Brown v. Crafts , 98 Me. 40 ( 1903 )

Peabody, J.

This is an action of debt on a probate bond commenced in the name of Calvin W. Brown, Judge of Probate for the County of Piscataquis, State of Maine, against Arthur A. Crafts, executor of the will of John H. Eveleth, late of Greenville, in said county, deceased, testate, and, American Surety Company, surety on his official bond, by Hattie Eveleth, widow of the testator. It is before the law court on report.

The testator died on the seventh day of November, 1899, leaving a widow, Hattie Eveleth, and Rebecca W. Crafts, a daughter by a former wife. The will was admitted to probate on the eighth day of January, 1900, and within six months thereafter the widow waived the provision made for her and claimed her right and interest by descent in her husband’s estate. The defendant, Arthur A. Crafts, husband of Rebecca W. Crafts, was appointed executor of the will and gave bond to the judge of probate, the predecessor of the nominal plaintiff. He returned an inventory of the estate to the Probate Court within the time required by law, which included improved real estate, $34,120; wild land, $40,960.50; goods and chattels, $9,879.93-; and rights and credits, $34,798.24.

The basis of the suit is the breach of the condition of the executor’s bond by his failure to include in his inventory certain stocks, bonds and mortgages specified in the plaintiff’s replication, amounting at their face value in the aggregate to $65,673.33, and of the market value of about $60,000. This property belonged to the deceased prior to June 12, 1898, and constituted part of his estate at his death unless the title thereto passed to his daughter by gift. It was in his possession at the time of his death and was afterwards delivered by his executor to his daughter, who claimed it under deed of gift from the deceased, dated June 11, 1898, signed on the following day.

It appears that the testator, four days after the execution of his will, without the knowledge of his wife or daughter caused to be prepared two written instruments, one a bill of sale or assignment, by which he sought to transfer the property in controversy to his daughter; the other, a power of attorney under which he was to receive the property and during his life to manage, control and have the use and income of the same and the right to pledge it for his personal debts, or to sell it as he might deem necessary to pay any indebtedness he might have, using the same as though it were his own property.

His daughter, Rebecca W. Crafts, was then called and his intention to give her this property disclosed to her; and the papers were executed consecutively by himself and his daughter with all the formalities required in the transfer of personal property. Upon signing the bill of sale he delivered the stocks, bonds and mortgages described therein to the donee, who received them and at his request compared them, item by item, with the schedule; and she in turn signed the power of attorney and redelivered the property to the donor to be by him retained and used in accordance with its terms.

So far as appears by the report, there is but one rational explanation for the execution of these papers. Eveleth was forty years older than his wife, and while nothing appears to indicate that the marriage relation was not usually harmonious, his wife had in their discussions in reference to the disposition of his property made threats that she meant to get all she could out of the estate when he got through with it. He communicated this fact to his attorney when seeking 1ns advice in regard to the validity of the disposition of this property by gift to his daughter under the bill of sale and the conditions by which he was to retain the control and enjoyment of it during his life under the power of attorney.’

The validity of the transaction is called in question by the plaintiff in interest upon two grounds:

1. That it was not a completed gift.

2. That it was a disposition of personal property intended to deprive his wife of her distributive share, and was consequently, as to her, by law fraudulent and void.

Gifts to children are favored by the policy of the law. Love v. Francis, 63 Mich. 181, 6 Am. St. Rep. 290; Betts v. Francis, 30 N. Y. 152; Nichols v. Edwards, 16 Pick. 62. The delivery of this property was not incomplete by reason of lack of formal indorsement or assignment of the certificates of stock, bonds or notes. The gift of these choses in action could have been completely executed by simple delivery with the intent at oiice to pass the title. Reed v. Copeland, 50 Conn. 472; Wing v. Merchant, 57 Maine, 385; Grover v. Grover, 34 Pick. 261, 35 Am. Dec. 319; Com. v. Crompton, 137 Pa. 138; Watson v. Watson, 69 Vt. 243; Larrabee v. Haseall, 88 Maine, 511, 518, 51 Am. St. Pep. 440.

The debatable ground is the. intent with which the formalities were observed and the limitation defined by the law of wills. Under the instrument signed by the donor there lacked no element of perfect execution of the gift, but there was a manifest mental reservation by him, which had already been embodied in an instrument prepared at the same time as the deed of gift, and at his virtual request it was immediately executed by the donee. It is a significant fact that the husband of the donee, who was also the confidential clerk of the donor, knew of the preparation of both papers and was present as a witness when they were executed.

It may well be doubted whether it was legally in the power of the donee under the circumstances to have accepted the gift made to her under the formalities which attended it without executing the power of attorney which gave to the donor the control of the property during his life. If not actually advised as to the intention of the donor when she received the property, she was not left in doubt for any determinate time. What was done by the donor and donee was one and the same transaction. We think the delivery of the property was incomplete. It was colorable, not real. This attempted transfer, having the semblance of a gift but the substance of a will, was nugatory. The dominion which the donor retained over the property during his life was as full as if the disposition had been by will; and the rights and enjoyment of the donee were postponed until his death. It appears that subsequently to the date of the bill of sale, in pursuance of legal advice received by John H. Eveleth on the subject of the gift to his daughter, she received the key to the safe in which the property was deposited and temporarily took it into her possession; but this does not in our view change the nature of the original transaction. It tended ratlier to disclose its character as not being bona fide. The letter of the donor to the donee, advising this course and reiterating the fact that the property was hers, was simply artificial evidence created for the purpose of proving the execution of the original gift.

In Buswell v. Fuller, 156 Mass. 309, the payee of a note undertook to give the maker, his daughter in law, the principal and retain the interest. He passed the note to her which she took, but the payee said he would like to have it to indorse payments of interest. It was returned to the payee who retained it. The court say that “a mere oral gift, without a complete transfer of the thing given, such that the giver no longer retains control of it, is ineffectual to pass a title.” . . . “If the plaintiff's testator undertook to give the defendant the principal of the note and to retain the interest during his life and kept possession of the note for the purpose of having a claim for his interest, his attempted gift was a nullity.” In Shurtleff v. Francis, 118 Mass. 154, certain assignments of mortgages were delivered by a father to his son at the dates of their acknowledgments, with instructions to put them on record in case he died before the son. They were deposited in a safe to which both had access. The court say that “it was not the intention of the parties to transfer the property to the plaintiff during the life of his father, but that the purpose of the transactions was that the transfer of the property should not take effect until after his death, a purpose which could not be carried into effect because of the statute of wills.” In Young v. Young, 80 N. Y. 422, 36 Am. Rep. 634, a father attempted to give bonds to each of his two sons. They were placed in separate envelopes with an indorsement that- “the interest to become due thereon is owned and reserved by me so long as I shall live; at my death it belongs absolutely and entirely -to them and their heirs.” It was held that there might be a valid gift in presentí by an instrument securing payment of money, reserving to the donor the accruing interest, but if the donor retained the instrument for the purpose of collecting the interest himself, there is an absence of complete delivery.

The courts in this State have given liberal construction to language and attendant circumstances in upholding a trust where the essential element of declaration could be fairly inferred. Northrop v. Hale, 73 Maine, 66. But an intended gift cannot be enforced as a trust. Norway Savings Bank v. Merriam, 88 Maine, 146; Bath Savings Institution v. Hathorn, 88 Maine, 122, 51 Am. St. Rep. 382, 32 L. R. A. 377.

Having reached this conclusion sustaining the first point raised against the validity of the gift, it is not necessary to decide the second point.

The title to the property remained in the deceased and it should have been included in the inventory of the' executor. The avails of this suit belong to the estate, and the executor should charge himself with the same in his account.

Defendants defaulted. Case to be retained at nisi prius for further proceeding in Probate Court, in accordance with this opinion. If the executor shull charge himself in his account with the value of the property claimed to have been given to Rebecca W. Crafts, within such time as may be fixed by the judge of probate, no execution to issue except for costs; otherwise such further order to be made at nisi prius as the case may require.