: "I'll give these bonds to my wife."
Mr. Colbrunn testified, with respect to the Dorothy notes, that Mr. Cartall told him they were his wife's, he said: "Put them in the name of Mary E. Cartall;" that after Mr. Cartall acquired the 128 Dorothy notes, witness said: "`Mr. Cartall you have got many bonds according to our list that stand in your name and some in your wife's name,' and, I said, `Now, whose bonds are these Dorothy bonds?' He said to me, `I want them in the name of Mary E. Cartall.' I said, `All right.' I fixed up this list then and that is how that name come on that list. Then when the January, 1936, interest was payable I called him on the telephone and I said, `Mr. Cartall, we are going to pay interest on the Dorothy. Who gets this interest money?' and he said, `Make that to Mary E. Cartall, they are her bonds.' And I did. And the next time the interest was payable, in July of 1936, for some unknown reason, I have no reason to offer why I did, but I remember it as if it happened yesterday, I called him again. I said, `Mr. Cartall, we are going to pay the Dorothy interest. Who shall I make the check to?' and he had about enough of it, I guess, and got kind of mad and he said, `I don't know what I have to do to make you people understand out there,' he said `Those are my wife's bonds. Now, for heaven's sake, put them in her name and don't bother me about them; pay the interest to her. That should be final.'" He testified the first time Mr. Cartall told him to do this was in 1935, when he made up plaintiff's Exhibit 13; the second time was when the first interest was paid in May, 1936, and again when the interest was paid in July, 1936.
The record discloses that Mr. Kessler holds the new Dorothy stock in trust for the noteholders and that voting trust certificates covering the seven new Clemens notes were issued to Mr. Cartall's estate after his death.
Fifteen dollars semi-annual interest is payable on each note. Mr. Colbrunn testified that Mr. Cartall told him to put the New Clemens notes in his wife's name. [374] Apartment Management Company cancelled checks, payable to plaintiff, covering New Clemens interest due, were introduced, viz.: April 1, 1935, $105; October 1, 1935, $465; April 1, 1936, $105; October 1, 1936, $105. The $465 check represented interest on 31 New Clemens notes. Apartment Management Company checks, payable to Mary E. Cartall and covering interest due on the 128 Dorothy notes, were issued as follows: On May 28, 1936, for $1600, representing a partial payment of $12.50; and on July 31, 1936, for $1920 — a payment of $15. All interest checks issued during Mr. Cartall's lifetime bear the following endorsements: "Mary O. Cartall," "O.M. Cartall;" and it was stipulated that plaintiff never received any of said interest payments.
Gilmore Bloch, president of Milton K. Lederer Company, stock and bond dealers, identified two receipts for securities, one dated April 9, 1935, for $2500 Dorothy notes, another, dated April 27, 1935, for $5000 Funston Apts. Each reading: "We hand you herewith the following securities. Kindly acknowledge receipt of this sum and return to us." They were addressed to Mary E. Cartall and were signed: "Mary E. Cartall per O.M. Cartall." A number of like receipts, including $4500 New Clemens notes and 3 shares of New Clemens voting trust certificates, addressed to and signed by "O.M. Cartall," were offered by defendants.
After Mr. Cartall's death the Dorothy and New Clemens notes here involved were found in safe deposit box No. 1470A of the First National Safe Deposit Company, which was opened in the presence of Mr. Kessler, Mr. Hinton, representative of St. Louis Union Trust Company, plaintiff and others. They were not on top of other things in the box nor in any envelope of any kind, but were laid flat, folded once, in the box and had no marks on them at all. The box had been rented May 15, 1935, in the name of O.M. Cartall and while he had deputized plaintiff to enter the box, there was testimony that she had never done so during Mr. Cartall's lifetime. When the box was opened, Mr. Kessler remarked to Mr. Hinton in the presence of plaintiff: "These bonds [speaking of the Dorothy] belong to Mrs. Cartall." Mr. Kessler was of opinion plaintiff did not say anything. Mr. Hinton mentioned what Mr. Kessler had said and asked plaintiff if she wanted to make any statement. "She just said she didn't know anything about it."
The New Clemens and the Dorothy notes here involved were inventoried and appraised as assets of O.M. Cartall's estate in the inventory, subscribed, sworn to and filed of record by plaintiff and M.A. Hinton, agent, coexecutor. The first and second settlements, signed, sworn to and filed (to the September, 1937, and March, 1938, terms of court) by the executors (including plaintiff) of the estate of O.M. Cartall, deceased, account to the estate for the receipt of interest on said Dorothy and New Clemens notes, and show said notes as part of the balance on hand of said estate. This suit was instituted November 12, 1937.
It was stipulated that the Federal income tax return for the year 1935 required the statement therein of any gift exceeding $5000 in value; that Mr. and Mrs. Cartall filed a joint return for said year, and said return answered the inquiry with respect to the transfer or receipt of any such gift: "No."
The refinancing of the Dorothy was handled by attorney Newman, who, under date of May 13, 1936, left a memorandum with Mr. Cartall that he had received the Dorothy old notes, the Dorothy new notes, and the Dorothy title. On the reverse side thereof, in Mr. Cartall's handwriting, was the following: "May 14, 1936. In Mr. E.G.H. Kessler's file (in his office) there are 70M of Dorothy Apt 1st Mtg bonds — of which $64,000.00 belong to me — O.M. Cartall."
We are concerned with an alleged absolute parol gift inter vivos of notes of third parties payable to bearer. We have no issue involving any consideration. The authorities hold there must be a delivery, actual or constructive, of the thing given, with intent to relinquish all dominion thereover, by a donor to a donee to constitute an irrevocable gift inter vivos, the requirement of delivery being particularly applicable to parol gifts. Two factors enter into a consideration of delivery. In case of an actual delivery, was the delivery in consummation of the intention to give? If there be an intention to give but no actual delivery, were the acts done a sufficient delivery to consummate the gift? We have no actual or symbolical change of possession in the instant case and, for the purpose of discussing the issue of delivery, assume an intent to give.
Plaintiff asserts that consideration must be accorded the subject of the gift and the relations between the donor and the [375] donee; citing Davis v. Zimmerman, 40 Mich. 24, 27, a case quoted in a number of Missouri cases, including and much like Schooler v. Schooler, 18 Mo. App. 69, 75(2). In these and other cases there was testimony establishing the wife's possession and dominion over the property. Plaintiff's position may be well taken but the time when the gift is first asserted also has a bearing on the issue of delivery. Stein v. Mercantile Home Bk. Trs. Co., 347 Mo. 732, 148 S.W.2d 570, 572[3], with respect to the probative value of the evidence essential to establish a gift inter vivos asserted after the death of the donor by a nephew who was regarded by the donor as his son, states: "`Clear, cogent and convincing' describes the standard which the testimony must meet to such satisfaction so `as to leave no room for a reasonable doubt in the mind of the chancellor.'" [Re Franz Estate, 344 Mo. 510, 520[3], 127 S.W.2d 401, 404[8], speaking of a gift from children to their mother.]
While, as stated by plaintiff, the right of a debtor to pay the debt to a third person is a factor entitled to consideration on the issue whether title has passed to such other, it is not controlling because: Any lack of consideration passing between the original payee and such third person is no defense to the debtor in an action by such third person on the debt. [Roth v. Continental Wire Co., 94 Mo. App. 236, 261(I), 68 S.W. 594, 601(1).] On the other hand, it is elementary that a want of consideration is available to an alleged donor in an action by a purported donee to compel performance of a communicated intention — a promise — to make a gift.
The Apartment Management Company, for its convenience, and not by reason of any contractual relation between the debtor and creditor, listed the notes upon its records in plaintiff's name upon statements by Mr. Cartall in response to inquiries made of him. [Consult In re Crawford, 113 N.Y. 560, 565, 21 N.E. 692, 693.] Title does not pass by reason of mere statements indicating a gift. [Light v. Graham (Mo. App.), 199 S.W. 570, 572[2-4]; Albrecht v. Slater (Mo.), 233 S.W. 8, 10[1].] Want of consideration is one reason. Mr. Cartall never parted with the possession of the notes. He placed them in his safe deposit box, which plaintiff was deputized to, but did not, enter. Her authority under his deputation terminated at his death. Mr. Cartall's signing receipts addressed to plaintiff covering the delivery of bearer notes and his endorsement of the interest checks payable to plaintiff in the light of his retention of the notes, his receiving the proceeds of the interest checks, and the undisputed inferences (from plaintiff's failure to enter the safe deposit box and from her statement that she knew nothing about the matter), that he must have presented the interest coupons for payment, and that he never told plaintiff of any gift, is not persuasive and convincing evidence of an irrevocable parol gift in praesenti from a husband to his wife.
There is no legally consummated gift inter vivos where the donor reserves, either expressly or in the circumstances, the power of revocation or dominion over the subject of the gift. Mr. Cartall retained dominion over the notes precisely the same as he had had dominion prior to the alleged gift. He could at any moment undo what the witnesses testified he said he had done. An irrevocable gift is inconsistent with a locus penitentiae. The point is not that Mr. Cartall may have been unaware of the legal requirements of a valid gift; and we have no right to supply omissions in the evidence to uphold an alleged gift no matter how appealing the donee's position may be.
Albrecht v. Slater (Mo.), 233 S.W. 8, 10[1, 2], was an action by a sister to remove an alleged cloud on real estate held by herself and husband, represented by an $8000 note of herself and husband payable to her brother, secured by a deed of trust on said real estate, on the theory of a gift inter vivos. She and her brother had a safe deposit box and each had a key thereto, but she never had seen the box opened until it was opened with her key after her brother's death in the presence of those interested in his estate. A note, addressed to the sister and signed by the brother, was found in the box stating he gave her the amount of $8000 as a present. The sister did not know of this communication. The papers in the box, including the note and deed of trust and the note addressed to the sister were taken in charge by the administrator without the sister asserting any claim or interposing any objection. The sister's son had been authorized to make the interest payments for her and he paid an interest installment soon after the brother's death. Witnesses testified that the brother had stated he had everything arranged, and that the deed was turned over to the sister. The court [376] held there was no sufficient delivery or acceptance to constitute a valid gift. We quote: "In the case of Thomas v. Thomas, 107 Mo. 459, 18 S.W. 27, it is held: `In order to constitute a valid gift of personal property, it is essential that it be delivered by the donor to the donee, or some one for him, with the intention on the part of the donor to part with his right in and dominion over the subject of the gift, and that it be accepted by the donee, whose ownership must take effect immediately and absolutely, leaving nothing essential to be done in the future.' (Italics ours.)"
Trautz v. Lemp (Banc), 329 Mo. 580, 605, 46 S.W.2d 135, 143[20-22]. Alexander H. Handlan owned 1550 shares of corporate stock and was president of the corporation. In 1917, he had 15 certificates for $100 shares and one certificate for 50 shares issued in his name. These were delivered to him at his office by his son A.H. Handlan, Jr., secretary. He then called his son Edward R. Handlan in, endorsed each new certificate in blank, and wrote upon an envelope: "Sept. 11th, 1916. This is the property of my son E.W. Handlan, given to him for his faithful work for the firm of Handlan-Buck Mfg. Co. A.H. Handlan. The within shares will be deducted from his interest in my estate at face or par value. A.H. Handlan." Similar legends were written upon two other envelopes, one having the name of his son E.R. Handlan thereon, and the other, the name of his son A.H. Handlan, Jr., thereon. The father then separated the certificates of stock into three lots and enclosed the separate lots in the envelopes. He delivered the envelopes to his son E.W., treasurer of the company, for safe-keeping, who placed them in the company's vault to which he alone had access. After complaint by one of the sons, the father and two sons rented a safe deposit box in which any two had joint access and placed the certificates and other corporate papers therein. The father continued to hold the office of president, draw the salary therefor, and voted the stock. The court held the attempted disposition of the property was testamentary in character and invalid, and that there was no completed delivery of the stock to the sons.
Among other cases holding no delivery had been established of personal property found in safe deposit boxes, which see, are: Bauernschmidt v. Bauernschmidt, 97 Md. 35, 59, 54 A. 637, 643; Bolles v. Toledo Trs. Co., 132 Ohio St. 21, 28, 4 N.E.2d 917, 918[6, 7]; Dingley v. Robinson, 149 Wn. 301, 270 P. 1018; Casey v. Topliffe, 80 F.2d 543; Mitchell v. Weaver, 242 Mass. 331, 333, 136 N.E. 166[1-3]; Ariett v. Osage County Bank, 120 Kan. 286, 242 P. 1018. The cases mentioned presented, we think, stronger evidence of a valid gift than the instant record, as do others; for instance, Light v. Graham (Mo. App.), 199 S.W. 570, 572[2-4]. [See Annotation, 25 A.L.R. 642.]
The cases stressed by plaintiff are distinguishable on the facts.
Harvey v. Long (Banc), 260 Mo. 374, 384(II), 168 S.W. 708, 710(2), written by BROWN, C., and stressed by plaintiff, was concurred in by two judges; two judges concurred in the result and three judges dissented. It is not an authoritative or controlling pronouncement of the law by a majority of the court. [State ex rel. v. Daues, 323 Mo. 388, 403, 19 S.W.2d 700, 707, 67 A.L.R. 157.] Moreover: Although much of Harvey v. Long discusses an issue of the delivery of a deed conveying real estate to the grantor's wife, the deed having been found in the grantor's desk subsequent to his death, the facts therein stated established that the wife gave the husband a valuable consideration for the conveyance, which is also mentioned in the discussion on delivery (260 Mo. l.c. 381, 383, 389). The remarks in the dissenting opinion, GRAVES, J., writing, with respect to the husband retaining dominion over the deed are more apropos to a case involving notes payable to bearer.
Dickson v. Dickson, 231 Mo. App. 515, 520, 101 S.W.2d 774, 777[8], involved the delivery of a note by a husband to his wife, being an action against the wife to discover assets. The note was endorsed: "Assigned to Emma A. Dickson, without recourse. W.G. Dickson. [Here are credited two interest payments.] At my death this note is to become the property of my wife, Emma A. Dickson." The note was taken from the joint safe deposit box of grantor and grantee, the "assignment" executed, and replaced in the box. The donor soon thereafter stated to another and again to the donee what he had done and that he had "left it in the bank vault with her papers."
Jones v. Jones (Mo. App.), 201 S.W. 557[1-4]. A bank was organized, the stockholders [377] agreeing none should own more than ten shares. A father took ten shares and had seven additional shares placed on the books and issued to his son. He, as president, sent written notices of stockholders' meetings to the son. This was held to permit of an inference of fact on the issues of a consummated gift.
Among the facts occurring subsequent to Mr. Cartall's death, attention may be directed to the following: Mr. Cartall's memorandum, dated May 14, 1936, in his own handwriting and over his signature that he owned the Dorothy notes. When the notes were found in his safe deposit box and plaintiff was asked if she wanted to make any statement concerning Mr. Kessler's remark that the notes belonged to her, she replied she knew nothing about it. Thereafter, she joined in executing, swearing to and filing the inventory and appraisal of Mr. Cartall's estate, and the settlements to the September, 1937, and (after the institution of suit) to the March, 1938, terms of the probate court and in each listed and accounted for said notes, interest thereon, etc., as assets of Mr. Cartall's estate. The Federal income tax return of 1935.
Plaintiff also seeks to hold her judgment on the theory of an express trust. The decree nisi was not based on this theory but upon a finding that the "notes and shares of stock were, by said Otto M. Cartall, given to plaintiff to be her own property. . . ." Plaintiff stresses Re Estate of Soulard, 141 Mo. 642, 659 (III), 43 S.W. 617, 621 (3), and Harris Banking Co. v. Miller, 190 Mo. 640, 663(II), 89 S.W. 629, 635(2). We shall not extend the opinion by detailing the facts of those cases, which differed materially from the facts of the instant record. Closely read there was testimony in each indicating a passing of the title and a delivery. In fact, plaintiff's brief states: "In the case at bar, unlike the Soulard and Harris Banking Company cases, there was not expressed by Mr. Cartall any intention to reserve title in himself, or until his death." We quote from Re Estate of Soulard, 141 Mo. l.c. 664, 43 S.W. l.c. 622: "Three things, it has been said, must concur to raise a trust: `Sufficient words to create it, a definite subject, and a definite object; and to these requisites may be added another, viz., that the terms of the trust should be sufficiently declared.' [Citing authority.]" The declarations attributable to testator, under the instant record, tended to establish an intention to make a gift, unconsummated, in law, at the time of his death. There were no declarations of a trust, transferring equitable titles and creating and defining the interests and powers of the parties. [Elliott v. Gordon, 70 F.2d 9, 11[1-6]; Eschen v. Steers, 10 F.2d 739 (discussing the Missouri cases and law); Citizens Nat. Bk. v. McKenna, 168 Mo. App. 254, 258, 153 S.W. 521, 523[5, 6]; Mulloy v. Charlestown Five Cents Sav. Bk., 285 Mass. 101, 105, 188 N.E. 608, 609[4-7]; and cases infra.]
Donors, not the courts, must create voluntary parol trusts, the same as testators must make their wills and living persons must make their contracts. Unexecuted or imperfect parol gifts of personalty are not trusts, nor are executory parol promises for the creation of a voluntary trust. Courts leave such a transaction as the donor left it. "The rule is well established that equity will not give effect to an imperfect gift by enforcing it as a trust, merely because of the imperfection, since to do so would be to give effect to an intention never contemplated by the maker." [Annotations, 96 A.L.R. 384; 123 A.L.R. 1335; Goodman v. Crowley, 161 Mo. 657, 663, 61 S.W. 850, 852; Godard v. Conrad, 125 Mo. App. 165, 174, 101 S.W. 1108, 1110; Pennell v. Ennis, 126 Mo. App. 355, 360, 103 S.W. 147, 148; Perry v. First Nat. Bk., 230 Mo. App. 374, 377, 91 S.W.2d 78, 80[5].] The Soulard ( 141 Mo. 642, 43 S.W. 617, 621) and Harris Banking Co. ( 190 Mo. 640, 667, 89 S.W. 629, 636) cases recognize this principle.
Plaintiff never changed her position in reliance upon the alleged gift and the testamentary trust permits of the use of so much of her husband's estate as may be necessary for her proper maintenance and support. During his lifetime, plaintiff had no equity with respect to the alleged gift against her husband. It is difficult to perceive how his death can raise an equity against the disposition he made of his estate in his will.
Other points are presented by defendants. They need not be discussed.
The judgment is reversed, with directions to enter judgment in conformity herewith. [378] Cooley and Westhues, CC., concur.
The foregoing opinion by BOHLING, C., is adopted as the opinion of the court. All the judges concur.