Citation Numbers: 26 Misc. 2d 362
Judges: Epstein
Filed Date: 5/25/1960
Status: Precedential
Modified Date: 2/5/2022
Plaintiffs, Ethel Merker (widow of deceased Dr. Louis H. Merker) and five of her six children seek to impress constructive trusts for their benefit (and that of defendant Arthur Merker) on the proceeds of life insurance policies, United States Savings Bonds (and proceeds thereof) and proceeds of a joint checking account. The seventh cause of action, dealing with the last-named bank account was discontinued at the trial. Defendant Aaron Merker is a physician, younger brother and former employee of deceased. Defendant Arthur Merker was so joined because he refused to join as a party plaintiff. Deceased Louis H. Merker and Ethel Merker were married October 19, 1930. Between 1931 and 1942 six children were born to this apparently successful marriage. The last two are twins, now attending college. Dr. Louis H. Merker died November 4, 1957, shortly before his 56th birthday (born Dec. 25, 1901). He had practiced medicine since his licensing about June 25, 1925 and since June 25, 1936 had his younger brother, defendant Aaron Merker in his office as employee and associate (except for wartime service of latter). The total of the life insurance policies herein sought to be impressed with a trust on the proceeds collected amounts to $50,722.44. A younger brother of decedent, Harry Merker, dentist, was the primary beneficiary on four of the five policies involved herein. Said Harry Merker died in 1954 at the age of 33 years. Defendant Aaron Merker was only a secondary beneficiary. These life insurance policies had been the subject of separate insurance trusts up to August 5, 1940 when the last was executed. This last trust was revoked July 28, 1942. The proceeds had been theretofore allocated for the benefit of the children, mother, sisters and brothers of decedent. These trusts date back to 1931 and the proceeds were divided in different shares, from an even basis between widow, children and decedent’s parental family to a 60% to 40% basis. The right to change beneficiaries always rested with decedent, the insured, and he retained the policies (covered by the first, third and fifth causes of action).
On his death decedent possessed a total of $46,600 in United States Savings Bonds and Series Gr Bonds. The savings bonds were accumulated over a period of years between 1948 and 1957 in face amounts of $100 each and totalled $11,600. The Gr Bonds in the total of $35,000 comprised three $10,000 bonds and one $5,000 bond purchased between 1945 and 1949. In each of these
While there is evidence that decedent and his wife had at times quite vigorous arguments and disagreements; that at one time decedent may have distrusted his wife; the years of cohabitation, the purchase of a new home in Westchester County the year before his death, and the family life do not furnish any basis for a conclusion that decedent had lost his affection for his family. There is no doubt that decedent and his own parental family, with brothers and sisters enjoyed very close and warm
There is a sharp conflict in the testimony of the witnesses, all of whom have some interest to color their respective stories. The executors were squarely at swords points in their versions of conversations following death of decedent. The defendant Arthur Merker, who had refused to join as plaintiff, apparently resolved his uncertainty before the trial and testified for plaintiffs. His testimony, his obvious diffidence on the stand and his answers when given — these were not conducive to credibility. His testimony adduced little to a case based wholly upon questionable oral evidence in patent conflict. Suffice it to state that the testimony and evidence do not warrant the conclusion that constructive trusts be decreed on the proceeds of the insurance policies and United States Bonds.
The evidence in this case is insufficient to overcome the clear effect of the United States Treasury Regulations governing savings bonds. “ § 315.20. General, (a) No judicial determination will be recognized which would give effect to an attempted voluntary transfer inter vivos of a bond or would defeat or impair the rights of survivorship conferred by these regulations upon a surviving coowner or beneficiary, and all other provisions of this subpart are subject to this restriction.” (Code of Fed. Reg., tit. 31, § 315.20.) Section 24 of the Personal Property Law of New York State provides in effect that a beneficiary’s rights under United States Savings Bonds “ shall not be defeated or impaired by any statute or rule of law governing transfer of property by will or gift”. The cases are plentiful to support this conclusion (defendant’s Exhibit “U” is the Treasury Department Statement with a review of the law supporting the foregoing). This in itself, were the other evidence even stronger than it is revealed, would suffice to defeat the effort to fix constructive trusts on the proceeds
Plaintiffs contend that defendant Aaron Merker violated an oral agreement to apply the proceeds of the insurance policies to trusts for benefit of plaintiffs and Arthur Merker. The sole evidence of any credible character in support of this is presented by the several trusts established on the successive births of decedent’s children, ending with the revocation of the last trust on July 28, 1942. A highly intelligent and practical doctor, with experience in setting up trusts can hardly be charged with ignorance or temporary neglect in his later acts. Nor is there any evidence to support the charge of fraud or undue influence on deceased. The complaint, the bills of particulars and the evidence presented fail to furnish any basis for a definitive trust agreement between deceased and defendant Aaron Merker. “ No specific sum was required or agreed to be held, applied, or be turned over to any one individual plaintiff or to the defendant Arthur Merker ” (bill of particulars, par. “ Sixth ”, p. 5). (See Matter of Welwood, 88 N. Y. S. 2d 882, 884.) Nor can it be said that the designation of beneficiary in the life insurance policies is an 1 ‘ illusory transfer” (Mitchell v. Mitchell, 265 App. Div. 27, affd. 290 N. Y. 779; Personal Property Law, § 31, subd. 9).
Katzman v. Ætna Life Ins. Co. (309 N. Y. 197) presents an exception to the statute wholly distinguishable from the instant case.
The alleged ‘1 admissions against interest ’ ’ of Mordecai M. Merker and of defendant Aaron Merker are wholly inadequate — in fact the evidence thereon is unacceptable (Matter of Ennever, 116 Misc. 32; Matter of O’Donnell, 119 Misc. 580; 7 Wigmore, Evidence [3d ed.], p. 468; Matter of Myer, 184 N. Y. 54).
Judgment for defendant. Complaint dismissed.