Clark v. Young

Bill in the nature of bill of interpleader filed by appellant Clark as the administrator of the estate of Cora E. Hunter, against Annie Lou Young and the State National Bank, a corporation, seeking to settle the adverse claims of the complainant and Annie Lou Young to a certificate of deposit issued by said Bank, representing an indebtedness of $7,650 including interest. Said certificate of deposit is in the following words and figures:

"Certificate of Deposit "State National Bank "Due June 23, 1943 No. 2106 "Falkville, Ala., June 23, 1942 This Certifies that Mrs. Cora E. Hunter has deposited in this Bank $7,500.00 Seven Thousand Five Not Hundred and no/100 Dollars Payable to Mrs. Cora E. Subject Hunter or Mrs. Annie Lou Young or Survivor 12 months to after date, on the return of this Certificate Check properly endorsed, with interest at the rate of 2 per cent, per annum, interest then to cease.

The Banking Act of 1933 provides that this Certificate may not be cashed before maturity and that no interest be paid after maturity.

"V. O. Clark Manager "Not Subject to Check'

"Not Subject to Check"

The appellant claimed the certificate of deposit, which came into his possession as administrator of the estate of Cora E. Hunter, deceased, on her death, as the personal representative of said Hunter. Mrs. Young claimed the certificate, — as a gift inter vivos; as a gift causa mortis, or as joint deposit — constituting a contract, vesting in her the right of survivorship.

The circuit court denied her claim on all of said theories, except the last, holding that her right of survivorship was created by contract.

From that decree the administrator has appealed. Rule 36, Equity Practice, succeeding § 10390 of the Code of 1923, authorized the course of procedure taken by the parties. Code 1940, Title 7, Appendix, page 1081.

The statute, Code 1940, Title 5, § 122, provides: "No certificate of deposit, issued by a banking corporation or trust company for any special deposit for which interest is to be paid, must be reissued but, on the return thereof, must be cancelled."

In the light of this statute, each such deposit rightfully made stands on its own footing, unhampered by previous dealings between the parties in respect to the money rightfully deposited. There is no question that the money deposited belonged to Mrs. Hunter, or that she had the right to deposit the same, as she did.

The legal effect of the transaction evidenced by certificate No. 2106, of date June 23, 1942, was a loan of money by Mrs. Hunter to the bank, vesting the title to the money — the $7,500 — in the bank, creating the relation of debtor and creditor, and the certificate which partakes of the nature of a promissory note is a chose in action, evidencing the right of its owner, at the due date thereof, upon proper indorsement and surrender to call the loan. 7 Am.Jur. 316, § 445; Blakey v. Brinson, 286 U.S. 254, 52 S. Ct. 516, 76 L. Ed. 1089, 82 A.L.R. 1288; Mierke v. Jefferson County Sav. Bank, 208 N.Y. 347,101 N.E. 889, 46 L.R.A., N.S., 194, Ann.Cas. 1914D, 21; Renfro Bros. v. Merchants Mechanics' Bank, 83 Ala. 425, 3 So. 776.

We concur in the conclusion of fact stated in the decree of the circuit court (which the reporter will reproduce in the report of the case). At no time prior to the death of Mrs. Hunter, or since, has the claimant Mrs. Young acquired any vested interest in or right to possession of said chose in action. As to it Mrs. Hunter died intestate and the legal title passed to and vested in her personal representative. In this controversy between the administrator, the adverse claimant and the depository bank, the administrator represents the interest of the estate, including that of distributees, who may be proper parties, but are not necessary parties to the proceeding. Sovereign Camp, W. O. W., v. Snider, 227 Ala. 126,148 So. 831; Burt et al. v. Brandon, 230 Ala. 85, 159 So. 691.

Under the facts stated in the decree, Clark, the custodian of the key to Mrs. Hunter's box, was Mrs. Hunter's agent, and there was no evidence showing delivery of the certificate in Mrs. Hunter's lifetime to Mrs. Young. Mrs. Young had no connection with the transaction evidenced by certificate of deposit No. 2106 and knew nothing about it. On principles stated in Smith v. Eshelman, 235 Ala. 588, 180 So. 313, Mrs. Young did not acquire the title to the chose by gift.

To support a claim under the contract theory there must have been a joint ownership and, in the absence of such vested interest during the life of the depositor, the right of survivorship does not exist. First Nat. Bank of Birmingham v. Lawrence, 212 Ala. 45, 101 So. 663.

Cases cited by appellee wherein a joint account was maintained on which both parties had the right to check, or a joint savings account to which both parties contributed showing a vested interest in both parties, are inapt as authorities to sustain the decree. Cases in that class cited and relied on by appellee are Deal's Adm'r v. Merchants Mechanics' Sav. Bank of City of Norfolk, 120 Va. 297, 91 S.E. 135, L.R.A.1917C, 548; Kelly v. Beers, 194 N.Y. 49, 86 N.E. 980, 128 Am. St. Rep. 543; Malone v. Sullivan et al., 136 Kan. 193, 14 P.2d 647, 85 A.L.R. 275. In the last cited case, on which appellee most strongly relies, the account was opened in the name of both women, Amy Malone and Annie Williams, and Williams the survivor had theright to check on the joint account during the life of Malone. Moreover, the Revised Statute of Kansas provided (Rev.St. 1923, 9-173): "When a deposit has been made, or shall hereafter be made, in any bank or trust company transacting business in the state, in the names of two persons, payable to either, or payable to either or the survivor, such deposits or any part thereof, or any interest or dividend thereon, may be paid to either of said persons whether the other be living or not; and the receipt or acquittance of the person so paid shall be valid and sufficient to release and discharge the bank for any payment so made." 85 A.L.R. 277, 278.

The decree of the circuit court in so far as it awards the certificate of deposit No. 2106, of date June 23, 1942, described in the bill to Annie Lou Young, is reversed and annulled, and one will be here rendered ordering, adjudging and decreeing that said certificate of deposit is the property of the estate of Cora E. Hunter, the legal title to which is in the appellant, V. O. Clark, as the administrator of her estate, for the purposes of administration.

The decree of the circuit court in so far as it allowed and fixed a solicitor's fee of $500 to be paid the solicitor of the State National Bank is not questioned, and in that respect the decree is affirmed, and the Bank is authorized to deduct that sum for the use of its solicitor, Harris, and pay the balance thereof to the administrator upon the presentation of the certificate of deposit duly endorsed by him as administrator, and such payment shall be in full of its liability.

The costs of the appeal and of the case will be taxed against Annie Lou Young, with issue of execution for their collection.

Reversed and rendered in part, and in part affirmed.

GARDNER, C. J., and LIVINGSTON and SIMPSON, JJ., concur.

On Rehearing.