Bradford v. Eutaw Savings Bank

Marbury, C. J., delivered the opinion of the Court. Appellants are executors of William Bradford who died in Baltimore on August 1, 1944, testate and seized and possessed of three pieces of real estate, two in Baltimore and one in the State of Virginia. He also had, during his lifetime, three joint savings accounts. Two of these accounts, with which we are concerned here only incidentally, were in the name of the testator and his daughter, Viola, one in the Royal Oak Permanent Building Association in which the testimony shows there was on deposit the sum of $1,759.30, and one in the Provident Savings Bank which the testimony shows had credited the sum of $2,088.70.

The third account in the amount of $1,158.18 was in the Eutaw Savings Bank of Baltimore City, one of the appellees, and was opened by the testator on November 17, 1914. This account still stands in the form in which it was opened, which is “William Bradford in trust, until withdrawal hereof, for himself and Mabel B. Moore, joint owners subject to withdrawal by either, the balance at death of either to belong to the survivor.” Mabel Moore was the testator’s niece. She survived him, and is one of the appellees here. On March 23, 1945, appellants filed a bill of complaint in the Circuit Court No. 2 of Baltimore City, reciting ¹³⁰ their appointment and qualification, and asking the court to decree that the sum on deposit in the Eutaw Savings Bank was part of the assets of the estate of their testator.

With the bill, they filed as an exhibit, a copy of the testator’s will which, after a direction for the payment of debts and funeral expenses, made a bequest of $400 to testator’s sister, directed that his city properties be sold and the proceeds divided among his five living surviving children, gave the same children all of his cash or personalty, and gave them his homestead property located in Henrico County, Virginia, share and share alike. The bequest to his sister is contained in Paragraph II of the will. The wording of this paragraph bears an important relation to the issues in this case and will be more fully discussed hereafter. The appellee, Mabel B. Moore, filed a combined demurrer and answer, in the latter claiming that she is the owner of the deposit.

She also filed a cross-bill, alleging that the appellants had possession of the bank book evidencing the account, and praying that it be declared her property, and that the appellants be required to surrender it to her. The Eutaw Savings Bank filed an answer admitting the account, stating the exact balance in it at the time of the answer, and disclaiming any knowledge of the facts relating to the ownership of the account. The cross-bill was also answered by the Eutaw Savings Bank to the same general effect. The executors answered the cross-bill, admitted the possession of the bank book, but claimed that testator never intended that the funds should be held in trust for himself and Mabel Moore, and that the form of the deposit was issued merely for his convenience “as explicitly stated in his will.” On these pleadings, the case came on for hearing and testimony was taken in open court on May 24, 1945.

At the close of the testimony offered by the complainant, the court indicated there had been no proof sufficient to grant them the relief they prayed. Subsequently, the court indicated that it would be desirable that additional testimony be produced before any action was taken on ¹³¹ the cross-bill. The appellee, Mabel Moore, filed a petition, asking leave to take such testimony, and such leave the court granted forthwith, without any notice to the appellants. This testimony was taken on June 14, 1945.

The appellants objected to it below and object here, because they say it should have been taken at the first hearing, as the witnesses were then in court and the appellee closed her case without calling them. However, a chancellor has the power to allow defects in proof to be supplied at any time. Bailey v. Bailey, 186 Md. 76 , 46 A. 2d 275 . Such action is in his discretion and is not subject to review here (Trustees of German Lutheran, etc. v. Heise, 44 Md. 453 ) except where his action is arbitrary, and the rights of some of the parties are improperly affected.

When, in the judgment of the chancellor, the ends of justice will be subserved, this court has said that it is his plain duty to allow further proof to come in. Worthington v. Hiss, 70 Md. 172 , 16 A. 534 , 17 A. 1026 . We find nothing arbitrary in the action of the chancellor herein in this respect. On June 18, 1945, the chancellor filed his decree, adjudging Mabel B. Moore the owner of the deposit, mandatorily enjoining the Eutaw Savings Bank to pay the account upon her written order and directing the appellants to surrender the passbook.

The case comes here on appeal from this decree. Apart from the question of the right of the chancellor to reopen the case to hear additional testimony, which we have already disposed of, the case centers around the failure of the chancellor of give what the appellants claim was proper effect to Paragraph II of the will, and around the refusal of the chancellor to permit the lawyer who drafted the will to testify to a conversation he had with the testator about the time of, or prior to, the preparation of the will. Paragraph II of the will reads as follows: “I give, devise and bequeath to my sister, Susanna Johnson of Richmond, Virginia, the sum of $400.00 (four hundred dollars) if living at the time of my demise; the same to be taken from my bank accounts which are in joint names for my own convenience.” ¹³² The draftsman was asked what his client said to him which caused him to use the langauge in the last clause of this paragraph. This question he was not permitted to answer.

In addition to the contentions raised by these decisions of the chancellor which form the chief basis for the appeal, it should be noted that the appellants also claim that the fourth paragraph of the will, by which the testator gave to his surviving children all cash of which he died “seized,” when read in connection with Paragraph II, specifically revoked the trust created by the bank account. They cite in support of this contention, Restatement of the Law, Trusts, Sec. 58, page 183. Aside from the question, whether, under the law of this State, a testator can revoke a trust in a savings bank deposit by means of his will, we do not find in the will of the testator here (admitted in evidence for what it was worth) any intention on' the part of the testator to revoke. He makes no specific disposition of the deposit in question, nor does he make any disposition of his property which cannot be carried out except by using this deposit.

The testator had three joint accounts, any one of which contained more than sufficient money to enable the executors to pay the bequest mentioned in Paragraph II. If all were in the same form (which does not appear from the record), then the question might arise whether the testator did not intend to revoke each savings account to the extent of one-third of the bequest, or $133.33. But appellants do not make this contention. However, the Maryland decisions indicate quite clearly that a bank deposit trust is revocable only during the settlor’s lifetime by withdrawal of the fund.

Reil v. Wempe, 145 Md. 448 , at page 463, 125 A. 738 ; Gingher v. Fanseen, 166 Md. 519 , at pages 529, 530, 172 A. 75 . See Maryland Annotations to Restatement, Trusts, Sec. 58. In harmony with these decisions, we hold that such a trust cannot be revoked, either in whole or in part, by a will. ¹³³ Until the decisions of this court in the Whalen-Milholland cases, infra, in 1899, no form of savings bank deposit had been approved in this State which would permit the constructive passing of an account to one of two owners after the death of the other unless the passbook had been delivered prior to that event. In both of the two cases mentioned, in which Judge McSherry filed the opinions for the court on the same day, Elizabeth O’Neill made deposits in savings banks in which she named her sister, Mary Whalen, as joint owner.

In the first case (Whalen v. Milholland, 89 Md. 199 , 43 A. 45, 46 ) the entry was “Elizabeth O’Neill and Mary Whalen. Joint owners. Payable to the order of either, or the survivor.” Miss O’Neill died holding the passbook. There was a claim made by Mrs. Whalen that the passbook had been delivered to her prior to Miss O’Neill’s death, but this was not found to be a fact.

The court discussed the earlier cases, and stated that if there had been a delivery to and acceptance by Mrs. Whalen of the book, such delivery and acceptance would have been sufficient to effect a valid gift. Without such delivery, it was held that the deposit did not belong to Mrs. Whalen. In the second case (Milholland v. Whalen, 89 Md. 212 , 43 A. 43 , 44 L. R. A. 205) the entry on the passbook, and on the books of the bank was “Metropolitan Savings Bank, in account with Miss Elizabeth O’Neill. In trust for herself and Mrs. Mary Whalen, widow, joint owners, subject to the order of either; the balance at the death of either to belong to the survivor.” This is the form that has been generally adopted by the banks of the State since the decision we are now discussing, and it is, to all practical intents and purposes, the same form as that in the case before us.

The bank book was retained by Miss O’Neill and the court said that the deposit in that form created Miss O’Neill a trustee. Therefore, it was not necessary for the passbook to be turned over to Mrs. Whalen during Miss O’Neill’s lifetime as it was neither a gift inter vivos nor a gift