Court Opinion

ID: 4001111
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:57:49.540106+00
Date Added: 2024-06-11T13:43:03.598675
License: Public Domain

The transactions represented by the purchases of the bonds cannot be held to be gifts inter vivos, because Marino did not surrender absolute dominion or control over the bonds or their proceeds; nor can they be sustained as gifts causa *Page 555 mortis, because there was neither actual nor constructive delivery of any property by Marino to Mrs. Decker, and certainly there was no delivery by him to her in contemplation of death from an existing illness or impending death. Hence, if this case is to be decided by the application of the law pertaining to gifts, I would have no hesitancy in joining with the majority. But I do not consider these purchases as transactions at all between Marino and Mrs. Decker. They were transactions solely between Marino and the United States government and were contracts pure and simple.
Marino purchased from the government six United States savings bonds which were payable to him on demand at any time after sixty days from date of their issuance or else at maturity, if he were then alive, and upon his death, if the bonds were not already redeemed, to his sister Mrs. Decker, provided she survived him, and on her death if they still were unredeemed, to her heirs. In the various transactions involving these purchases, Mrs. Decker was not a party. The record does not disclose that she ever knew anything about them until after her brother's death.
Marino saw fit, as he had the right, to invest his money in bonds which provided that they should be paid to certain persons, at certain times, on certain conditions. One of those conditions was that, if the bonds were not redeemed by him prior to his death, they should be paid to a person designated therein as "beneficiary." Another condition was that he could not substitute a beneficiary for the one designated in the bonds. The beneficiary, Mrs. Decker, therefore had a present vested, though defeasible, interest in the securities.
True it is, as the majority opinion points out, that Marino might have cashed the bonds in his lifetime and thus have cut off any interest that Mrs. Decker *Page 556 
otherwise might have had in them. However, had he done that, it would not have been in repudiation of his contracts with the government, but strictly in performance of them according to their very terms. His death, however, terminated his right and opportunity to demand payment, but the contracts still survived, and the manner of performance on the part of the government was then controlled by other equally binding terms of the bonds. Payment thereafter to Mrs. Decker would be as complete performance, according to the terms of the agreements, as payment to Marino on his demand otherwise would have been.
Marino might have made a present gift of an equivalent amount of money to his sister and no one would have been heard to complain; evidently, he did not wish to do so. He might have made a will in her favor; he did not elect to do that. He deliberately bought bonds prepared in the form prescribed by the government, in which it was provided that, upon certain conditions, they were to be paid to him, and upon certain other conditions they were to be paid to her or to her heirs, and to no one else. Marino certainly intended that, upon the fulfillment of the second set of conditions, Mrs. Decker should receive the money; and the government recognized that intention by agreeing to pay the money to her under those conditions.
It cannot be said properly that Mrs. Decker was to get title to the bonds or their proceeds at the time of, or after, Marino's death. She was a registered beneficiary named in the bonds and had a present vested, though defeasible, interest therein contemporaneous with Marino's superior rights. His death simply terminated his rights and thereby left her right or interest indefeasible. Payment to Mrs. Decker will constitute performance of the very contracts by which Marino elected to bind himself. *Page 557 
The case of Warren v. United States, 68 Court of Claims Reports 634, which the majority considers inapplicable here, is, in my opinion, very much in point. In that case, it appears that one Wiggins purchased certain Treasury savings certificates payable, in case of his death, to certain named beneficiaries. Wiggins having died, the executrix of his will, who had possession of the certificates, brought an action in the court of claims to compel payment to her, alleging in her petition that the certificates and proceeds thereof belonged to the estate of Wiggins. The court held that the case was simply one of contract, and said:
"The Secretary prescribed the conditions that are to be found in the contract (paragraph 5 of the petition), and without going into details, they provide that the purchaser could have the certificate made payable either to himself or a beneficiary. He was not required or compelled to make it payable to a beneficiary. If he did so, as in this case, it was provided that the name of the beneficiary would be registered in the Treasury, and that the fund represented by the certificate, the certificate being a mere evidence of debt, should be payable to him upon the death of the purchaser leaving the beneficiary surviving, unless the purchaser during his lifetime recalled the designation or collected the fund represented by the certificate. The testator did not cancel the designation of the beneficiaries and did not collect the fund during his lifetime. He died leaving the beneficiaries surviving him. The Secretary of the Treasury in effect said to plaintiff that under the contract `this money is payable to the beneficiaries and not to you and I refuse to pay it to you.' We are of opinion that in so doing he was acting in conformity to the provisions of the contract.
"In the light of the foregoing conclusions plaintiff's petition should be dismissed and it is so ordered."
So here, the case is simply one of contract between Marino and the government, and the performance of the contracts now entitles Mrs. Decker to the proceeds *Page 558 
of the bonds. This case is even stronger than that case in point of fact, for here the purchaser of the bonds did not have the right to recall the designation of beneficiary, while in the cited case he did.
To say, however, that Mrs. Decker alone is entitled to collect the money, but that she must immediately pay it over to the administrator, is to rob the contracts of their very substance and convert them into something that neither the purchaser nor the government ever intended.
There is no evidence in this case that Marino ever intended that the proceeds of the bonds should belong to anyone other than himself or Mrs. Decker; and, in the absence of any specific direction to the contrary, the only reasonable interpretation to be placed on the language of the instruments is that the proceeds should belong to her in her own right and not as trustee for some one else. The result of the majority opinion will be that what heretofore has been thought to be an attractive form of government security will prove but a snare to those who rely upon it.
I think that the judgment of the trial court should be affirmed.
ROBINSON, J., concurs with STEINERT, J. *Page 559