Danz v. Schafer

⁵² Moylan, J., The issue squarely before us on this appeal is the standard for reviewing a verdict rendered by a trial judge sitting without a jury on the basis of an agreed statement of facts. If it is standard A, we shall affirm; if it is standard B, we shall reverse. The issue could not be more cleanly joined. The appellant, Thelma Danz, is the Personal Representative of the Estate of the late Jean Rita Winters.

She sued the appellees, Nora P. Schafer and Charles E. Schafer, wife and husband, for approximately $8,000 allegedly owed by the Schafers to Mrs. Winters. Mrs. Winters had been Nora Schafer’s aunt. The Schafers, defendants below, had defended on the theory that they had received the money from Mrs. Winters as a gift. The case came on for trial before Judge Edward A. DeWaters, Jr., in the Circuit Court for Baltimore County.

No witnesses were called and counsel for both sides elected to proceed on an agreed statement of facts. That statement was as follows: "[0]n October 2nd, 1973, Jean Rita Winters established an account, savings account in the Baltimore County Savings and Loan Association, Incorporated, at Belair and Joppa Roads, Baltimore, Maryland 21236, which account was numbered 3336. The account was established in trust for the defendant, Nora Patricia Schafer, joint owners, subject to the order of either, balance at the death of either to belong to the survivor. I have a copy of that particular account.

I have the passbook in question. I will offer, with no objection of counsel, a copy of the account. No objection. * * * MR. MARR: Immediately after the account was opened, the passbook in question was surrendered and submitted to the defendant, Nora Patricia Schafer.

Thereafter, of course, there were additional payments made into the account by the plaintiff, ⁵³ Jean Rita Winters, or the then, the former plaintiff in this case, Jean Rita Winters, who, as the record should show, the aunt of the defendant, Nora Patricia Schafer. Thereafter, on September the 30th, 1974, Jean Rita Winters withdrew from the account seven thousand two hundred dollars, and gave those funds to the defendant, Nora Patricia Schafer. It should be noted, at this point, that the withdrawal was made with the execution of the signatures of both Jean Rita Winters and Nora Patricia Schafer. Thereafter, Jean Rita Winters asked that the funds in question be returned to the account, and the defendant, along with her husband, Charles E. Schafer, executed, on Thursday, July 3rd, 1975, an instrument which reads as follows: "On September 30th, 1974, Mrs. Jean Winters withdrew from Baltimore County Savings and Loan Association, Incorporated, account number 3336, in the name of Jean Rita Winters, in trust for Nora Patricia Schafer, the sum of seventy-two hundred dollars, for the purpose of a personal loan to incorporate and pay loans iii the name of Charles E. and Nora P. Schafer.

We do hereby promise to pay Mrs. Jean R. Winters the principal amount of seventy-two hundred dollars and interest at annual rate of six and one-quarter per cent on the balance due to account number 3336, in portions as soon as our finances enable us to do so. In the event of our death, the estate is to pay to the account the full balance remaining of the said amount. Signed, Charles E. Schafer and Nora P. Schafer.” I would like to make this notarized copy, I might add, I would like to make that Exhibit 2.” ⁵⁴ Before the execution of this document, and, in fact, the copy of the passbook, which your Honor has before you, reflects this: On June 10, 1975, the defendant placed one hundred dollars in the account; On June 27, 1975, an additional one hundred dollars into the account, and on the day that the instrument in question was executed by the defendant and her husband, she placed an additional eighty dollars into the account. Thereafter on August the 14th, 1975, an additional one thousand dollars was taken from the account by Jean Rita Winters, and given to Nora P. Schafer, the defendant herein.

Subsequent to that time, Jean Rita Winters has made demand for the payment of the eighty-two hundred dollars plus interest, and we are submitting the matter to your Honor for a determination of the rights and liabilities of the parties herein. I might add that as Exhibit 3, I would like to present to the Court the check that was drawn on August 14th, 1975, from this account, and endorsed, and showing it was deposited to the account of Nora P. Schafer, the defendant herein. That will be Exhibit 3, and that would conclude the statement of facts.” Let it be noted that although in this case there is no dispute as to any of the first-level facts such as who said what to whom and where and when (and the credibility of witnesses has, therefore, no bearing on the decision), there yet remains a fact-finding issue to be resolved — the high-level fact finding of what to make of those first-level facts. From those arguably ambiguous first-level facts, the fact finder must come up with an ultimate, second-level fact.

Does one infer from the undisputed physical phenomena and the undisputed conduct of the parties that Mrs. Winters made a gift of the money to her niece or does one infer that she made a loan? Even observing the same event, reasonable minds might read into it different significances. Judge ⁵⁵ DeWaters, for his part, recognized that two contrary meanings could be drawn from the undisputed evidence: "The primary issue before this Court is whether the transaction between the parties was in the nature of a loan and thereby created an indebtedness, or a valid inter vivos gift thereby extinguishing the Plaintiffs claim.” Judge DeWaters went on correctly to outline the essential elements for a valid inter vivos gift as spelled out by the Court of Appeals in Rogers v. Rogers, 271 Md. 603 , 319 A.2d 119 . Against that standard, he measured the undisputed facts in the instant case and the inferences (here is the critical area of dispute) that might fairly be drawn therefrom and rendered his ultimate opinion (a blend of the undisputed events and the disputed inferences) as follows: "The facts stipulated to clearly reveal that there was a 'delivery of the subject of the gift ($7,200.00) that completely divested the donor of dominion and control’ Brooks v. Mitchell, 163 Md. 1 , 161 A. 261 , 84 A.L.R. 547 (1932), and that there was an 'acceptance by the donee and an exercise of dominion and control over the subject of the gift’, Pomerantz v. Pomerantz, 179 Md. 436 , 19 A.2d 713 (1941).

The court must now determine whether the facts as stipulated to evidence 'a clear and unmistakable intention on the part of the donor to make a gift’ Burleigh v. Miller, 209 Md. 57 , 120 A.2d 378 (1956), on September 30, 1974. In making its determination the court must weigh the facts and surrounding circumstances of the case. The facts indicate that: first, Mrs. Winters approached Mrs. Schafer and suggested that they make a withdrawal of Seven Thousand Two Hundred Dollars ($7,200.00) from their joint banking account; secondly, on September 30, 1974 the $7,200.00 was withdrawn under both Mrs. Winters’ and Mrs. Schafer’s signatures; thirdly, on that same ⁵⁶ date the $7,200.00 was transferred from the dominion and control of both Mrs. Winters and Mrs. Schafer to the sole dominion and control of Mrs. Schafer with the written consent of Mrs. Winters, evidenced by her signature on the withdrawal slip. It is of fundamental importance to emphasize that at no time, during the delivery and acceptance of the $7,200.00 on September 30, 1974, did Mrs. Winters indicate that she expected any form of monetary reimbursement.

It is this court’s opinion that on September 30, 1974 there was a gratuitous delivery by Mrs. Winters of title and possession of $7,200.00, and there was an unequivocal acceptance by Mrs. Schafer of title and possession of $7,200.00. The facts and circumstances surrounding the case demonstrate a clear and unmistakable present intention on the part of Mrs. Winters to make a gift of the $7,200.00.” Following the critical day of September 30, 1974, there did, to be sure, occur some very significant actions on the part of the Schafers. They signed a promissory note indicating that ten months earlier the delivery to them of $7,200.00 had been a personal loan. They did, moreover, make several deposits into the joint bank account.

These actions could, in the view of a particular observer, indicate that the original intention of Mrs. Winters even as of September 30, 1974 had been to make a loan. Some other observer, however, in his prerogative, might choose to view the gestures as calculated merely to placate a loved one — or, more cynically, perhaps, a potential Santa Claus or potential Daddy Warbucks — and thereby avoid the possible loss of possible future largess. For his part, Judge DeWaters gave little significance to the events post-September 30, 1974: "It is important to understand that the later disagreement between the parties and the subsequent signing of a promissory note on July 8, 1975, cannot invalidate Mrs. Winters’ clear intention to give the $7,200.00 to the Schafers ten ⁵⁷ months prior. Concerning the additional One Thousand Dollars ($1,000.00) claimed due and payable by the Defendants to the Plaintiffs, the court refers to the factual stipulation wherein it is stated that on August 14, 1975 Mrs. Winters made a withdrawal of One Thousand Dollars ($1,000.00) and gave same to the Schafers.

The wording of the stipulation clearly evidences: (1) an unequivocal intention by Mrs. Winters to give the $1,000.00 to the Schafers, (2) a delivery of the $1,000.00 by Mrs. Winters, and (3) an acceptance of the $1,000.00 by the Schafers.” From all of the above, he rendered his final judgment: "Thus, the above stated facts are in compliance with the requisites and essential elements necessary to create a valid inter vivos gift. The September 30, 1974 transfer of $7,200.00 has been determined to be a gift, therefore, the issue before this court concerning the promissory note has become moot.” Shall we affirm or shall we reverse? It all depends upon the standard of review. Maryland Rule 1086, setting forth the appropriate standard of appellate review in a non-jury case, provides quite simply: "When an action has been tried by the lower court without a jury, this Court will review the case upon both the law and the evidence, but the judgment of the lower court will not be set aside on the evidence unless clearly erroneous and due regard will be given to the opportunity of the lower court to judge the credibility of the witnesses.” If the clearly erroneous standard is the pertinent one in a case submitted to the court on an agreed statement of facts, we shall affirm.

The facts that were agreed upon were sufficiently ambiguous to permit a reasonable mind to infer that there had been a perfected gift. By the same token, such an inference would be permitted but would not be compelled. ⁵⁸ A reasonable mind might also decline to draw such inference. It is to resolve just such ambiguities that we have fact finders, be they judges or be they jurors. Either to infer a loan or to infer a gift would fall within the legitimate range of fact-finding prerogative.

What we three appellate judges might infer from the same undisputed facts, were we the fact finders, is beside the point. To choose one resolution of the ambiguity from within a range of legitimate resolutions would not be an error on the part of the fact-finding trial judge, whether we would have made the same choice or not. If, then, this be the standard, we shall affirm the judgment of Judge DeWaters for the judgment rests upon a finding of fact that is not clearly erroneous. Mulfinger v. Mulfinger, 114 Md. 463 , 79 A. 1089 ; Milholland v. Whalen, 89 Md. 212, 43 A. 43 .

Initially disturbing, however, is the fact that both the appellant and, more remarkably, the appellee urge upon us a quite different standard of review. They both look to Burleigh v. Miller, 209 Md. 57 , 120 A.2d 378 , and extract from the language of that case a conclusion that we are not bound by the "clearly erroneous” standard in the present evidentiary posture but are at liberty to set aside the fact finding of the trial judge and to substitute our own fact finding. In Burleigh v. Miller, the Court of Appeals said at 209 Md. 68 : "Of course, where the trial judge actually has the opportunity to see the witnesses and observe their manner of testifying, his finding of facts from their testimony is not set aside by this Court on appeal unless such finding was clearly erroneous. This rule does not apply where he does not see or hear the witnesses.

Schneider v. Menaquale, 187 Md. 202, 204 , 49 A.2d 330 ; Donigan v. Donigan, 208 Md. 511 , 119 A.2d 430 . Here, the trial judge had no greater opportunity to judge of their credibility than does this Court.” (Emphasis supplied). In his brief, the appellee cites Burleigh v. Miller and concludes, "this court is free to substitute its judgment on ⁵⁹ the facts for that of the trial judge . . . but it must consider only those facts which were before the trial judge.” At oral argument, both the appellant and appellee talked to this Court as if to a jury. They attempted to persuade us as if we were