Court Opinion

ID: 3484288
Source: CourtListenerOpinion
Date Created: 2016-07-05 21:09:16.715171+00
Date Added: 2024-06-11T13:50:35.142819
License: Public Domain

I cannot agree with the views of the Court on the principal question in this case, the ownership of the ten Northern Central Railway bonds at the time of the death of Charles Gerting, and as the conclusion reached by the Court convicts William Gerting of the fraudulent appropriation of these bonds to his own use, in violation of his oath, as executor, of which I do not believe he is guilty, I feel that it is due to him that I should state the reasons for my own conclusion.
It is correctly stated in the opinion of the Court that the six bonds first purchased by Henry Gerting for Charles by his direction, were paid for with money drawn from the account of Charles Gerting with Hopper  Co., bankers in Baltimore. It is also correctly stated that these six bonds, with two others, subsequently obtained by Charles Gerting, were by him deposited in the Safe Deposit Company in his sole name, and so stood until December 22d 1885, when he withdrew these *Page 640 
eight bonds, and four days later Charles and William went together to the Safe Deposit Company, and these same eight bonds were re-deposited in their joint names, subject to the order of either, and that on October 17th, 1886, two other bonds were in like manner deposited by them and that these ten bonds so remained deposited at the time of the death of Charles Gerting in August, 1892. It is also stated in the opinion of the Court that it appears that the account with Hopper  Company for the greater part of the time was a joint account of Charles and William Gerting, and that it cannot therefore be said that the six bonds bought by Henry Gerting were the sole property of Charles Gerting, but that it was fair to presume that the title to all the bonds involved was vested in Charles and William Gerting as co-owners at the time of Charles death, unless the testimony offered in support of the claim of William Gerting showed that the title of Charles was transferred to him; that the only evidence upon which he relied to support his title was the statements of Charles Gerting made by him to Frederick Gerting and Sylvester Penning, and that it had been settled by many decisions in this State, such as In re Bauernschmidt,97 Md. 62, and Taylor v. Henry, 48 Md. 558, that these declarations did not of themselves operate to divest Charles Gerting of that title.
I have carefully examined the voluminous record in this case, and I can find no evidence that the account with Hopper  Company was at any time a joint account of Charles and William. Mr. Hopper, who should know this, if it were a fact, speaks of it always as the sole account of Charles. William Gerting did, it is true, state at the time the first bonds were purchased, "Henry Hopper had his money," but he did not say the account was a joint account; on the contrary he said Charles at that time gave him a statement showing that he owed him $4,000, which could not have been the case, either if the account was a joint account, or if half these bonds were the property of William. But all this testimony of William, as properly held by the opinion of this Court, was correctly excluded by the lower Court, and cannot be considered in this *Page 641 
Court for any purpose. Reference is made by the Court to the fact that it appears in the record that large sums of money had been sent at various times by William to Charles (though it does not appear for what purpose); but it will be observed that the six bonds which the Court finds were thus jointly purchased and owned, were purchased by Charles on August 26th, 1884, and up to that time the record only discloses remittances from William to Charles amounting to $893. The inference of joint ownership of these six bonds therefore, whether based upon a supposed joint account with Hopper  Co., or upon the remittances from William to Charles up to August 26th, 1884, seems to me to be wholly without warrant, and the subsequent inference that this joint ownership extended to all the bonds involved, seems to me a mere presumption founded upon a prior presumption, which is itself without substantial foundation. The total additional remittances by William to Charles subsequent to August 26th, 1884 and up to December, 1887, were $3,970.
But without dwelling upon this view of the case, the Court says this presumption is strengthened by the fact "that they declared themselves, by the terms of the deposit with the trust company, the last and only clear evidence of title, to be co-owners of these bonds, and that this co-ownership continued down to the death of Charles Gerting, and long after the qualification of William Gerting as executor."
It is not material to the view which I entertain of this case, whether all or only one-half of these ten bonds were purchased with the money of Charles Gerting, and I shall therefore not pursue that question. If all of them were purchased with his money, the title thereto would not be affected by the deposit to their joint order, and if only one-half were so purchased, the title to the one-half would still remain in him unaffected by such deposit. The title, either to the whole, or the half, could not be transferred to William without proof of some sort to show that Charles had relinquished his dominion and control over the whole or the half as the case may be. Whalen v. Milholland,89 Md. 199. *Page 642 
In that case, the deposit was to "A  B, joint owners,
payable to the order of either or the survivor," and the money when deposited, was the money of A alone. The Court held that the retention of the pass-book by A, at her death, unexplained byany evidence as to such possession, was evidence of continued ownership by her, and showed that she still retained dominion over the fund. I concurred in that opinion, and do not now desire to question or impair its authority, but I maintain that it has no application to the facts in this case, as presented by the testimony. All that Taylor v. Henry, 48 Md. 558, and theBauernschmidt case, 97 Md. 62, decide upon this point, is that mere declarations of a purpose to make a gift, does not constitute a gift, and this is made clear by the language of the Court in Whalen v. Milholland, supra, page 201, where it is said: "It (the gift) must go into effect at once, or in other words, transfer the property at once and completely; for if it has reference to a future time when it is to operate as a transfer, it is nothing more than a promise without consideration, and cannot be enforced either at law or in equity."
Now, conceding here, for the present purpose only, the co-ownership of these bonds to have continued up to some period shortly before the death of Charles, the continuation of this co-ownership up to the time of his death is the question for determination, upon the testimony in the case, and the legitimate inferences to be drawn therefrom, according to the established rules for the consideration of testimony.
In the opinion of the Court it seems to be assumed as a fact in the case, that because the certificate of deposit was shown to be in the possession of Charles a month or two before his death, that it so remained until after his death, and that there was, therefore, no transfer of the title to these bonds to William; that he secured possession of this certificate after, and by virtue of his qualification as executor of Charles, and that his possession of the bonds, was as executor, and not in his own right. This would undoubtedly be the correct inference if there were nothing in the case to show in what right he received this certificate and held these bonds. But there is, in *Page 643 
my judgment, abundant evidence to show his possession of this certificate as owner of these bonds, as I shall attempt to show as briefly as I can.
It must be remembered that fraud is never to be presumed, but is always to be proved, though not necessarily by direct evidence, and that wherever special circumstances exist, aiding the general presumption of innocence, they should be given their due weight. In this case all the testimony admitted, shows that throughout their whole lives, the relations of Charles and William had been affectionate and confidential. Only a few weeks before his death, Charles constituted William executor of his will and trustee for his daughter, with unusually broad powers, excusing him from giving bond, declaring his entire confidence and faith in him, and in the contingency of his daughter's death under twenty-five and without issue, left the whole estate to William, except a legacy of $2,000 to his brother Frederick. William was at his home in New York when this will was drawn, and had no knowledge that a will had been made, or was in contemplation, until he came to Charles house two days before his death. Mr. Penning, the attorney, who drew the will, in accordance with Charles directions, did not know William Gerting and never saw him until the day of the funeral, so that it is clear the will must have embodied the deliberate and uninfluenced wishes of the testator. William Gerting, as executor, made oath that he would well and truly administer the estate, and that the final administration account which he rendered was a true and full administration of the estate. The most solemn oaths are indeed sometimes deliberately violated, but the legal presumption is that they are observed and kept until proof is made to the contrary. Trustees sometimes rob instead of protecting the estates committed to their care, but when charged with this crime, they are entitled to the full benefit of all the presumptions of innocence which the law provides for those accused of its violation and these presumptions are as efficient and persuasive in civil as in criminal proceedings. In discussing this principle in Brewer v. Bowersox, 92 Md. 574, *Page 644 
a case very similar to the present, the Court said "Every presumption obtains in favor of innocence and good faith. Where an act may be innocent or culpable, as antecedent circumstancesmake it the one or the other, and those antecedent circumstances are not disclosed; the plainest dictates of justice require that the act shall be treated as an innocent act. And so when the alternative is as to whether the act is rightful or wrongful, the act being one that may be either, according to its environments, and there is nothing to show that it is wrongful, the natural and general presumption, founded on observation and experience, is that it was rightful."
This language was used in an inquiry whether the wording by the wife of a certificate of deposit of the husbands's money, and the possession by her of this certificate during his life, was wrongful, so as to divert his money from his estate without his consent, and the fact that it was used in that connection,
emphasizes its applicability to the question now under consideration.
I concur in the opinion expressed by the Court that Henry Gerting cannot be regarded as a reliable and truthful witness, and I cannot, therefore, in the face of William's denial, accept Henry's statement of what William told him of these bonds. The inherent improbability that a man engaged in the perpetration of such a fraud as is here charged, should voluntarily place the proof of his guilt in possession of another, and especially of a brother of the person defrauded, is such as to tax my credulity beyond its limit. Can it be believed that either shortly before or shortly after informing Henry that Charles owned ten thousand dollars in bonds at the time of his death, he fraudulently omitted them from the inventories, and the administration account, and converted them to his own use? I cannot believe it. The alleged conversation with Henry occurred soon after the death of Charles, but was never disclosed by Henry until more than ten years later, when he wrote Mrs. Wells the letter of February 9th, 1902, instigating this litigation by her and evincing his hostility to William.
Moreover it is undisputed that from October 17th, 1888, *Page 645 
until December 19th, 1892, these same ten bonds were in the Safe Deposit and Trust Company of Baltimore, in the joint names of Charles and William when they were withdrawn by William upon surrender of the certificate of deposit. They were not therefore in possession of Charles at or shortly before his death, and could not have been produced by William at request of Charles from his desk, nor have been looked over by him, and pronounced to be "all there." This fact demonstrates the untruthfulness of Henry, and requires the rejection of his testimony when denied by William, and not sustained by other credible testimony.
William Gerting being incompetent to testify to any conversation or transaction had by him with Charles, "the antecedent circumstances" attending the possession by him of this certificate of deposit, and the "environments" of the act of withdrawing the bonds as his own property cannot be given by him, and if without his explanation of these "antecedent circumstances" and "environments" he would be held to account to his brother's estate for these bonds, he should be so held now. But in my judgment these circumstances are made to appear sufficiently from other competent testimony in the case.
Frederick Gerting, the brother to whom Charles left the contingent legacy of $2,000, testified that on the 2nd or 3rd of July, 1892, at Charles' house in Havre de Grace, in the course of a general conversation about the business of each other, he asked Charles if he had any bonds, and he replied: "I have no bonds.What bonds there is, is Williams." This was about six weekbefore the will was drawn, and it should be noted that the form of the reply seems to indicate that he had owned some bonds at one time, but that those bonds now belonged to William. He does not merely answer "no," as would have been natural, if William had no connection with the bonds, but he says in effect, "I did have some bonds, but all those bonds now belong to William."
Mr. Penning who drew the will on August 16th, 1892, says when he was called in for this pupose, he asked Charles to state of what his estate consisted, and that in reply he enumerated *Page 646 
the following items: Brick house in Havre de Grace and the furniture in it; his interest in the DuBois sawmill; money in the Eutaw Savings Bank, and money in the Southern Building Association. Can it be believed that if he possessed these bonds of the value of $10,000, he could have forgotten the fact, or have omitted to mention them in enumerating the items of his estate for Mr. Penning's information? They constituted the largest item in his estate (if a part of it), and the most important to mention to his counsel, since they were not visible and apparent like the house and furniture, or known to friends and neighbors as was his interest in the firm of DuBois  Co.; and the only explanation of his failure to enumerate them, as a careful, successful business man, accustomed to saving and investing, is that he knew he then had no bonds. Upon a visit of Mr. Penning a few days after the execution of the will, Mr. Penning testifies that Charles said, "there had been some bonds, but they were all Williams." Evidently his mind reverted to the enumeration of his estate which he had given Mr. Penning when the will was drawn, and he wished him to know that he had not omitted anything from that enumeration. The form of his statement expresses clearly the meaning I have attributed to his reply to Frederick, viz.: "That he had owned some bonds, but that these all now belonged to William." How they belonged to William, whether by actual, completed, gift, by purchase, or as the result of a settlement of mutual accounts, it was not necessary for him to say, nor for the Court to know, provided the ownership had been in some manner transferred. It is enough for this purpose to know, in the absence of positive proof to the contrary, that he disclaimed the ownership and affirmed it to be in William.
It is important to observe here that the language of Charles does not import a gift at all, either a proposed or a completed gift. He does not say "I intend to give these bonds to William" or "I have given them to William." The language imports a transaction based upon a proper and valuable consideration, for which he had parted with his dominion and *Page 647 
control over these bonds, and had actually transferred the title to William. If that was the fact (and no one could know this better than he) it is not material that he did not at the time, or at sometime before his death, deliver the certificate of deposit to William. Delivery of the certificate would be material to the validity of a gift of the bonds, but not so as to a purchase, or a settlement of accounts supported by a valuable consideration. The inference drawn by the Court from the language of Charles and the surrounding circumstances, so far as they are disclosed, is that Charles referred to an intended gift of these bonds to William, and that as there is no proof of delivery of the certificate the gift fails. Its further inference is that William, after qualifying as executor, got possession of this certificate, and then illegally and fraudulently converted the bonds to his own use; thus by inference in the face of Charles declaration that the bonds belonged to William, fastening upon him a large pecuniary liability and the odium of attempted fraud.
The inference I would draw from the language of Charles, and the antecedent and surrounding circumstances of the act of William in treating the bonds as his own, is drawn from the natural construction of the language, which does not import a gift at all. The construction given by the Court makes the act culpable. Mine makes it innocent, and mine is in accord with the rule declared in Brewer v. Bowersox, supra, while that of the Court, as I understand this case, ignores that rule.
There was no attempt to impeach either of these witnesses. Both are disinterested, and one of them, in addition to his oath as a witness, appears as a lawyer in presumed good standing among the members of his own bar by whom this case was conducted, and is bound by his oath as an attorney, to demean himself justly and honorably in all things. I can discover nothing in the record to discredit the truthfulness or accuracy of either, or to justify me in rejecting their testimony and practically treating them as conspirators with William Gerting to defraud his dead brother's child.
If not rejected, theirs is the controlling testimony in the *Page 648 
case, and I must be governed by it in determining the ownership of these bonds at the time of the death of Charles Gerting. In my judgment, the declaration of Charies Gerting, established by two creditable witnesses, show that these bonds were the property of William Gerting, and I cannot therefore concur in an opinion which requires him to account for any part of them to the estate of his brother.
(Filed August 13th, 1906.)