Page images
PDF
EPUB

be made to recognize the right of any other person to exercise dominion over the fund. To compel the bank to recognize the claim of the beneficiary would be to subject it to subsequent attacks by the original depositor."

68. Hemmerich v. Union Dime Savings Institution, (1911), 129 N. Y. Supp. 267.

PART II.

JOINT AND ALTERNATE DEPOSITS.

§ 18. Joint and alternate deposits. What has been said in section 1, with reference to trust deposits, applies in general to joint and alternate deposits. Accounts of this character are opened for the same general purposes and they are closed with the same uncertainty of result. There is also the same conflict in the decisions as to the effect of such deposits.

66

In using the expression "joint deposit," we refer to a deposit made in two names connected by the word and." An alternate deposit has reference to a deposit in two names connected by the word "or." In the case of either deposit the right of the bank to pay upon the signature of one of the parties would depend upon the contract between the bank and the depositor, or depositors. In the absence of any agreement, or of any notice to the bank by one of the parties not to pay, the bank would be justified in paying either party in the case of an alternate deposit. Thus, if A deposited money in a savings bank in the names of "A or B," the bank would be protected in paying B upon his production of the pass book. But, as a general rule, the matter of drawing the money is usually fixed by the parties at the time of opening the account. When the deposit is opened in the names of "A and B " the account is usually marked

with the words "pay either," or words to that effect, making it virtually an alternate deposit. The right of the bank to pay in such cases is controlled in many states by statute.

66

In general it is immaterial whether the word" and " or or" is used in connecting the names of the two persons named as depositors. A trust, or a gift, of the deposit may be created by the use of either word. In matter of Meehan,69 where a husband opened three bank accounts in the names of himself and his wife, two of which were entitled "Christopher and Mary," and one," Christopher or Mary," with the intention of making a gift to the wife, it was held that the use of the word "or" between the names in one of the accounts, instead of "and," in no way lessened the effect of the deposit.

May 17, 1892,

§ 19. Trust created by joint or alternate deposit.-A joint or alternate deposit has been held in some instances to operate as a trust. In one such instance it appeared that A, who had a savings bank account, signed the following paper: "To Oakland Bank of Savings, in re savings deposit 7041, in my name. dividual order of either B, or C, or myself. It was held that, upon the death of A, while the transaction fell short of being a gift to B and C, there was a valid trust in favor of B and C as to the amount on deposit at the time of A's death.70

Pay to the in(signed) “A.”

In another case it appeared that one Helena Roche had a deposit in her name in the Hoboken Bank for Savings.

69. 59 N. Y. App. Div. 156, 69 N. Y. Supp. 9, (1901).

70. Booth v. Oakland Bank of Savings (1898), 122 Cal. 19, 54 Pac. Rep. 370.

Accompanied by her grandson, Henry Schwoon, she went to the bank and caused her pass book to be changed to read as follows: "Helena Roche or Hy. Schwoon, in account with Hoboken Bank for Savings, payable to either or survivor." At the same time she signed a paper authorizing the bank to make the change, and stating that she and her grandson would be copartners in the ownership of the money, and that either or the survivor might draw. The depositor delivered the pass book to a friend with instructions to give it to Schwoon upon her death. It was held that the signing of the statement at the bank, the opening of the alternate account, and the delivery of the book to a third person for Schwoon constituted a complete declaration of trust.71

In construing, a joint or alternate deposit as a trust by the depositor in favor of the person named as codepositor the same rules should apply to cases involving deposits by one person in trust for another, which have already been discussed. Whether or not a trust has been created depends upon the intent of the depositor. If it appears that it was not his intention to create a trust, then that intent should govern. But the intent alone is

[ocr errors]

71. Hoboken Bank for Savings v. Schwoon, (1901), 62 N. J. Eq. 503, 50 Atl. Rep. 490. In the opinion it was said: The objection of this mode of making a gift is that it is testamentary in its character, and, in effect, a will, and therefore void under our statute. In support of this conclusion is pointed out the circumstance that the power of disposition by the donor continues during his or her lifetime. But this circumstance has not deterred the courts from giving effect to such arrangements. This has been done on two grounds: First, that a joint estate or interest is created, with an express right of survivorship, which operates naturally and legally upon whatever of the fund remains unused at the death of the donor; and, second, on the ground of a completed trust."

not sufficient. It must further appear that the intent was properly executed.72

The mere deposit of money in the name of one person, payable to another, will not create a valid trust.73

It has been held that, where the depositor has the money placed in the name of another, “subject also to the control of " the depositor, that fact, and in addition thereto, evidence that the depositor made declarations showing an intention to create a trust, is sufficient to establish a trust in favor of the person named.74

In a recently decided California case it was held that where a depositor directed the bank to alter his account so as to stand in the names of himself and his son, as

[ocr errors]

joint owners, payable to either or the survivor," the depositor created a trust in favor of himself and his son during their joint lives and that, upon the death of one, the balance then on deposit should go to the survivor. It was here held that the bank was the trustee, although it did not appear that the bank had any idea of becoming a trustee when it accepted the deposit. It is difficult to understand upon what theory the court reached the conclusion that the bank was a trustee. This is the only case which we have found where the bank was held to become a trustee of a joint or alternate deposit. There is no more reason for holding the bank a trustee in the case of a deposit of this kind than in the ordinary case of a deposit in the name of the depositor individually.75

72. Taylor v. Henry, (1878), 48 Md. 550; Bath Savings Institution v. Fogg, (1906), 101 Me. 188, 63 Atl. Rep. 731.

73. Pope v. Burlington Savings Bank, (1884), 56 Vt. 584. 74. Matter of King, (1906), 51 Misc. Rep. (N. Y.) 375. 101 N. Y. Supp. 279.

« PreviousContinue »