Opinion
Decided April 25th, 1940.
1. To establish a valid gift of the $25,000 here in question, defendant must show that there was an actual delivery of the money by her late husband, that he gave it to her with a donative intent, and that he stripped himself of all ownership and dominion over it.
2. In view of the confidential relation existing between the defendant and her late husband, the evidence to establish his intention of divesting himself of the possession of the money must be strong as to be inconsistent with any other intention.
3. Although defendant's testimony alone would be insufficient to sustain the delivery of the money in question as a gift, the testimony given in her behalf is convincing that her husband gave her the money as an absolute gift.
On appeal from a decree of the Court of Chancery advised by Vice-Chancellor Fielder, who filed the following opinion:
"The defendant, Louise W. Melosh, claims that on November 13th, 1935, her husband, William F. Melosh, gave her $25,000 as an absolute gift which claim complainant, as an executor of the estate of William F. Melosh, denies and by this suit seeks to establish ownership of said fund in the Melosh estate. The claim and denial present the issue here to be decided.
"Melosh was a resident of Jersey City. He was seventy-eight years old when he died and defendant was aged about seventy. They had been married forty years. In November, 1934, he met with a severe accident but was able to return to his business the following March and he attended thereto for several months thereafter. At the time of the alleged gift he suffered from a foot infection which confined him to his home but he went to his place of business in New York City a few times thereafter, and up to shortly before his death he was able to leave his home for automobile rides. He was associated in business with John S. Negus, and November 12th, 1935, he sent his check for $25,000 drawn on a New York bank to the order of cash, to Mr. Negus and requested him to cash the check and bring the money to him. The following day Mr. Negus cashed the check and brought the money to the Melosh home and gave it to Melosh who was then in bed, whereupon Melosh handed the money to defendant and Mr. Negus took a receipt for it signed by Melosh and defendant. The defendant claims that then and there a gift of $25,000 was made to her by Melosh. She testified that when he handed the money to her he said `Here is $25,000 for you Weezie [his familiar name for her]. Put it in your safe deposit box and don't let anybody get it away from you. Go to the bank as quickly as you can.' The bank was two city blocks from their residence and she went at once and placed the money in a safe deposit box in the bank, which box she had rented for several years in the name of herself and her daughter and returned home and told her husband she had followed his instructions. The entire amount, except $4,000 subsequently withdrawn, remained in the safe deposit box until the death of Melosh October 18th, 1937.
"To establish a valid gift the defendant must show, besides actual delivery of the money to her, that it was given to her with a donative intention on the part of her husband and that he stripped himself of all ownership and dominion over the money ( Swayze v. Huntington, 82 N.J. Eq. 127; affirmed, 83 N.J. Eq. 335; Bankers Trust Co. v. Bank of Rockville Center Trust Co., 114 N.J. Eq. 391) and, considering the confidential relation existing between the husband and wife, the evidence to establish Melosh's intention to divest himself of the possession thereof must be so strong as to be inconsistent with any other intention. Taylor v. Coriell, 66 N.J. Eq. 262; Farrow v. Farrow, 72 N.J. Eq. 421; Bardo v. Bardo, 92 N.J. Eq. 106; affirmed, Ibid. 230. The defendant's testimony alone is insufficient to sustain the delivery of the money to her as a gift. Berg v. Baldwin, 84 N.J. Eq. 90; affirmed, Ibid. 193; Heyer v. Sullivan, 88 N.J. Eq. 165; affirmed, Ibid. 595; Madison Trust Co. v. Allen, 105 N.J. Eq. 230; affirmed, 107 N.J. Eq. 183.
"Actual delivery of $25,000 by Melosh to defendant November 13th, 1935, is conceded. The words defendant testified Melosh spoke when he handed the money to her, import a gift and his instruction to her to put the money in her own safe deposit box to which he did not have access, indicates his intention to divest himself of possession and control over it. Corroboration of her story was given by Mr. Negus and by the latter's wife and daughter-in-law who had accompanied him to the Melosh home. Those three persons were present when Melosh handed the money to defendant. The testimony of Mr. and Mrs. Negus was that Melosh then said `Ma Weezie, this is for you. Don't let anybody take it away from you,' and Mrs. Negus testified further that he said, `Put it in your safe deposit box.' The daughter-in-law testified to the same effect, except that she did not testify that Melosh used the words `for you.' The daughter-in-law accompanied defendant to the bank, saw her place the money in her safe deposit box, returned to the Melosh home with defendant and heard defendant report to Melosh what she had done. Also in corroboration of defendant was the testimony of the daughter of the marriage, that two days after Melosh had handed the money to her mother, he made a gift to her of 100 shares of Consolidated Gas Co. stock for the college education of his grandson and that he then said to her, `I am giving you this for Clifford's education. I have just made a gift of $25,000 to mother and if she wants to do the same for Margo [his granddaughter] she can do it. It is up to her,' and thereafter on several occasions he told her (his daughter) that defendant would not have to worry after his death because she had plenty of cash. Complainant contends that the testimony of defendant and her daughter must be regarded with doubt and suspicion because of their interest. Let that be conceded, yet their testimony cannot be ignored and given no consideration. Complainant also questions the reliability of the testimony of the three members of the Negus family as to what actually was said by Melosh when he handed the money to defendant (especially the testimony of Mr. Negus who was over eighty years of age when he testified) on the ground that they were not disinterested witnesses and were attempting to relate in detail a conversation which had occurred four years prior to the time they testified. Although all three expressed the opinion, based on what they saw and heard, that Melosh intended to make a gift to defendant and said they believed she was entitled to keep it, they are not related to any of the parties and have no pecuniary interest in the outcome of the case and it is quite likely that a gift of $25,000 in cash made by a man to his wife in their presence, would be an event they would not forget and that they should be able to recall what the man said when he made it.
"Complainant argues that what Melosh said when he handed the money to defendant, as testified by defendant and the members of the Negus family, should be construed as expressing Melosh's intention and meaning to give the money to defendant for safe keeping to hold for him; that the situation of the parties and certain acts of theirs thereafter show there was no intention on Melosh's part to make an absolute gift to defendant and that he did not surrender control over the fund.
"Complainant is a member of the bar of this state. He was a brother of Melosh, and was named as an executor of his will. Complainant testified that a month before the alleged gift was made, Melosh told him he had $35,000 on deposit in a New York City bank and complainant advised him it was unwise to have so much money in a neighboring state because of possible inheritance taxes; that on November 13th, 1935, Melosh told complainant he had withdrawn $25,000 from his bank and had given it to defendant to put in a safe deposit box; that the day after Melosh's funeral, complainant said to defendant (who was named as co-executor with him in Melosh's will) that as soon as the will was probated, an estate bank account should be opened and the money in the safe deposit box deposited therein and that defendant replied, `This is my money. Will give it to me as a present just before he died,' that later defendant told him the money was given to her about a year and after it had come from New York; that on another occasion she told complainant it had been given her shortly after it came from New York. Complainant's son testified that he heard Melosh tell complainant that he (Melosh) was going to invest $25,000 in bonds; that he was at Melosh's house the day Mr. Negus brought the money over and heard Melosh say that Mr. Negus had brought over $20,000 and he had put it in defendant's box for safe keeping and that five days later Melosh told him the sum was $25,000; that the day after Melosh's funeral he heard defendant tell complainant that Melosh had given her $21,000 just before he died. Complainant did not testify that when Melosh told him he had given $25,000 to defendant, Melosh added that it was given merely for safe keeping. Complainant then knew that the money was in defendant's safe deposit box, yet if he did not think it had been given defendant as a gift it does not appear that as Melosh's brother, his legal adviser and executor named in his will, he then or at any other time advised Melosh that the money should be removed to a place over which Melosh had control. Defendant denies that she made the conflicting statements attributed to her as to the time she claimed Melosh had given her the money and in an affidavit made by complainant annexed to the bill of complaint, he stated that shortly after Melosh's death, when he asked defendant to deposit the money in a joint executor's account she said the gift had been made the day the money was withdrawn from the New York bank and his affidavit is silent as to any other statement made by her on the subject.
"Complainant contends that facts concerning a loan on bond and mortgage to one Galuchie are evidence that Melosh retained control over the $25,000 after handing it to defendant. Complainant in September, 1937, suggested to Melosh an $8,000 loan on Galuchie's bond and mortgage and his testimony is that Melosh said he would make the loan if he got a bonus of $400 but that he did not have a balance of $7,500 and would get $4,000 of the $25,000 in the safe deposit box; that the next morning, September 30th, he went to Melosh's home where Melosh gave complainant a $3,600 check on a New York bank and defendant came in with her hat and coat on and gave complainant $4,000 in cash; that he asked Melosh in defendant's presence how he wanted the mortgage drawn and Melosh told him to draw it in the name of David P. Smyth, which was a name Melosh had used in other mortgage transactions, and the bond and mortgage were so drawn, executed and recorded; that the bond was sent to Melosh at once and the mortgage was returned to complainant from the register's office November 12th, 1937. In the meantime Melosh had died and November 18th, 1937, complainant, defendant and two appraisers met in defendant's home to inventory and appraise Melosh's estate. Complainant testified that the Galuchie bond and mortgage were then produced (whether by complainant or by defendant is not established) and it was pointed out that they named Smyth as mortgagee. Complainant and the appraisers testified that the defendant at that time made no claim to an interest in the bond and mortgage and it was then listed by the appraisers as belonging to Melosh's estate.
"Investment in the Galuchie mortgage was made almost two years after defendant had placed $25,000 in her safe deposit box. Her testimony was that up to the time of that mortgage Melosh had suggested no investment for the money; that after complainant had spoken of a loan to Galuchie, Melosh told her to get $4,000 from the box to put in a mortgage which he said "would be a good investment for us" and she did so; that she had never had a mortgage transaction and that Melosh told her complainant would bring the mortgage and she could put it in the box. If Melosh had made her a present of $25,000 she would naturally have trusted him with any investment he proposed and she would have handed him $4,000 without question, leaving it to him to see that her investment was properly safeguarded. If the mortgage was wholly an investment for Melosh and he had but $3,600 in his New York bank account available for the investment, but owned $25,000 in her safe deposit box, it would seem that he would have required her to withdraw the entire $8,000 or $7,600 needed for the mortgage loan. Instead, fifty per cent. of the mortgage investment was with funds certainly his own and the other fifty per cent. was provided from funds he had given defendant. Defendant testified she had no recollection of the Galuchie mortgage being produced to the appraisers, or of hearing it spoken of in her presence. It is more than doubtful that she produced this particular mortgage to the appraisers, because it had not been returned to complainant from the register's office until three weeks after Melosh's death and since complainant had then qualified as an executor of Melosh's will, it is likely that he would have retained the mortgage and would have produced it to the appraisers. Be that as it may, when the mortgage was produced to the appraisers defendant was without business experience — death had taken her husband a month previous and she left it to complainant and the appraisers to attend to matters with which she was not familiar. Moreover it is doubtful that defendant knew the name of the mortgagor to whom her $4,000 had been loaned and since other mortgages in the name of Smyth as mortgagee were produced to the appraisers, it seems strange that the Galuchie mortgage should be the only one discussed.
"Complainant argues that defendant's failure to report to the federal government that she was the recipient of a $25,000 gift is evidence that the money was not given to her as a gift. I doubt that any wife, without business experience would know that such a gift was taxable and the defendant's explanation of her failure to report it is simple and credible — namely that she was unaware she was required by law to do so.
"Before the time of the alleged gift Melosh had been ill and at the time of the gift was confined to bed and he was advancing in years. His mind was on the future and on putting his temporal affairs in order, because several days prior to the withdrawal of the money from his New York bank he had discussed the terms of a will with complainant and he executed a will two days after delivering the money to defendant. Two days later he made a substantial gift for his grandson and had in mind a gift for his granddaughter. It was not unnatural that he should desire to make a gift to his marital companion of many years while he was considering the disposition of his property by will; perhaps he thought of saving transfer or inheritance taxes by doing so. According to witnesses present when he delivered the money to defendant, he delivered it without reservation. He told defendant to place the money in a locked box to which he had no right to access. He did not tell her to keep it for him or to keep it until he was able to get it and take charge of it himself, nor did he utter any words to indicate that he was delivering the money to be held in trust for him. He told her not to let anybody get it away from her and thereby he excluded himself from the right to demand it. If on withdrawing the money from the New York bank he meant to retain ownership over it, he could have secured a safe deposit box in his own name in the Jersey City bank so near his home, because it is quite conceivable that the bank would have been glad to send a representative to him to obtain his name on a signature card. If, however, that possibility did not occur to him (although he was a business man of long experience), it was not long after delivering the money to defendant that Melosh was able to get about by automobile and even go to New York City and if the money was his, he could readily have transferred it to a safe deposit box of his own, yet he left it in defendant's possession for two years, and up to the time of the Galuchie mortgage he had made no attempt to invest any part of it although the testimony of complainant and his son was that a reason Melosh gave for bringing it from New York was to invest it in stocks and bonds.
"The testimony on behalf of defendant is sufficient to convince me that Melosh gave $25,000 to defendant as an absolute gift with intention to divest himself of possession thereof and control thereover and I find that the evidence on behalf of complainant does not justify a contrary conclusion. I also find that defendant gave $4,000 of that money to Melosh to invest for her benefit in the Galuchie mortgage and that she should be adjudged to be the owner of a half interest therein."
Messrs. Milton, McNulty Augelli, for the appellant.
Messrs. Collins Corbin, for the respondent.
The decree appealed from will be affirmed, for the reasons stated in the opinion filed in the Court of Chancery by Vice-Chancellor Fielder.
For affirmance — THE CHIEF-JUSTICE, PARKER, CASE, BODINE, DONGES, HEHER, PERSKIE, PORTER, HETFIELD, DEAR, WELLS, WOLFSKEIL, RAFFERTY, HAGUE, JJ. 14.
For reversal — None.