Case Name: John Devlin, Appellant, v. Mary E. Hinman, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1898
Citations: 34 A.D. 107
Docket Number: 
Parties: John Devlin, Appellant, v. Mary E. Hinman, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 34
Pages: 107–116

Head Matter:
John Devlin, Appellant, v. Mary E. Hinman, Respondent.
Trust — the effect of depositing money with a trust company in the name of the depositor as trustee for another — when it does not create an irrevocable trust.
Where a father deposited his own money with a trust company in his name, as trustee for his daughter and his son, requiring them at the time to give to him powers of attorney authorizing him to control the fund, and the father treated the account at all times as his own, retaining the pass book in his own possession, and alone drawing checks upon the account, some of which were drawn to the order of the daughter without objection on her part, the father using the account without reference to, or consultation with, either of his children, the court considered that it was understood by all the parties that the father, was the owner of the money, and that he never'intended to, and never did, divest himself of the title thereto, and never made any irrevocable trust in respect thereof. , ■
Appeal by the plaintiff, John Devlin, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Kings on the 23d day of February, 1898, upon the decision of' the court rendered after a trial at the Kings County Special Term dismissing the plaintiff’s complaint.
Horace Graves, for the appellant.
Edward M. Grout, for the respondent.

Opinion:
Goodrich, P. J.:
The action was originally instituted against the Hamilton Trust Company and Mary E. Hinman. The complaint alleged that in March, 1895, the plaintiff entered into an agreement with bis children, George W. Devlin and the defendant, Mary E. Hinman, by which it was agreed that if the plaintiff deposited with the Hamilton Trust Company the sum of $60,000 or other moneys, to the joint credit of said George and Mary, they would each execute a power of attorney to the plaintiff by which he would be able to draw such moneys from the trust company and use the same as he deemed. best; that, on April fifteenth, the powers of attorney were executed by George and Mary; that the plaintiff, from March twenty-sixth to May sixth, deposited with the trust company $66,701.25 and' handed the powers of attorney to the trust, company; that on the third or eleventh of June the defendant,. Mrs. Hinman, notified the trust company that she had revoked the power of attorney, but that no notice of such. revocation was given to the plaintiff, and that in ignorance. of such fact he deposited other sums of money with the trust company; that on November nineteenth the plaintiff withdrew the sum of $96,978.93 and redeposited the same with the company in his own name; and that the trust company refused to permit the plaintiff to withdraw the sum of $48,261.73, being one-half of the deposit, for which sum the plaintiff demanded judgment.
The Hamilton Trust Company answered, admitting the deposit of $66,701.25, and subsequently the court directed the trust company to pay into court to the credit of this action the sum of $48,261.73, with interest, and the trust company was dismissed from the action.
The answer of the defendant, Mrs. Hinman, alleged that the money in question was bn deposit with the trust company, in the name of' the plaintiff, in trust for her and her brother George, and was her property, and that it was deposited under a power of attorney executed by her to the plaintiff, which she afterward revoked.
The plaintiff's contention is, that the account was opened by him for his own benefit; that he was the sole owner of the account and the moneys deposited, and that he never gave the money to the defendant, while the defendant claims that the transactions constitute^ an absolute. gift to her from her father. The plaintiff and defendant were examined as witnesses at the Special Term, and it is chiefly upon their testimony that the question must be decided. ' The court found that on April 6, 1893, the plaintiff deposited $100,000 with the People's Trust Company, in the name of John Devlin, in trust for Mary Hinman and George W. Devlin; that thereafter the plaintiff showed the pass book, to the defendant " and then and there stated to her that the account had been opened for her and for her brother; " that on March 6, 1895, the plaintiff opened ah account with the Hamilton Trust Company, in the name of Mary and George, in which, prior to May 6, 1895, was deposited nearly $6,000 ; that on that day there was deposited in this account $60,000, which was withdrawn from the account in .the name of George, previously deposited in the People's Trust Company, in a former account therein, in the name of John Devlin, in trust for Mary and George; and that thereafter, and down to November 19, 1895, the plaintiff made other deposits with the Hamilton Trust Company, which, with interest, brought the account up to $96,978.93, of which the plaintiff gave one-half to the defendant, Mrs. Hinman, " by way of advancement."
As conclusion of law, the court found that the sum- named belonged to the defendant, Mrs. Hinman, and directed the payment of the money to her. From the judgment entered upon this decision the plaintiff appeals.
Enough has been said to indicate that this appeal must turn upon the question whether the transactions mentioned constituted a gift from the plaintiff to his daughter.
This court has stated the view which it entertains of the law applicable to deposits similar to that in the present action, in Decker v. Union Dime Savings Institution (15 App. Div. 553), where a depositor opened an account in these words : " William F. Du Bois, trustee for Ellenora H. Decker." Mr. Justice Hatch, speaking for the court, said (p. 554): "The language used by the depositor in making the deposit in the present case is in all respects similar to the language used in Martin v. Funk (75 N. Y. 134). It Constitutes an unequivocal declaration of trust in favor of the beneficiary. But while this is true, it by no means follows that the legal title to the fund passes to the beneficiary or that the depositor of the fund has divested himself of title. The declaration is simply evidence of an intent to create' a trust in favor of the beneficiary named, and may or may not be conclusive of such fact. (Beaver v. Beaver, 117 N. Y. 430.) If the trust be once established it is irrevocable in the absence of any reservation of power of revocation. (Mabie v. Bailey, 95 N. Y. 206.) "
An appellate court is always reluctant to differ with the findings of the court at Special Term upon matters of fact. We recognize the fact that the Special Term has better facilities for deciding questions of fact, the decision of which must in some measure depend upon the appearance of, witnesses and the manner in which their testimony was given. But when it appears that the decision of the trial court is against the weight of the evidence, or that the proof so clearly preponderates in favor of a contrary , result that it can be said with reasonable certainty that the trial court erred in its conclusions, the judgment should be reversed (Foster v. Bookwalter, 152 N. Y. 166); and in the present case we cannot resist the conclusion that the testimony of the defendant herself and the documentary evidence about which there can be no dispute evince in a strong manner that the plaintiff .never intended to, and did not in fact, make- an absolute gift to the defendant of the deposit in question. The plaintiff for many years had been a contractor, doing work for the city of Brooklyn, and had amassed a considerable sum of money. On April 6, 1893, lie drew his check on the First National Bank of Brooklyn, to his own order, for $100,000, and indorsed.it "Pay to People's Trust Co., John Devlin." It was deposited in the People's Trust Company in an account headed. " John Devlin, Trustee, for Mary E.'Hinman and George W. Devlin." After the time of such deposit, commencing with August 11, 1893, down to January 31, 1894, the plaintiff drew nearly 100 checks upon the account, in large and small sums. On November 21, 1893, the account was balanced on the books of the People's Trust Company, the balance, $46,052.23, being brought forward to an account with a similar heading on another ledger. On October 18, 1894, there appears a deposit of $60,000 in this account. The plaintiff continued to draw checks, more than 30 in number, down to September 25,1894, when'the account was again balanced, .such balance to the credit of the plaintiff being $94,897.46. This balance being carried forward to an account with the same heading, other deposits were made,' bringing up the total deposit to-$105,896.46, and on January 31, 1895, a balance was struck, showing the sum of $850.94 to the credit of the plaintiff: This last ac,count contains a check of John Devlin, trustee, dated January 31, 1895, to the order of George, for $69,000, which was indorsed by George and deposited in the People's Trust Company in an account headed with the name of George W. Devlin, to which account various other deposits were added and against which sundry other checks were drawn .by the plaintiff, so that on April 19, 1897, when the account was balanced, there was standing to the credit of the account $7.31.
.It will be observed that in the account of the- People's Trust Company with George W. Devlin there appears a deposit of $60,036.25 under date of May 7, 1895. Apparently, this was the proceeds of a check dated March 4, 1895, and drawn by said George on the People's Trust Company to the order of Mary and George, for the sum of $60,000. This check was indorsed with the names of ' George and Mary " for deposit account," and was deposited with the Hamilton Trust Company on May sixth. There is a difference between the amount of the check and the deposit, but we assume that it is the same check, the difference probably being interest on the amount of the check. In the same account, under date of January thirty-first, is- a deposit of $69,000 which was the proceeds of a •check of that date, signed by John Devlin-, trustee, to the order of .and indorsed by George, for the sum of $69,000.
• The record contains transcripts of the accounts with the Hamilton Trust Company. The first was headed " Hamilton Trust Company, in account with Mary E. Hinrnan and Geo. W. Devlin." The first deposit was of $2,100, on March 26, 1895; several other deposits were made, and on May sixth there was deposited $69,862.50, which was evidently the deposit of the $69,000 check and perhaps the balance to the credit of Devlin, trustee for George and Mary, in the People's Trust Company, already referred to. This was followed by other deposits, down to July nineteenth, the total amount being' $96,778.93. On November nineteenth this entire amount was drawn out by a check signed " John Devlin, Atty., George' W. Devlin and Mary E. Hinrnan," to the order of John.Devlin, in trust, and indorsed " Or. ac. John Devlin in trust," and was used in the opening of another account with the Hamilton Trust Company, headed " John Devlin, in trust for Mary E. Hinrnan and George W. Devlin." More than fifty checks were drawn against this account, commencing with December 26, 1895, and ending on September 28, 1896, when the account showed a balance to the credit of the account amounting to $48,261.73, which is the sum in litigation.
It appeared in evidence that George, on April .13, 1895., and Mrs. Hinrnan, on April fifteenth, executed written powers of attorney which, among other things, gave the plaintiff full power to control the trust company account in question and to deposit and draw moneys in any bank; and that on June 3, 1895, Mrs. Hinrnan executed a revocation of her power of. attorney, which was communicated to the Hamilton Trust Company on June eleventh. Among the checks upon the Hamilton Trust Company were twenty-one which were given to the order of the defendant for her personal expenses. '
I have already said that while there are other witnesses than the plaintiff and defendant, the decision of this appeal must rest largely upon the credit to be given to the testimony of the plaintiff or defendant, taken in connection with the documentary evidence. It is true that the son and two other witnesses testified in corroboration of the plaintiff, but, as the learned judge at Special Term does not seem to have credited them, I do not think it necessary to rely upon their testimony, and I rest the decision of the question of- fact upon an examination of the testimony of the plaintiff and the defendant and proceed to state their evidence upon the main question.
The plaintiff testified that in November, 1894, the defendant asked him to deposit money in the bank in the name of herself and her brother; and that " I told her I would put money in the bank in her name and in my son's name, but before doing- that they must each give me a power of attorney, and in 1895 I said that no one should control the fund but myself. I told them that I should own it. That was in 1895. This conversation that I had been testifying about took place part of it in 1894,. and the next was in 1895. I think it was in the early part of 1895 around March or April. She said that she would give me a power of attorney and that she would be glad.if I would deposit the money in her name; it was understood that I should own it; should have a right to take it out and do what I liked with it; I -told her my object in putting it up was for the purpose of giving certified checks when I should take, a contract. Contracts for—municipal contracts, and other work. My business was that of a contractor for thirty-five years. I made-all the deposits. This is the book of deposits." He further testified that he opened an account with the Hamilton' Trust Company and received a pass book which always remained either in the possession of himself or the trust company, and that all of the moneys deposited in the account came from and originally belonged to him.
Mrs. Hinman testified as follows: " The first time there was any conversation between my father and myself concerning, money in the bank was in February, 1892. This was said: He gave me a paper to keep which had been drawn up — an assignment, I think the paper reads. The instrument reads that there was money put in my name. He did not tell me as a matter of fact that there-was an account opened. The first conversation between me and'my father as to that account was in 1893; papa came and showed me a pass book of the People's Trust Company. That pass book showed I didn't take it from papa's hands; he opened it; I saw at the top of the account, George W. Devlin and Mary E. Hinman, §100,000. This pass book you showed me I could not say that is the book which my father showed me. The reading at the top is the same. Q. Is it like or similar ? A. Yes, sir. The conversation had between me and my father at that time, he said half of this is a gift. That half of this is a gift and is for meto use, and that whenever he needed money he should always have it. This was in 1893, and the next was in 1894. Before going to the country papa asked me if I would indorse a blank check, and he said while I was in the country there was three or four connections between Connecticut and New York — trains irregular; he asked me if I would indorse a. check so that he could buy stock in case anything — any good opportunity should present itself on the exchange, and I endorsed the checks, several checks. I never saw any of those checks again on which I wrote my name in blank. There was nothing said in that conversation about any condition or agreement, or power of attorney or anything except to refer to what was to be given me and to George. It was always an absolute gift, I understood. My father at no time when the conveyances were made never said anything to me about my going security, for him on any contract. He never asked me to sign any bond as security or issue certified checks, checks to be certified and used in business. It isn't true that there was any stipulation or restriction upon the ownership of the gift of either the land or the money expressed in my conversation between 'my father and myself; never to me — there never was a stipulation as far as papa and I was concerned. The reason why my father gave me, at any of these conversations, why he was putting money in my name was for love and affection — a gift to me. That is not my impression of it; he told me. He used those words, 'love and affection,' continuously."
It also appeared that Mrs. Hinman, at the request of her father, signed or indorsed a number of cheeks in blank, the object of which, she testified, was a " mystery " to her.
From a careful reading of the testimony already quoted and from the documentary and other evidence in the case, I cannot escape the conclusion that the plaintiff never intended to give the money in question to his children. This conclusion was so clearly required by the evidence that a finding to the contrary was error. The accounts stood in the name of the plaintiff as trustee for his children. They gave him powers of attorney to control the account, and this he did absolutely. Even Mrs. Hinman admitted in her evidence that when, as she claims, the gift was made to her, her father said " Whenever he needed money he should always have it," showing that the gift was not absolute, even on her own statement. Mrs. Hinman assigned or indorsed checks in blank as he requested, and the plaintiff used the account without reference to or consultation with either of his children. All checks were drawn by him, even for the personal expenses of the defendant. No objection was made to this course of procedure until, owing to differences between the plaintiff and his daughter, Mrs. Hinman revoked her power of attorney ; and, while she gave notice of this revocation to the trust company, she concealed this fact from her father, so that, in ignorance of the revocation, he continued to deposit money and draw checks as he had always done. Mrs. Hinman does not deny her signature to the power of attorney, although she denies that she acknowledged it before a notary. I can see no reason for the execution of' such a power of attorney by her, if the money was an absolute gift to her, and her story is inconsistent with her contention.
The first account in • the People's Trust Company stood in the name of the plaintiff as trustee for his children. Still the plaintiff, at all times for a year and a half, controlled and used this .account and drew checks upon it without reference to or consultation with his children. This account was practically closed on January 31,1895, by the check of $69,000 to • George's order,- which, for some unexplained reason, was used to open a new account in the same company, in the name of the son alone. This account, it will be especially noted, was not in the name of Mrs. Hinman, but in -the name of George. It seems to have been used by the plaintiff for general business purposes under George's power of attorney, in just the same way as he had used the previous account, and this continued from February 13, 1895, down t<5 April, 1897. But on March 4, 1895, the check for $60,000 was drawn by George to the order of Mrs. Hinman and himself, and this is apparently indorsed by both. It was not deposited, however, until May sixth.
Mrs. Hinman testified that she never indorsed any check drawn by George, but as she admitted that she had at her father's request indorsed several blank checks in 1894, it may well be that the check was one of them. On the other hand, the plaintiff testified that Mrs. Hinman did. indorse this particular check. I have personally examined the exhibits and compared what purports to be her signature on the $60,000 check with her admitted signatures on several of the other exhibits, and I am convinced that she is in error as to her indorsement of the $60,000 check, although, as already stated, it may be one of the checks which she indorsed in blank. Indeed she testified cautiously when she said : " I don't remember ever endorsing a check like that after it had been filled but. I never endorsed a check drawn by George Devlin. I never endorsed that when it was filled out." It seems clear that the indorsement, was made by her and it tends strongly to verify the belief that she knew that there was no irrevocable gift of the accounts to her.
To summarize the facts, it is evident that the money originally belonged to the plaintiff, and that he treated the accounts, both in the People's Trust Company and the Hamilton Trust Company, at all times as his own ; that he changed them from time to time as he .saw fit; that he retained the pass book in his own possession; that he alone controlled the accounts and drew checks against them, and that Mrs. Hinman received moneys upon the plaintiff's checks drawn to her own order, and in no instance objected to his control of the accounts until difficulties arose between them, when she revoked her power of attorney, and then only instructed the Hamilton Trust Company that such checks must not be charged to what she claimed to be her half of the account. There is ample evidence for the conclusion that both parties understood that the plaintiff was the owner of the money, and that he never intended to and never did divest himself of the title to the fund, and never made any irrevocable trust thereof. The sole question here, as in Decker v. Union Dime Savings Institution (supra), is whether the legal title to the fund passed from the plaintiff to Mrs. Hinman, and whether the plaintiff divested himself of such title. I am forced to believe that the plaintiff did not intend to divest himself of the title, and that Mrs. Hinman did not understand such to be his intention
There are no creditors whose rights are .to be protected, and there is no suspicion in the record that there was any intention on the part of the plaintiff to cover up the account so as to defraud creditors, in which, case a different rule would apply.
We are not embarassed by our opinion in Hinman v. Devlin (31 App. Div. 590) upon which .the respondent relies. This court had under consideration on that appeal certain transactions between the . plaintiff herein and his children, in regard to conveyances of his real estate by the plaintiff to them, and it was assumed that the plaintiff had made these conveyances to his children as advancements. Incidentally, some of the matters involved in the present action came under consideration, but we made no ruling inconsistent with this opinion.' Mrs. Hinman brought that action to set aside a conveyance by her father to her brother, Under her power of attorney, of real estate which he had deeded to her. We held that this conveyance, executed under Mrs. Hinman's power of attorney to the plaintiff,, was made after a quarrel among the three members of the family, to the son George, who had full knowledge of Mrs. Hinman's claims to the absolute ownership of the property, and that the execution of the deed, under the circumstances stated in that case, was an abuse of .the trust confided in the father, and for this'reason we set the conveyance aside. But the decision in that case, is not conclusive of the facts in the- present action.
I am clear in my conviction that the judgment should be reversed and a new trial granted:
All concurred.
Judgment reversed and new trial gran ted,, costs to abide the final award of costs.