Opinion
No. 33383.
November 21, 1938. Suggestion of Error Overruled January 2, 1939.
1. GIFTS.
The statute requiring conveyances of lands for a term of more than one year to be in writing precluded defendant from obtaining any estate in his father's land by an alleged verbal gift (Code 1930, sec. 2111).
2. TRUSTS.
Where statute provided that declarations of trust in land should be void unless manifested by writing and that every writing declaring a trust should be acknowledged and lodged with clerk to be recorded, no trust was created in land allegedly verbally given by defendant's father to defendant (Code 1930, sec. 3348).
3. GIFTS.
The mere depositing in bank in name of defendant by defendant's father of money received from sale of father's property was insufficient in itself to constitute gift of money to defendant.
4. GIFTS.
Where defendant's father, after depositing money in bank in defendant's name, retained control of deposit, checked against it, and used some of money, there was not a sufficient delivery to constitute a valid gift of money to defendant, notwithstanding alleged consent of defendant to drawing of checks.
5. GIFTS.
Evidence that defendant's father deposited money in bank in name of defendant without any passbook or other evidence that deposit had been delivered to defendant, that a portion of money was thereafter checked out by father, and that some of money was used in purchasing a gin and press, was insufficient to establish a gift of money to defendant or his ownership of gin and press so as to entitle him to such property, as against assignee of trust deed executed by father including that property.
APPEAL from the chancery court of Alcorn county; HON. JAS. A. FINLEY, Chancellor.
N.S. Sweat, of Corinth, for appellant.
At the time this farm was given to the appellant W.T. Smith, Sr., was in good financial circumstances, was worth about $10,000 or $12,000 and did not owe anybody anything and while the general rule is that real estate cannot be transferred by parol except where the same is taken possession of by the donee and held adversely for the required length of time, yet, at the same time since W.T. Smith, Sr., owed no one anything and it was agreed and understood by the parties that the property was the property of the appellant and was treated as such and the same was never questioned, the appellee has no right now to claim that the gift was not a good and valid gift.
In general the validity of a gift is a question entirely between the donor and those claiming under him and the donee, and it cannot be attacked by a third person having no interest in the property.
28 C.J. 655, sec. 54.
Neither the bank nor the appellee had any interest in the property at that time and the method of handling the ownership of the land was wholly between the donor and the donee and there is no question but that the gift or transfer was intended to be bona fide between the donor and the donee for the reason that when the property was finally sold in 1925 or 1926 the deed was executed by W.T. Smith, but the proof shows that he recognized the property as being that of the appellant for the reason that the matter was discussed between W.T. Smith and the appellant, and when the proposition was made to buy the property W.T. Smith would not agree to sell it until he conferred with the appellant and the appellant gave him instructions to execute the deed. This shows that he recognized the property as being the property of the appellant and, although the legal title according to the records may have been in W.T. Smith, certainly the equitable title to the property was in the appellant; that although the deed to the property was actually executed by W.T. Smith as the grantor, the actual vendor was W.T. Smith, Jr.
Russell v. Watts, 41 Miss. 602, 93 Am. Dec. 270.
The proof shows in this case that the gift was not only not void, but the same was never annulled or voided by the action of the parties, but instead all the proof shows that the same was confirmed by all the intentions and acts of the parties.
The proceeds of this sale was the money of the appellant and shows that the agreement between W.T. Smith and the appellant in regard to the land was bona fide because the proceeds of the said sale were turned over to the appellant as his own and he got all the money. The fact that he did not actually keep the money in his possession and afterwards turned it back to his father and mother and allowed them to keep the money does not make it any the less his property.
28 C.J. 641, sec. 33; Grant Trust, etc., Co. v. Tucker, 49 Ind. A. 345, 96 N.E. 487; Richardson v. Emmett, 61 App. Div. 205, 70 N.Y.S. 546; Hulet v. Northern Pacific R.R. Co., 14 N. Dak. 209, 103 N.W. 628; Lucas v. Lucas, 1 Ark. 270.
It was not even necessary that the proceeds of this sale be delivered directly by the purchaser to the appellant to complete the gift, the property had already been recognized by the parties as the property of the appellant and the purchaser could have delivered the money directly to W.T. Smith and W.T. Smith retained the same for the appellant and still it would have been the property of appellant and the gift would have been completed.
28 C.J. 642, sec. 34; Malone v. Lebus, 96 S.W. 519, 29 Ky. L. 800; Barnhouse v. Dewey, 83 Kans. 12, 109 P. 1081, 29 L.R.A. (N.S.) 166; Hayne v. Gwin, 137 Ark. 387, 207 S.W. 67; Young v. Young, 25 Miss. 47.
The appellant was a minor and lived with his father. He was attending school and it would have been rather hard for him to handle all of this cash and he did the sensible thing, the thing that practically any reasonable minor would have done under like circumstances — that is, turned the money over to his father and told him to take care of it for him, in effect making his father his trustee of this property; and this declaration of trust, although it was in parol, was clear, unequivocal and irrevocable, and this record shows that this money was kept in the home by W.T. Smith and Mrs. M.A. Smith as the trustees of the appellant and the property was treated and recognized by the trustees as being the sole property of the appellant; and if it is considered that the gift was not completed until the money was delivered to the appellant then turned the same over to W.T. Smith and M.A. Smith as his trustees, the fact that the intention to make the gift and the completion of it were not simultaneous does not make any difference.
28 C.J. 642, secs. 35, 36.
Where the donor deposits money in the name of the donee and delivers to him, or to a third person for him, a pass book therefor, or gives the bank written authority to pay out the deposit on the order of the donee, or where he, by an express declaration of trust, constitutes himself a trustee of the donee in respect to such funds the transaction is a valid gift inter vivos.
28 C.J. 662, sec. 63.
The delivery of money to the bank under circumstances showing that it was intended as a gift to the person in whose name and for whose benefit it is deposited is a sufficient delivery, the bank being regarded as the agent of the donee.
Minor v. Rogers, 40 Conn. 512, 16 Am. Rep. 69; Zacharie's Succ., 119 La. 150, 43 So. 988; Barker v. Frye, 75 Me. 29; Gardner v. Merritt, 32 Md. 78, 3 Am. Rep. 115; Boyle v. Dinsdale, 45 Utah 112, 143 P. 136, Ann. Cas. 1917E 363; Hallowell Savings Institution v. Tipcond, 96 Me. 62, 51 A. 249.
Where a father deposits money in a bank to the credit of his minor children as a gift it is immaterial that he retains the deposit book and does not inform the children of the deposit; the delivery of the book to him as their natural guardian is a delivery to them.
Tygard v. McComb, 54 Mo. A. 85.
The testimony is absolutely uncontradicted that the money which was placed in the bank to the credit of appellant was a part of the money which had been held by W.T. Smith and Mrs. M.A. Smith as trustees for appellant; and the testimony is further uncontradicted that the money in the bank remained his solely until he used the same in the purchase of machinery.
A conveyance, valid in its inception, does not become invalid by reason of the fact that the debtor subsequently becomes insolvent. But the question is to be determined as of the time the instrument was delivered and not the time of its execution.
27 C.J. 466-467, sec. 106.
There is not one scintilla of evidence in this record that the gift to appellant was to defraud, whether it was given by giving the tract of land, or whether it was given when the proceeds of the sale of the land were turned over to appellant just after the completion of the sale, or whether the same was considered completed when the money was put in the bank to the credit of appellant, or whether it was considered completed when the cash was actually turned over to the appellant just prior to the time that he bought the gin press and machinery. The proof shows that the intention of the parties and their actions were absolutely bona fide and free of any intent to defraud.
The uncontradicted proof shows that the appellant employed his uncle, J.S. Smith, to install the machinery and press on the premises. The further uncontradicted proof shows that the press and the gin machinery was the absolute property of the appellant and that it was so considered by all the parties and especially his father; that during the fall of 1929 after the machinery and press were placed on the premises the appellant employed his uncle, J.S. Smith, to manage the gin that fall. W.T. Smith owned the boiler and engine and the lease; the appellant owned the press and all the gin machinery; but appellant expected to go to Mississippi State College that fall so he employed J.S. Smith to manage the gin and there was a working agreement between W.T. Smith, the appellant and J.S. Smith by which they would split the profits from the ginning season equally between them. W.T. Smith aided some in and about the gin but J.S. Smith was in full charge, did the hiring, and management in all respects, and it was distinctly understood and agreed between the three parties that W.T. Smith had no interest whatever in the property owned by the appellant; the appellant had no interest whatever in the property owned by W.T. Smith; and J.S. Smith had no interest whatever in the property of either, but their arrangement was strictly a working agreement which did not involve in any way whatever the title to any of the property, and there was no attempt to mislead anyone about this arrangement or about the title to the property. There is nothing wrong about an arrangement of this kind and no one can complain.
W.T. Smith could not bind the property of appellant because the record shows without any contradiction that he had no authority, express or implied, to bind the property of the appellant. The bank was not misled into believing that appellant's property was being given as security because the absolute proof shows that they did not know that there was any new machinery on the lands at that time, and they intended to take and did take the same security in the second trust deed as was given in the first trust deed; and if the bank was not misled it could not complain, and therefore the appellee, who stands in the shoes of the bank, could not complain.
Scottish-American Mortgage Co. v. Bunkley, 88 Miss. 641, 41 So. 503.
Estoppel operates only in favor of one who in reliance upon the act, representation or silence of another, so changes his situation as that injury would result if the truth were shown.
Davis v. Butler, 91 So. 279, 128 Miss. 847; Hart v. Foundry Co., 17 So. 769, 72 Miss. 830; 21 C.J. 1120.
There were no acts or representations of the appellant or anyone for him, and neither could the bank have been misled by the silence of the appellant for the appellant did not know that the bank claimed any interest in his property whatsoever, and as a matter of fact the bank did not change its position because of any silence or representation or act of the appellant or anyone else for him.
The description in the trust deed which appellee claims gives them a mortgage on appellant's property was nothing more than a mistake between the parties and the mistake was mutual and did not mislead anyone and was a recital of a matter of fact, and particularly the recital did not mislead the bank; and in speaking of such recitals, 21 C.J. 1090 cites as follows: "Such recitals do not bind mere strangers or those who claim by title paramount to the reciting deed."
21 C.J. 1101.
It is obvious that a mortgagor can convey by mortgage only that interest which he posesses.
39 C.J. 428; Titusville Iron Co. v. New York, 207 N.Y. 203; Polle v. Rouse, 73 Miss. 717.
Appellant thinks that the lower court is manifestly wrong in rendering a decree against the appellant in holding that the property in controversy is the property of W.T. Smith, and that the trust deed held by the appellee is a first lien on the gin machinery, press and lease, which was the property of appellant and which has since been sold to S.C. Wilbanks and J.E. Calvery; and in further authorizing G.C. Taylor to foreclose trust deed on the said property; and that the decree of the lower court should be modified so as to require the appellant to pay only the proportion of the amount of the judgment for $250.00 on bond for rent.
Chester L. Sumners, of Corinth, for appellee.
Findings of fact in equity case will not be disturbed on appeal unless clearly erroneous.
Heard v. Cottrell, 56 So. 277, 100 Miss. 42; Lott v. Hull, 61 So. 421, 104 Miss. 308; Lee v. Wilkinson, 62 So. 275, 105 Miss. 358; Bland v. Bland, 62 So. 641, 105 Miss. 478; Grace v. Purce, 90 So. 590, 127 Miss. 831, 21 A.L.R. 1035; Crump v. Tucker, 115 So. 397, 149 Miss. 711; Gulf Transp. Co. v. Fireman's Fund Ins., 83 So. 730, 121 Miss. 655, 9 A.L.R. 1307; Barry v. Mattocks, 125 So. 554, 156 Miss. 424.
The purported gift of land by W.T. Smith, Sr., to his son, Theodore Smith, in 1924, was not a legal and valid gift either in fact or law.
12 R.C.L. page 932, sec. 10, and page 936, sec. 13; McClellan v. McCauley, 158 Miss. 456, 130 So. 145.
In all gifts, one of the essential elements is that the gift must be irrevocable. Can it be contended that gift alleged to have been made by Tom Smith in 1924 to his fifteen year old son was irrevocable? What act or deed or word of acceptance on the part of the donee? Could this fifteen year old son have sued his father and recovered the land as a gift between the years 1924, the year of the alleged gift, and 1926, when the land was sold? Could Theodore Smith in 1926 set aside the sale on the ground that it was his land and that he did not join in the deed? Can it be argued that at any time from 1926 until long after December, 1929, that Theodore Smith could have sued his father for the $4000.00 proceeds of the land and recovered in a court of law or equity?
Counsel for appellant argues with reference to the money deposited in the Corinth Bank and Trust Company by Tom Smith in the name of W.T. Smith, Jr. But he is faced with the proposition that such deposit was not a revocable gift. Not only did he retain the control to withdraw the money, but he actually withdrew every cent of the money, and not one check was ever written by Theodore Smith on the funds.
Yates Estate v. Alabama-Miss. Conference Assn., 179 Miss. 642, 176 So. 534.
With Tom Smith remaining in control of the land, the gift was not only revocable, but void under the statute of frauds, Section 3343, Subsection (c), Mississippi Code of 1930.
12 R.C.L. 939, sec. 16.
The alleged sale of the gin and machinery or interest therein by Tom Smith to Theodore Smith in 1929 was void as to the First National Bank.
Comstock v. Rayford, 20 Miss. 369; Johnston v. Dick, 27 Miss. 277.
Under Section 3345 of the Mississippi Code of 1930 Theodore Smith cannot claim title to the machinery against the First National Bank and its assignees or any creditor of Tom Smith's.
It is our contention that the record shows that the defendants, appellant, violated about every section of the Code on statutes of frauds. They begin with an oral trust in land in violation of Section 3348. They follow with trades, transfers and agreements, none of which are in writing, all existing in the "intentions" of the members of the family, but unknown even to their business associates. The physical possession of the property, including the gin, remains in Tom Smith. This is held out to the world. The books and gin account are run in the name of Mrs. M.A. Smith. The secret title is alleged to be in the son, Theodore Smith. On the face of the record, taking the direct and positive evidence, along with every reasonable and equitable inference from the actions of the parties, we submit that the findings and decision of the Chancellor should be affirmed.
Argued orally by N.S. Sweat, for appellant, and Chester L. Sumners, for appellee.
This suit was filed by G.C. Taylor on notes purchased from the First National Bank of Corinth, Mississippi, and as assignee of judgments and mortgage securing the same, and against J.S. Smith, Mrs. Amanda Smith, E.C. Smith and W.T. Smith on said notes and judgments, and against W.T. Smith, Jr., S.C. Wilbanks and J.E. Calvery, asking that certain gin machinery, etc., which was claimed to be subject to a deed of trust executed by W.T. Smith to the First National Bank of Corinth to secure a certain indebtedness therein mentioned; which indebtedness and deed of trust were assigned by the receiver of the First National Bank to the said G.C. Taylor. The Complainant asked that a decree be rendered, giving the said Taylor a judgment against J.S. Smith, Mrs. Amanda Smith, E.C. Smith, and W. T. Smith on all the notes and judgments sued on, and that the property described in the deed of trust, including the property claimed by the said W.T. Smith, Jr., S.C. Wilbanks and J.E. Calvery, be held as security for all the said indebtedness of W.T. Smith, Sr., and that a receiver be appointed to take charge of the gin machinery in question, pending the final disposition of the suit.
By agreement of counsel, W.T. Smith, Jr., executed a bond for rent of the property in controversy in lieu of appointment of a receiver, pending the final disposition of the cause. Upon the hearing a decree was rendered in favor of G.C. Taylor in all matters prayed for in his bill of complaint, from which decree W.T. Smith, Jr., appeals. S.C. Wilbanks, J.E. Calvery, W.T. Smith, Sr., J.S. Smith, Mrs. Amanda Smith and E.C. Smith did not appeal, but waived process, and appear in this Court.
W.T. Smith, Jr., the appellant in this case, claims that the gin machinery and press located upon the leased premises, and embraced in a deed of trust given by W.T. Smith, Sr., to the bank to secure his indebtedness to the bank, belongs to him. Some years ago W.T. Smith, Sr., owned a certain tract of land which he and W.T. Smith, Jr., claimed he had verbally given to the latter, the said W.T. Smith, Sr., at that time being solvent, owing no debts and having other property amounting in value to $6,000, including his homestead.
The purpose of the verbal gift, as W.T. Smith, Sr., and W.T. Smith, Jr., testified, was that the latter wished to farm, not then desiring to go to college. W.T. Smith, Sr., had a daughter, sister of W.T. Smith, Jr., who had finished college, and there were five other children of his to whom no property appears to have been given. No deed to this property was ever executed, but thereafter, prior to the giving of the deed of trust, W.T. Smith, Sr., sold the property for $4,000, and placed the money in the bank in the name of W.T. Smith, Jr., it being claimed that W.T. Smith, Jr., had changed his mind and decided to go to college. There was no pass book, or evidence of any kind, that the deposit had been delivered to W.T. Smith, Jr.; and the money thereafter was checked out in part by W.T. Smith, Sr., it being contended that W.T. Smith, Jr., gave him permission to sign the check, drawing on the funds in the bank which had been deposited in the name of the latter, this being a loan from W.T. Smith, Jr., to W.T. Smith, Sr. Some of the money in the bank was used in paying the college expenses of W.T. Smith, Jr.
W.T. Smith, Sr., obtained a lease to certain land on which was a boiler and engine, part of a gin which had burned down. J.S. Smith, brother of W.T. Smith, Sr., had practical knowledge and experience in the operation of gins, so they decided to buy a gin and press, the money for the purchase of which was drawn from the sum deposited in the bank to the credit of W.T. Smith, Jr.; the latter claimed to be the purchaser thereof, the gin and press being bought from a gin company, in Birmingham, Alabama, W.T. Smith, Sr., W.T. Smith, Jr., and J.S. Smith being present when this property was purchased.
Subsequent to this transaction the deed of trust was given by W.T. Smith, Sr., the security being the lease, and the boiler, engine and other machinery on the land; there being upon the leased premises at the time the gin and its appurtenances involved here.
We think the evidence in the case produced before the Chancellor was sufficient to warrant him in finding that the property was, in fact, the property of W.T. Smith, Sr. No conveyance was alleged to have been given W.T. Smith, Jr., by his father, W.T. Smith, Sr., and the title to the land never passed to the former.
By section 2111, Code of 1930, it is provided that, "An estate of inheritance or freehold, or for a term of more than one year, in lands shall not be conveyed from one to another unless the conveyance be declared by writing signed and delivered." This statute is different from the statute of frauds, which provides to the like effect that no action shall be brought, etc., for lands, unless the contract be in writing, signed and delivered — consequently there was no estate in the land passed by a verbal gift.
By section 3348, Code of 1930, under the statute of frauds, it is provided: "Hereafter all declarations or creations of trusts or confidence of or in any land shall be made and manifested by writing, signed by the party who declares or creates such trust, or by his last will, in writing, or else they shall be utterly void; and every writing declaring or creating a trust shall be acknowledged or proved as other writings, and shall be lodged with the clerk of the chancery court of the proper county to be recorded, and shall only take effect from the time it is so lodged for record; but where any trust shall arise or result, by implication of law, out of a conveyance of land, such trust or confidence shall be of the like force and effect the same as it would have been if this statute had not been passed."
So there was neither title to the land, nor trust therein created in conformity to these statutes. We think the mere depositing of the money in the bank in the name of W.T. Smith, Jr., by W.T. Smith, Sr., with no further action, was ineffective to constitute a gift. Furthermore, there was sufficient evidence to show that W.T. Smith, Sr., retained control of such deposit, checked against it, and used the money. It is true that he and his son testified that the latter, in specific cases, consented to the drawing of such checks by W.T. Smith, Sr. But there was never a compliance with the law requiring that there must be a delivery to constitute a valid gift of chattels.
Without enlarging upon the evidence, we think it was sufficient to justify the Chancellor's finding, and the judgment is affirmed.
Affirmed.