Summary
In Mabie v. Bailey (95 N.Y. 206) the Court of Appeals affirmed a recovery by the donee against the estate of the donor for the entire deposit which had been drawn out by the depositor during his lifetime.
Summary of this case from Robertson v. McCartyOpinion
Argued February 5, 1884
Decided February 26, 1884
William F. Cogswell for appellant.
Thomas Allison for respondent.
The case of Martin v. Funk ( 75 N.Y. 134; 31 Am. Rep. 446) decided that a deposit made in the form of the deposit in this case constituted a trust and, unexplained, operated to transfer the beneficial interest in the deposit to the beneficiary named, subject to the conditions of the trust to be implied from the circumstances. In this case the intention of Dr. Bailey, in making the deposit to create a beneficial trust for the plaintiff, is not left to inference from the mere fact of the deposit, and the record of the transaction contained in the books of the bank, and the pass-book. The plaintiff is the grand-daughter of Dr. Bailey's first wife, her mother being the child of Mrs. Bailey by a former husband. In 1860 or 1861, when about three years of age she went to live with Dr. Bailey and remained in his family about four years. The deposit was made in 1864, and after it had been made, on an occasion when the plaintiff's mother was at Dr. Bailey's house, he exhibited to her the pass-book representing the deposit in question, and also other pass-books containing (as was shown on the trial) entries of similar deposits in favor of herself, her husband and her other children, and, without stating the amount of the several deposits, informed her that the deposits for the children were large enough to amount to something when they grew up. He also in reply to her question, "why he could not let us have the money now," replied, "it would do us more good hereafter." The subject of the deposit was spoken of between Dr. Bailey and the witness on several subsequent occasions, in which the provision made for the family was recognized, and no change of intention on his part was indicated. These facts, which were proved without contradiction, confirm the proof furnished by the bank-books and pass-book of the creation of a trust, and exclude the supposition that the transaction was not intended to be that which the written evidence unexplained imports.
The trial court directed a verdict for the plaintiff and refused the request of the defendant's counsel to submit to the jury the question whether the testator intended, by the deposit of the money in his name as trustee for the plaintiff, to create a trust for her benefit. The court in Martin v. Funk left undecided the point whether in respect to such a transaction, "surrounding circumstances may not be shown to vary 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 gestæ, 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. But however this may be, we think in this case there was no legitimate evidence to rebut the prima facie inference from the deposit in the form found, considered in connection with the other affirmative evidence of the intention of the testator, furnished by the plaintiff. The fact that a large number of other deposits of the same general character were made by the testator, some before and some after the one in question, and that they were made in sums of $500, or less, and therefore were entitled, under the rules of the bank to a higher rate of interest than deposits of a larger amount, is not inconsistent with a purpose on the part of the testator to create a personal trust of portions of his money in bank for the future benefit of the persons indicated. The deposits made in the name of the testator as trustee without naming any beneficiary, or in his name as trustee for A., B., C., D., etc., do fairly indicate a purpose not to part with the beneficial ownership of the deposits, but they do not show that he had the same intention in making the deposit for the plaintiff, or other known persons. On the contrary, they tend to support the inference of a different intent; as, if the same intention existed, deposits to the credit of the letters of the alphabet, or to his own credit as trustee, naming no beneficiary, could have been made indefinitely.
The fact that the deposits for the plaintiff and others were subsequently, in 1867, drawn out by Dr. Bailey, is not legitimate evidence that he did not intend when the deposits were made to create a beneficial trust for the beneficiaries named. If the withdrawal was with intent on his part to ignore the trust and to convert the money to his own use, it might be competent evidence of a change of purpose, but it throws no light on the original transaction.
We think the facts shown on the part of the defendant, if competent at all, were so vague and indeterminate that they cannot be considered as raising a conflict as to the intention of the testator, or in weakening the strong affirmative evidence of intention given on the part of the plaintiff. The court was therefore justified in refusing to submit the question to the jury. The trust once established, and no power of revocation having been reserved, it was within the authorities irrevocable. ( Minor v. Rogers, 40 Conn. 512; 16 Am. Rep. 69; Martin v. Funk, supra.)
We think the defense of the statute of limitations was not made out, supposing the statute applies in such a case. The withdrawal of the deposit, in 1867, was not so far as the case discloses in hostility to the trust. The testator held the legal title to the fund as trustee, and it was competent for him to withdraw it to make another investment, or for any purpose not inconsistent with the trust. ( Boone v. Citizens Savings B'k, 84 N.Y. 83.) There is no evidence that he ever repudiated the trust, and no presumption that he did so can be indulged to let in the defense of the statute of limitations. The right of action upon the facts presented did not accrue until the testator's death, which presumptively upon the evidence was the period when the trust terminated.
We think interest was properly allowed from the time of the withdrawal, and that the exception does not raise any question as to the rate.
The judgment should be affirmed.
All concur.
Judgment affirmed.