Opinion
No. 37952.
November 12, 1942. Motion for Rehearing or to Transfer to Banc Overruled, January 4, 1943.
CERTIORARI: Trusts: Gifts: Notation on Securities in Safe-Deposit Box of Deceased: Opinion of Court of Appeals in Conflict. The deceased, Mrs. Carroll, had a slip prepared and attached to a bond, reading: "This $1000 Springfield City Water Company bond, No. M-1638, is the property of George H. Idle." Similar slips were attached to other bonds naming other individuals. These bonds, with the attached slips, were placed in the safedeposit box of the deceased, where they were found after her death. The opinion of the Court of Appeals holding that trusts were created in favor of the respective named persons is in conflict with opinions of the Supreme Court holding that the title remains in the estate of the deceased.
OPINION OF COURT OF APPEALS QUASHED.
O.J. Page and Coltrane Coltrane for relator.
(1) The decision of the Springfield Court of Appeals in this case under the facts set out by that court in its opinion is in direct conflict with the last controlling decision of this court in the following case: Cartall v. St. Louis Union Trust Co., 153 S.W.2d l.c. 377. (2) The Court of Appeals by adopting the memorandum opinion says: "What did Mrs. Carroll intend by the writing placed upon the bond . . . If it was intended for a gift, it must fail for want of proof of delivery. If she intended it as a testamentary disposition, it must fail because not disposed of in the manner and under the form required by law for wills. If she intended it neither as a gift nor as a testamentary disposition, then she must have intended to create a trust in substance," etc. The court, after declaring "there is no case decided by the Courts of Missouri parallel to and decisive of the question involved in this case," further says: "The Court is not bound by authorities cited from other jurisdictions but may yield to what it conceives to be the better reasoning." This holding is in direct conflict with the controlling decision of this court in the following case: Sell v. West, 125 Mo. l.c. 631; 1 Pomeroy's Eq. Jur. (3rd Ed.), sec. 47; because a court of equity has no more right to steer its course by crude notions of what is right in a particular case, than has a court of law. (3) The court in following the finding of the trial court upholds an intended gift, which is imperfect for failure of a delivery, by enforcing it as a trust, and in doing so, the opinion and decision of the court, is in conflict with the latest decisions of the Supreme Court, which hold that equity will not declare the transaction as equivalent to a declaration by the would-be donor to hold the property in trust for the donee, even though there may be a meritorious consideration of kinship. Cartall v. St. Louis Union Trust Co., 153 S.W.2d 370; Pitt v. Weakley, 155 Mo. l.c. 134; Goodman v. Crowley, 161 Mo. 657; Knapp v. Publishers, George Knapp Co., 127 Mo. 53; Pennell v. Ennis, 126 Mo. App. 355. (4) The memorandum opinion states that if it was intended for a gift, it must fail for want of proof of delivery; that if she intended it as a testamentary disposition, it must fail because not disposed of in the manner and under the form required by law for wills; that if she intended it neither as a gift, nor as a testamentary disposition, then she must have intended to create a trust in substance, not having knowledge of the technicalities of the matter as to how to create a trust, or she must have not intended that it should have any effect. This is in direct conflict with the latest decisions of the Supreme Court, which provide that the burden of proof is upon plaintiff to show by clear, unequivocal and convincing evidence that there was a trust and the existence of every element essential to a complete trust. Cartall v. St. Louis Union Trust Co., 153 S.W.2d l.c. 372; Harding v. St. Louis Union Trust Co., 276 Mo. 136, 207 S.W. 68; Northrip v. Burge, 255 Mo. l.c. 654; Foley v. Harrison, 233 Mo. l.c. 583; Ambruster v. Ambruster, 326 Mo. 51. (5) 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." Cartall v. St. Louis Union Trust Co., 153 S.W.2d 370, quoting from, In re Estate of Soulard, l.c. 622. (6) The language used must show a clear intention to create a trust and the terms of the trust should be sufficiently declared. Cartall v. St. Louis Union Trust Co., 153 S.W.2d l.c. 377, last controlling case of this court quoting, In re Estate of Soulard, 141 Mo. l.c. 664; and continuing as follows: Elliott v. Gordon, 70 F.2d 9. (7) 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. Cartall v. St. Louis Union Trust Co., 153 S.W.2d l.c. 377, citing as follows: Elliott v. Gordon, 70 F.2d 9; Citizens Natl. Bank v. McKenna, 168 Mo. App. 254, 153 S.W. 521. (8) Statements, written or oral, made by the alleged settlor to the effect that the bond "belonged" to plaintiff or was "the property of" plaintiff, are not sufficient evidence on which to predicate a claim that the alleged settlor held the bond in trust for the plaintiff. Cartall v. St. Louis Union Trust Co., 153 S.W.2d l.c. 376; Trautz v. Lemp, 329 Mo. 580, 46 S.W.2d 135; Elliott v. Gordon, 70 F.2d 9; Young v. Young, 80 N.Y. 422, 36 Am. Rep. 634; Beck v. Staudt, 133 N.Y.S. 529, affirmed 208 N.Y. 566, 101 N.E. 1095. (9) Mrs. Carroll did not lose her dominion over the bond by depositing it in a box held jointly by her and another. Trautz v. Lemp, 329 Mo. 580, 46 S.W.2d 135; Bauernschmidt v. Bauernschmidt, 97 Md. 35, 54 A. 637; Albrecht v. Slater, 233 S.W. 8. (10) The judgment or decree appealed from cannot be affirmed upon the theory that Mary J. Carroll during her life created a trust in the bond in controversy here for the use and benefit of plaintiff because the record and the evidence fail to support such a theory. Cartall v. St. Louis Union Trust Co., last controlling case; Elliott v. Gordon, 70 F.2d 9; Eschen v. Steers, 10 F.2d 739; Goodman v. Crowley, 161 Mo. 657; Pennell v. Ennis, 126 Mo. App. 355; Citizens Natl. Bank v. McKenna, 168 Mo. App. 254; In re Smith's Estate, 144 Pa. 428, 22 A. 916; Young v. Young, 80 N.Y. 422; 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. (11) 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 her death. There were no declarations of a trust, transferring equitable titles and creating and defining the interests and powers of the parties. Cartall v. St. Louis Union Trust Co., last controlling case; Elliott v. Gordon, 70 F.2d 9; Eschen v. Steers, 10 F.2d 739, discussing the Missouri cases and law; Citizens Natl. Bk. v. McKenna, 168 Mo. App. 254, 153 S.W. 521; Mulloy v. Charlestown Five Cents Sav. Bk., 285 Mass. 101, 188 N.E. 608. (12) 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 personal property 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. Cartall v. St. Louis Union Trust Co., 153 S.W.2d l.c. 377; Harris Banking Co. v. Miller, 190 Mo. 640, 89 S.W. 629; In re Soulard Estate, 141 Mo. 642, 43 S.W. 617; Pennell v. Ennis, 126 Mo. App. 355, 103 S.W. 147.
Andrew J. Murphy, Jr., Edward A. Glenn and Farrington Curtis for respondents.
(1) On certiorari to quash the opinion of a Court of Appeals on the ground of conflict of opinion, the Supreme Court's only province is to determine whether there is a conflict with Supreme Court rulings, and it is not within the court's province to determine whether the Court of Appeals erred in its application of the rules of the law to the facts stated in its opinion, but only whether upon those facts it announced some conclusion of law contrary to the last previous ruling of this court upon the same or a similar state of facts. Houts Mo. Pleading and Practice Ann., secs. 1404, 1411; State ex rel. Continental Ins. Co. v. Reynolds, 290 Mo. 362, 235 S.W. 88; State ex rel. Kroger v. Hostetter, 98 S.W.2d 683; State ex rel. St. Louis-S.F. Ry. Co. v. Haid, 37 S.W.2d 437; State ex rel. Brenner v. Trimble, 32 S.W.2d 760; State ex rel. Harrington v. Trimble, 31 S.W.2d 783; State ex rel. Valentine Coal Co. v. Trimble, 28 S.W.2d 1028; State ex rel. Jones v. Robertson, 172 S.W. 21. (2) The opinion of the court below, as well as the opinions in all relevant cases cited by relator quote with approval the rules and test laid down in the cases of In re Estate of Soulard, 141 Mo. l.c. 664, and Northrip v. Burge, 255 Mo. 641, l.c. 654, 164 S.W. 584, as follows: Three things are necessary to raise a trust: First, a declaration of an estate or interest containing all of the essential elements of the trust; Second, a definite subject matter of the trust; Third, a definite object or beneficiary of the trust. It is found, upon analysis, that each and every case cited, including the decision of the court below, turned upon the application of this rule and test to the facts presented in that case. The opinion of the court below is consistent with and does not conflict with any case decided by the Supreme Court, when the facts of those cases are examined in the light of the tests above. (3) The opinion is not in conflict with Cartall v. St. Louis Union Trust Co., 153 S.W.2d 370. (4) The opinion is not in conflict with Pitts v. Weakley, 155 Mo. 109; Knapp v. Publishers, George Knapp Co., 127 Mo. 53; Harding v. St. Louis Union Trust Co., 276 Mo. 136, 207 S.W. 68; Ambruster v. Ambruster, 326 Mo. 51, 31 S.W.2d 28; Goodman v. Crowley, 161 Mo. 657; Foley v. Harrison, 233 Mo. 460; Sell v. West, 125 Mo. l.c. 631.
Certiorari to review the Springfield Court of Appeals' opinion in Idle v. Union National Bank of Springfield et al., 156 S.W.2d 941. The question is whether the ruling there made that Mary J. Carroll (since deceased) created a gratuitous trust in favor of George H. Idle with respect to a certain bond conflicts with previous rulings of this court. The Court of Appeals quoted and adopted the trial court's memorandum opinion, stating the trial court "went into all the facts in connection with the case, and discussed the law applicable." The essential facts follow:
In 1926 Mary J. Carroll rented a safety deposit box of the Union National Bank in the names of Roberts Carroll and Mary J. Carroll, either or the survivor; but Mrs. Carroll retained possession of both keys to said box and the sole control of its contents, to the exclusion of Roberts Carroll. On April 8, 1936, Mrs. Carroll received the bond involved from the Moody Investment Company, together with six others of like denomination, she having previously purchased them. "Shortly prior to the time Mrs. Carroll received said bonds from the Moody Investment Co., in April, 1936, she had asked the witness Dow about wills and disposition of property, saying she had some people she wanted to get some securities. Mr. Dow told her how he had been informed by a lawyer `to hand things over to someone else,' and the writing [hereinafter] referred to and attached to the bond was made to meet what he and she thought the requirements were." On said April 8th, Mrs. Carroll requested Mr. Dow to attach a certain writing prepared in her own hand [1086] to the bond. This manuscript, however, was thereafter typewritten, read by Mrs. Carroll, and at her request attached to the bond. It read: "This $1,000 Springfield City Water Company bond, No. M-1638, is the property of George H. Idle." Similar slips, declaring the individual bond to be the property of another named person, were attached to the other six bonds. Mrs. Carroll took possession of the bonds. She died May 14, 1936; and the bonds, with the typewritten slips attached and undisturbed, including the bond in suit, were found in her said safety deposit box. The opinion states: "The question then is what did Mrs. Carroll intend by the writing placed upon the bond after her conversation with Dow and the retention of the bond in her possession until her death."
The court concluded the transaction did not constitute a gift for want of delivery; observing, in one instance, that since Mr. Idle did not live in Springfield, Mrs. Carroll "could have had no opportunity to make any transfer of the bond to him other than what might have been effectuated by this writing"; and, in another instance, "we will presume [Mrs. Carroll] would have known how to hand the bond to George H. Idle or mail it to him."
The court also concluded the transaction did not amount to a testamentary disposition of the bond for want of compliance with the formalities connected with the execution of wills; observing "she [Mrs. Carroll] will be presumed to have had knowledge of how to make such disposition."
"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.'" In re Estate of Soulard, 141 Mo. 642, 664, 43 S.W. 617, 622; Harris Bkg. Co. v. Miller, 190 Mo. 640, 670, 89 S.W. 629, 637, 1 L.R.A. (N.S.) 790; Northrip v. Burge, 255 Mo. 641, 654(II), 164 S.W. 584, 586[5].
The court then considered that Mrs. Carroll intended to create a gratuitous trust in herself for the benefit of Mr. Idle. The court remarked that Mrs. Carroll "must have intended to create a trust in substance, not having knowledge of the technicalities of the matter as to how to create a trust"; that it is not necessary that "an expressed declaration of trust or that the word `trust' or `trustee' be used," it being "sufficient if it appears that the beneficial interest or the equitable property in the subject matter of the trust be vested in someone and the legal title of possession be vested in another or retained by the donor"; "that Mrs. Carroll wanted this bond to be George H. Idle's and did not want it to fall into the bulk of her estate not otherwise disposed of. A judgment declaring the trust to exist will not therefore do violence to her desire, but will be in accord with it."
The controversy here presented is on the sufficiency of the words employed to create a trust. Issues respecting a gift or a testamentary disposition or the subject and object of the alleged trustor's beneficence are not presented.
We agree with many of the observations made but are of opinion the conclusion reached conflicts with prior holdings of this court, among others, Cartall v. St. Louis Union Trust Co., 348 Mo. 372, 387[8, 9], 153 S.W.2d 370, 377[9, 10], stressed by the relator here. Respondents assert the cases are to be distinguished and that the portion of the Cartall case invoked by the relator is dictum. The facts in the instant case and the Cartall case are not identical, but they are sufficiently similar on the issue involved to require the application of the same rule as a matter of law. State ex rel. v. Shain, 340 Mo. 1195, 1201[1], 105 S.W.2d 915, 918[1-3].
In the Cartall case, Mrs. Cartall sought a judgment declaring her to be the owner of certain notes, payable to bearer, found, without identification marks, in Mr. Cartall's safety deposit box after his death on the theory, among others, of an express trust. Sufficient for the purposes of this review, there was evidence in the Cartall case that Mr. Cartall told the paying agent to list the notes in his wife's name on its records; that interest checks carried the endorsements of Mrs. Cartall and, thereunder, Mr. Cartall; and that statements were made by Mr. Cartall to the following effect and under the following circumstances: When asked to whom a certain interest check was to be made, Mr. Cartall replied: "Make that to Mary E. Cartall, they are her bonds." When asked again about a later interest installment, Mr. Cartall said: "I don't know what I have to do to make you people understand out there. . . . Those are my wife's bonds. Now, for heaven's sake, put them in her name and don't bother me about them; pay [1087] the interest to her. That should be final." (348 Mo. l.c. 381, 153 S.W.2d 1. c. 373.) With respect to the creation of a trust, we said: "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, 10 Cir., 70 F.2d 9, 11[1-6]; Eschen v. Steers, 8 Cir., 10 F.2d 739 (discussing the Missouri cases and law); Citizens' Nat. Bank 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." The evidence in the instant case established Mrs. Carroll's ownership of the bond. The writing — "This $1,000 Springfield City Water Company bond, No. M-1638, is the property of George H. Idle" — contains no words of conveyance. It does not indicate that Mrs. Carroll ever owned the bond. It does not declare Mrs. Carroll to be in possession for Mr. Idle's benefit. It does not vest an equitable title. It does not suggest that title was thereby conveyed to Mr. Idle and that Mrs. Carroll had possession in trust for his benefit. It does not suggest that Mrs. Carroll's position of owner had changed to that of trustee, or that Mr. Idle thereby first became vested with an interest in the bond. It merely recites a fact, the fact that Mr. Idle was the owner of the bond. Elliott v. Gordon, cited in the Cartall case, supra, considered the following endorsement on an envelope containing Liberty Bonds, the property of the endorser, found in a safety deposit box insufficient to create a trust:
"August, 1942
"These five $1,000.00 Fourth Liberty Bonds belong to Mrs. Kate Elliott, 3233 Tracy Ave Kan City Mo and are deposited in my box for safe keeping.
"G.A. Howerton.
"This Pkg $5,000.00 Fourth Lib Bonds Belong to Mrs. Kate Elliott 3233 Tracy Ave Kansas City Missouri."
The rule may be technical and work hardships in some cases; but it appears based upon a sound public policy. A contrary rule might result in greater and more frequent miscarriages of justice. For one to constitute himself a trustee of his own property, there should be some words of a conveyance, some expression of an intention to become trustee. If the policy requiring a delivery to effect a transfer of the title in certain instances be sound, it ought not be evaded by the simple device of calling the transaction a declaration of trust. The requirements prevent mere intentions becoming legally final and definitive. The instant facts materially differ from the facts in Re Estate of Soulard, 141 Mo. 642, 659(III), 43 S.W. 617, 621(3), and in Harris Banking Co. v. Miller, 190 Mo. 640, 663(II), 89 S.W. 629, 635(2), 1 L.R.A. (N.S.) 790. We find the remark in 1 Bogert, Trusts and Trustees, p. 585, n. 80, that a strained construction was indulged to arrive at a declaration of trust in the latter case.
Respondents' brief concedes the petition in the Cartall case pleaded the two theories — gift and trust — in the alternative. In Harris Banking Co. v. Miller, supra, the trial court held the transaction constituted a gift inter vivos. This we held was error. However, we affirmed the result reached by the trial court on the theory a trust existed, stating "the evidence was offered to sustain her [plaintiff's] right to the deposit in the alternative." (190 Mo. l.c. 667, 89 S.W. 1. c. 637.) So, too, in the Cartall case. The invoked ruling was not dictum.
Accordingly, respondents' opinion and the record made pursuant thereto are quashed. Westhues and Barrett, CC., concur.
The foregoing opinion by BOHLING, C., is adopted as the opinion of the court. All the judges concur.