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Gegan v. Union Trust Co. of New York

Supreme Court of New York, Appellate Division

December 11, 1908


Franklin Bartlett, for appellant.

Perry D. Trafford, for respondent.



The action is brought to obtain an adjudication that the defendant's testator in his lifetime declared and executed a trust in favor of plaintiff in 18 specified railroad bonds, and for the delivery of such bonds to the plaintiff. The trial resulted in a dismissal of the complaint upon the merits, and we think properly so. The plaintiff failed to produce the clear and satisfactory evidence which the law requires to establish a gift inter vivos, or that the defendant's testator made himself a trustee of the bonds for her.

John H. Drake, the defendant's testator, was a contractor with large business interests in the various parts of the country. His legal residence and that of his family was in the state of New York, but for several years before his death he maintained a household near the work in which he was engaged, principally, however, in the city of Philadelphia, Pa. For many years the plaintiff was his housekeeper at whatever place he installed a home. He had built under contract a section of the Charleston, Clendennin & Sutton Railroad, and in December, 1895, and in January, 1896, he had purchased or taken in payment for work 29 $1,000 bonds of that road, issues apparently as of April 1, 1896, the first interest coupon upon which appears to have been due October 1st of that year. Prior to his death on October 20, [113 N.Y.S. 596] 1896 he had sold 2 of these bonds to his brother William, and pledged 9 as collateral for a loan, leaving the 18 bonds which are the subject of controversy. His aggregate property was of considerable magnitude, and in February, 1894, he had executed a will in which he gave to his sister the use of $25,000 during her life, and to the plaintiff the same amount, the principal in each instance to revert to his estate upon the death of the life beneficiary. The bulk of his estate he gave to his wife and three children. Apparently in June, 1894, the plaintiff obtained title to a house on North Seventeenth street in the city of Philadelphia, whether through the deceased or not does not appear, but it seems that on the 25th of that month the deceased paid off a mortgage of $2,200 thereon. The deceased died at this house, and it was there he made his home when in Philadelphia. At times he was addicted to the excessive use of stimulants which made him violently ill, and the plaintiff nursed him in such sicknesses, for which the testator often expressed gratitude.

The testimony discloses that in the spring and summer of 1896 the testator was solicitous for the welfare of the plaintiff, and often expressed an intention either to change his will and give her the use of a greater sum or to give her 20 of these railroad bonds. The brother of the deceased testified that he told him that he thought that plaintiff ought to have as large an income as his sister, which was $1,500 a year, and that, if he did not rewrite his will and give her the income of $50,000, he would leave her enough railroad bonds to make up that equivalent, and that he would see that it was properly done, and finally told him that he had (or would) fix it beyond a doubt, and on one occasion, when collateral for a loan was spoken of, the deceased said he could not pledge the plaintiff's bonds. To his partner and other witnesses he said that he had made up his mind to give the plaintiff 20 of the specified railroad bonds, and that he had given them to her, and that she could get them at any time if anything happened to him, and the cook of the household testified that as early as April of that year he told her he had 18 or 20 of these bonds locked up in his safe in the West End Trust Company for the plaintiff. The testator sold 2 bonds after that date, however, leaving only the 18.

The testator did not change his will, and there is no proof of any manual delivery to the plaintiff of the bonds in controversy. For some years prior to his death, he had had a safety deposit box in the West End Trust Company of Philadelphia, to which he alone had access. On his death there was found in this box, together with other bonds and securities concededly belonging to the testator, the 18 bonds in controversy. There was an envelope, unsealed, in which was inclosed a title policy transferred to the plaintiff as owner, and what is termed a perpetual fire insurance policy transferred to the plaintiff as owner, and a receipt for the payment of a $2,200 mortgage and interest, all relating to the premises, owned by the plaintiff, No. 2211 North Seventeenth street, Philadelphia. On the outside of this envelope, in the handwriting of the testator, were the words: " Belongs to Mary D. Gegan." The 18 bonds were found, according to the stipulation made upon the trial, " with this envelope superimposed, connected [113 N.Y.S. 597] by a rubber band." It is upon this evidence, and the fact that the bonds were found connected by a rubber band with this envelope marked by the deceased as it was, that the plaintiff very largely relies. The written words were used manifestly with reference to the envelope and its contents only. The word " belongs" is singular and presumably refers to one thing, to wit, the envelope and what is contained. It is possible that the testator placed the envelope on top of the bonds and put the band around them, and assumed that the admission and declaration written by him was sufficient to prove ownership, but we think it fell short of doing so. Had the testator put a wrapper around the bonds and placed the same words on the package, quite a different question would have been presented. Presumptively the words written related only to the envelope and its contents, and they did not necessarily refer to the bonds notwithstanding they and the envelope were bound together in the same package. Besides, the witnesses were testifying years after the occurrence, and some of the statements are quite open to suspicion. Very likely the testator intended to do something for the plaintiff more than he had done by his will, but he failed to do what was necessary to make a gift or to declare himself a trustee and holder of the bonds for plaintiff.

No significance is to be attached to the fact that the plaintiff had possession of the bunch of keys after testator's death upon which was the key to the safety deposit box. She was his confidential nurse, and her possession was quite natural. Besides, she could not obtain access to the box even if she had a key, for it was rented in testator's name only. Nor is significance to be attached to the fact that the October coupons of these particular bonds were not cut. The testator was ill when they would naturally be cut off, and other bonds in the same box had October coupons attached. The brother testified that he deposited certain October coupons for the deceased, but the bank books show no such thing.

The transaction occurred in the state of Pennsylvania and the law of that state is pleaded, and the case of Girard Trust Co. v. Miller, 156 Pa. 579, 27 A. 662, was offered in evidence. From this decision it appears that the law in that state is like our own, to wit, that equity will not aid an imperfect gift or declaration of trust, or transform an imperfect gift into a declaration of trust. The opinions in Smith's Estate, 144 Pa. 428, 22 A. 916,27 Am.St.Rep. 641, and in Eshbach's Estate, 197 Pa. 153, 46 A. 905, also called to the attention of the learned trial court, while not putting the propositions so pointedly, are of the same tenor as the decision of our Court of Appeals in Young v. Young, 80 N.Y. 422, 36 Am. Rep. 634, where it is said:

" Although it is not necessary that the declaration of trust be in terms explicit, the donor must have evinced by acts which admit of no other interpretation that such legal right as he retains is held by him as trustee for the donee."

The plaintiff failed to produce proof of this character, and her complaint was properly dismissed.

The judgment should be affirmed, with costs.

CLARKE and SCOTT, JJ., concur.

[113 N.Y.S. 598] McLAUGHLIN, J. ...

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