Opinion
Argued October 28th, 1932.
Decided January 23d 1933.
The facts exhibited in this case held to show a valid "dry" trust of the fund in dispute, in favor of defendant Winter, enforceable at any time by decree requiring payment of the fund to him.
On appeal from a decree advised by Vice-Chancellor Bigelow. The facts are adequately set forth in the following conclusions filed by him:
"William Winter, husband of Lavinia A. Winter, now deceased, and Irving Trust Company, as executor of her will, each claims to own a savings account in the Long Branch Banking Company standing in the name of `Lavinia A. Winter, in trust for William Winter.' The account was started in 1921. The day before it was opened, Mrs. Winter happened to meet one of the officers of the bank and remarked that she was going to the bank the next day to open an account for her husband. The following day, she called with her husband and opened the account with a deposit of $646.80. When the pass book had been handed to her, she turned it over to her husband, saying: `Here, this is yours, take it.' Sometime later, Mrs. Winter told an intimate friend who lived next door, that she had given her husband a trust fund in the Long Branch Banking Company. From the time of the opening of the account until Mrs. Winter's death in 1930, additional deposits were made in this account on eleven different occasions, each time by Mr. Winter. I take it, however, that all the moneys so deposited belonged to Mrs. Winter, since Mr. Winter, in his statement of claim, does not allege that he deposited his own funds. There was only one withdrawal from this account, namely, in 1923, when $2,020 was drawn on a receipt signed `Lavinia A. Winter, in trust for William Winter.' The money was paid by the teller to Mr. Winter and was by him immediately used to satisfy a mortgage on property belonging to his wife. However, Mrs. Winter had, the year before, executed a will whereby she devised this property to her husband. This will became effective upon her death. At the time of Mrs. Winter's death, the total amount in the account was over $17,000. Mrs. Winter's estate, excluding this account, is valued at about $88,000.
"Mr. Winter has always retained possession of the pass book. Until 1923 he kept it in his home in the bedroom occupied by himself and his wife. In 1923 he rented a safe deposit box in the name of himself and his wife, but Mrs. Winter never signed the safe deposit card at the bank and so, according to the rules of the bank, did not have access to the box, although she could have had access if she had cared to sign the card. In this box Mr. Winter kept the pass book and other papers of value, some belonging to himself and some to his wife.
"Mr. Winter claims the fund on the theory that at the time of opening the account, Mrs. Winter made a presently effective gift to him of the original deposit and at the time of all subsequent deposits she made presently effective gifts of those deposits. In the alternative, Mr. Winter claims on the theory of a valid enforceable trust.
"In order to establish a gift inter vivos, these factors must appear: (1) A donative intent on the part of the donor; (2) an actual delivery of the subject-matter of the gift to the extent practicable or possible, considering the nature of the thing given; (3) the stripping of the donor of all ownership and dominion over the subject-matter of the gift to a like extent. Besson v. Stevens, 94 N.J. Eq. 549; Swayze v. Huntington, 82 N.J. Eq. 127; Taylor v. Coriell, 66 N.J. Eq. 262; Stevenson v. Earl, 65 N.J. Eq. 721. It seems clear to me that Mrs. Winter intended from the time she opened this account, that her husband should have the sole beneficial interest in it. The donative intent is established. The requisite delivery was discussed by Chief-Justice Beasley in Cook v. Lum, 55 N.J. Law 373. `The rule does not require that the title of the donee should be formally perfect, although in the earliest decisions this appears to have been indispensable, but now the law is otherwise settled. Thus the delivery with donative intention of non-negotiable notes or bonds affords an apt illustration of the rule in both of its aspects. Such gifts are admittedly valid, although the title of the donee is not ceremoniously perfect as it wants the finishing touch of a written assignment; but the transaction is validated on the ground that it is possessed of the all-important quality of depriving the donor of all control over the property. After the delivery of such bond or note, the donor can exercise not a single act of ownership with respect to it. He cannot sue upon it, nor collect it, nor regain its possession. And it is this absolute abnegation of power that, in a legal point of view, makes the transaction enforceable.' Vice-Chancellor Van Fleet, in Corle v. Monkhouse, 50 N.J. Eq. 537, upheld a gift of a promissory note by simple delivery, the note having been made by a third party, payable to the donor. Vice-Chancellor Backes, in Laing v. Durand, 84 N.J. Eq. 404, said that the delivery of a savings bank pass book, without more, with an intent to make a gift of the deposit, carries with it the fund.
"The rules of the Long Branch Banking Company contained in the pass book required that the book be presented when money was either withdrawn or deposited. By delivering the book to her husband, Mrs. Winter stripped herself of all control over the fund. She could neither make additions nor withdrawals. It is true that Mr. Winter was not put in full control, since he could not draw the money without his wife's signature; but this defect in his evidence of title concerned only the bank and did not prevent the delivery of the pass book from operating as a gift within the rule stated in the cases above cited. As between Mr. Winter and his wife, he became the sole owner of the fund.
"The claim of Mr. Winter could also be sustained on the theory of a trust. Indeed, the creation of a voluntary trust is a gift of the beneficial or equitable title, and as such, its validity depends on the principles governing gifts in general. There is this to be noted, however. The donor, retaining legal title, may at law, as against others than the donee, retain dominion over the trust fund; but between the donor and donee, in equity, the former has no dominion except as stipulated in the declaration of trust; else the attempted creation of a trust fails.
"In the instant case, the words and acts of Mrs. Winter show an intent to strip herself of all beneficial interest in the fund. The executor relies on Stevenson v. Earl, supra; Nicklas v. Parker, 69 N.J. Eq. 743; affirmed, 71 N.J. Eq. 77; Jefferson Trust Co. v. Hoboken Trust Co., 107 N.J. Eq. 310; Johnson v. Savings, c., Co., 107 N.J. Eq. 547. But these cases are all distinguishable, in that in each of them the conduct of the parties was inconsistent with an intent to vest a present beneficial interest in the alleged cestui que trust.
"Let there be a decree in favor of Mr. Winter."
Mr. Arthur T. Vanderbilt, for the appellant Irving Trust Company, executor.
Mr. J. Fisher Anderson, for the respondent Henry D. Brinley, executor, c., of William Winter, deceased, who died after filing of the bill.
The learned vice-chancellor held that William Winter, now deceased, was entitled to the fund in dispute on either of two grounds, viz., (a) as a completed gift; or (b) as a trust fund established for his benefit by his wife, she retaining the legal title thereto as trustee.
We concur in the result reached by him, and conclude that the decree under review should be affirmed. To this end the second ground adopted by the vice-chancellor is adequate, and we concur in his opinion in that regard, viz., that there was a valid enforceable trust in his favor. Necessarily it was an inactive or dry trust; the trustee retained no beneficial interest in the subject-matter and could have been compelled at any time by decree in equity to hand it over to the cestui que trust. Supreme Lodge, c., v. Rutzler, 87 N.J. Eq. 342. That is the disposition of it made by the decree under review.
This result makes it unnecessary to consider the other ground assigned for the decree below, which for the reason just stated, will be affirmed.
For affirmance — THE CHANCELLOR, TRENCHARD, PARKER, LLOYD, CASE, BODINE, DONGES, BROGAN, HEHER, KAYS, HETFIELD, KERNEY, JJ. 12.
For reversal — None.