Minchin v. Merrill

The Vice-Chancellor: The principal question is, whether there was an effectual gift of the money by the grandmother to the children and the father a trustee of the fund for their benefit ? For if so, then it would not pass to his personal representative as a part of his estate ; and there can be no difficulty in following it into the hands of the defendant. There is no pretence here of a testamentary gift. Nor can the circumstances in this case amount to a donatio mortis causa. It is upon the ground of a gift inter vivos that the claim of the children is urged. In order to render this description of gift effectual for any purpose, it is not only necessary to shew an intention to give but also an actual delivery of the thing given—there must be a parting with the possession and all control over the property by the donor and a vesting of the possession in the donee or a third person in trust for the donee. This is the well established doctrine in courts of law upon the subject and which courts of equity also are bound to regard. In addition to the cases referred to in Taylor v. The Fire Department, 1 Edwards, V. C. Rep. 294, may be cited Hooper v. Goodwin, 1 Swanst. 486, and Gaskett v. Gaskett, 2 Y. & J. 502. I consider the evidence makes out a case of a gift executed by Mrs. Thayer, a possession parted with, and all control over the fund relinquished on her part; and that Minchin became vested with it as a trustee for his children. It is true, the evidence does not show very explicitly what passed between the parties or what their mutual understanding was at the time the money was first received by Min-chin. He was empowered to make sale of the house and lot, execute the conveyance and receive the purchase money. And from these facts it is argued that he became the debtor of Mrs. Thayer for the money and not a trustee of it for his children. I consider, however, a trust was created at that time and the gift consummated. Mrs. Thayer was upwards of eighty years of age and had come to spend the remnant of her days in the family of her daughter and son in law ; and their children were, next to their mother, her only descendants. She had no longer any use for the money on her own account. Her services in the family, according to [338] testimony in this case, were an equivalent for her board ; and it was natural she should wish to place the money at . . . . , . _r, , once in a situation where it would be ot the greatest benefit to the family. She knew the embarrassed circumstances of her son in law and was, consequently, aware how the handing the money to him for the purpose of investing it in a stock of goods on his own account—thereby making it a debt against him—would be rendering the same liable for his previous debts ; while, by giving the money to the children and constituting their father a trustee, with permission to employ it in trade for the benefit of his family, it could not be attended with a like consequence. The declarations of both parties, which were so constantly made, are in accordance with this view of the transaction. Mrs. Thayer declared, not only that it was always her intention to give the money to the children, but that she really had given it— and spoke of the same as their money which their father held for them ; and in expressing her anxiety about its safety, it appears clearly that it arose for their sake and on their account, as owners of the fund and not on her own account as a creditor of Minchin. She intimated no design of withdrawing the money from the hands of her son in law or of reclaiming it as her own ; took no measures which a creditor would have made use of who was apprehensive that his debt was not secure ; and made no attempt to control the management or disposition of the fund as one belonging to himself or which was held in trust for her. Again, all the acts and declarations of Minchin show that he considered the money as belonging already to his children and not theirs merely in expectancy. He sold out his interest in the partnership when he became apprehensive his old creditors might attempt to interfere with the children’s rights and the money payable by the notes he spoke of as being their money and the notes as belonging to them. The taking of them in his own name and the intention to resume the possession on his return from the south is not inconsistent with the idea of a trust on his part: for, at the time of depositing them with Miss White for safe keeping, he acknowledged such a trust. I am not certain that his declarations and acknowledgments, though verbal, being made in good faith, as between [339] the children claiming to be cestuis que trust and the personal representative of the party admitting himself to be a trustee, 1 1 * ° may not be sufficient to prevent a devolution of the property upon the administrator: George v. Howard, 7 Price, 646. Lord Eldon, in Ex parte Dubost, 18 Ves. 140., speaking, in reference to the gift of an annuity which was claimed against an executor, observed that although in one sense it might be represented as the testator’s personal estate, yet the testator had committed to writing what seemed to be a sufficient declaration of his holding this part of the estate in trust for the annuitant. The Lord Chancellor had, in the same case before said, “ that upon an agreement (voluntary) to transfer stock, this court will not interpose, but if the party had declared himself to be the trustee of that stock, it becomes the property of the cestui que trust without more and the court will act upon it.” This principle may be applied here, even supposing it to have been a debt originally from Minchin to Mrs. Thayer. As a debtor, it appears to me that it was competent for him, with Mrs. Thayer’s assent and in conformity with her declared wishes, to convert the money owing by him to her into a trust fund for the benefit of his children, by setting apart securities or money in bags or bank notes in his possession, designating it to be trust property, and that such an act on his part would preclude his personal representative from claiming the property or fund as assets of his estate : Powell v. Cleaver, 2 Br. C. C. 500. 515. I go further. I consider no violence is done to the ev. idence by drawing the conclusion that there was a completely executed gift by Mrs. Thayer and such a vesting of the property in trust for the children that her administrator, upon evidence of what had taken place, could not have recovered the money in an action against Minchin as a debt due from him. The complainants are entitled to the money as a fund which belonged to them in their father’s hands—the same not having formed a part of his estate. The money is in court; the share of the adult complainant may be paid over to him, and those belonging to the infant defendants must remain invested until they come of age, while the interest [340] only (unless he gives the requisite security) is to be paid to their guardian. As to costs. The complainants claim them against the defendant Merrill; while he insists upon being entitled to his costs out of the fund. He became administrator with the assent of one of the complainants, who was competent to give such sanction. The appointment of an administrator was, in all probability, necessary for the purpose of collecting the money from the maker of the notes. ' They were made payable to Minchin ; he does not appear to have endorsed or negotiated them; and there might, therefore, have been a difficulty in enforcing payment except through the medium of a legal representative of the deceased payee. The defendant appears to have acted in good faith .and from good motives even towards the children. At the time he applied for the notes, he avowed his object to be the collection of the móney for the children, provided, as it must be understood, that they should turn out to be the owners and entitled to it; and when he got the notes into his possession and received the amount of them, it was a difficult question for him to determine whether he would be safe in paying the money over to the children instead of claiming to hold it as assets for the payment of the father’s debts. In some measure he stood in the situation of a trustee who requires the direction of the court for his protection ; and under all circumstances, it is not unreasonable to allow the defendants, as well as the complainants, their costs, out of the fund.