IN RE: GAINES' ESTATE.*

Reset A A Font size: Print

District Court of Appeal, Second District, Division 2, California.

IN RE: GAINES' ESTATE.* ANDREWS v. CALIFORNIA TRUST CO.

Civ. 12292

Decided: July 17, 1939

J.B. Irsfeld, Douglas Fawcett, and James B. Irsfeld, Jr., all of Los Angeles, for appellant. George E. Farrand and Edward W. Tuttle, both of Los Angeles, for respondent.

Appellant and respondent who are coexecutors of the will of Charles A. Gaines, deceased, filed separate accounts in the probate court. In appellant's account it is alleged that certain shares of stock, promissory notes and cash are owned by him in his individual capacity by virtue of certain joint tenancy agreements with decedent. In respondent's account it is alleged that the property claimed by appellant individually belongs to the estate. Each party filed exceptions to the account of the other and trial was had upon the issues thus presented. From an order of the court settling and approving the account of respondent and denying approval to the account of appellant this appeal is taken.

Charles A. Gaines died on October 4, 1936. Appellant was his grandnephew, the grandson of a surviving sister. During the summers of 1924 and 1928 appellant spent several weeks with decedent. During the years of 1933 and 1934, appellant saw decedent one or more times a week and on some occasions acted as secretary for him. On January 2, 1934, decedent went alone to a branch of the Seaboard National Bank and asked to rent a safe deposit box, stating that he wished to have appellant sign the contract with him. At that time an employee of the bank asked decedent if he wished appellant to sign as agent or as joint owner, showing him two forms of contract. After reading both forms he selected the joint tenancy form of contract. He was then told by the bank employee that the form of contract which he had selected when signed, would make the contents of the box belong to both decedent and appellant and upon the death of either, the contents would belong solely to the survivor. Decedent then signed the joint tenancy contract in the presence of the bank employee and thereafter on January 23, 1934, appellant also signed the contract at decedent's request and in his presence and in the presence of a bank employee. The contract, which appellant read at that time, provides in substance that decedent and appellant agree with each other and declare to the bank that they have rented the box as joint tenants, with right of survivorship, and that all property contained therein and which may thereafter be placed therein shall be their property as joint tenants with full rights of possession to the survivor in the event of the death of either. The rent for the box was paid by decedent. Each party received a key to the box. In December, 1934, appellant returned his key to decedent stating that he was returning to Ohio and he would be there for a considerable period of time and was afraid that he might mislay it. Decedent accepted the key, agreeing to keep it for appellant. The key was returned to appellant following decedent's death in an envelope which contained a letter dated December 20, 1935, addressed to appellant and signed by decedent. The letter was found in decedent's office safe. Appellant did not place any of his property in the box at any time.

Decedent in August, 1934, again went to the Seaboard National Bank where he had commercial and savings accounts in his individual name and asked for the proper signature cards to change these accounts to joint accounts with appellant. The cards were given him although he did not sign them at that time. On September 1, 1934, appellant signed the joint tenancy commercial account card at decedent's request, it having been theretofore signed by decedent, and the card was returned to the bank on the same day. Appellant signed the joint tenancy special savings account card, which had been signed by decedent, on September 5, 1934, and it was returned to the bank on the same day. Both of these joint tenancy cards provide in substance that appellant and decedent agree with each other and with the bank that all sums theretofore or thereafter deposited by either of said joint depositors shall be owned by them jointly with right of survivorship.

At the time of decedent's death the safe deposit box contained 12,228 shares of common stock of Gillette Safety Razor Company standing in the name of decedent alone, which were valued at $175,000, five promissory notes for a total amount of $25,000, payable to decedent and his wife, said notes representing the balance due upon an agreement for the sale of real property, which was also in the box. There was on deposit in the joint tenancy commercial account the sum of $1,591.10 and in the joint tenancy savings account the sum of $33,344.68. The court found that all of the above-mentioned property was, immediately prior to being deposited in said safe deposit box and accounts, the separate property of decedent. In addition to the joint tenancy accounts decedent had six or eight other individual accounts in various banks, the total amount on deposit in these accounts being approximately $28,000.

Decedent's will, which was executed on March 3, 1936, disposes of an estate the appraised value of which, exclusive of the above-mentioned property, is more than $483,000. The will makes no mention of the joint tenancy instruments, nor does it specifically mention any of the property covered by said joint tenancies. The will disposes of the major portion of the estate to appellant and respondent to be held in trust for a period of fifteen years, during which time the beneficiaries of the trust estate are to receive the total sum of $8,050 per year from the net income, which, leaving out of consideration the joint tenancy property, amounts to approximately $16,000 per year. Appellant is not named as a beneficiary but the will provides that he shall receive part of the trust estate upon the termination of the trust.

Appellant returned to Los Angeles on October 9, 1936, with the remains of his deceased uncle. At that time respondent delivered the letter dated December 20, 1935, which contained the key to the safe deposit box. Decedent had written on the envelope, “Wire Fred Andrews come here at once, C.A.G. Please deliver to Mr. Andrews.” The letter follows: “Dear Freddie: Enclosed please find the key to my safe deposit box in the Seaboard Nat. Bank, Hollywood Blvd. at Whitley, which is in our joint names, said box contained most of my securites, stocks, deeds, etc. from my bank account which is in the name of my wife and self you can draw checks for your and her allowance as provided by my will, all other beneficiary payments to be held up until my estate is settled. You can immediately get in touch with California Trust Company, co-executor and start work on settling the estate. Sincerely, Uncle C.A. Gaines.” After reading the letter appellant stated to certain of respondent's officers that he did not understand just what his uncle meant by the letter. Appellant read the will and noted the forfeiture clause which provided in substance that any beneficiary who contested the will would receive the sum of $1 in lieu of his share of the estate.

Appellant points out that the written contracts creating the joint tenancies in both the bank accounts and the contents of the safe deposit box are in clear language and contends that the court erred in admitting parol evidence to vary the terms of these contracts. He cites section 1040 of the Civil Code and a number of cases, among them Kunz v. Anglo & London Paris Nat. Bank, 214 Cal. 341, 5 P.2d 417. Respondent contends that the court properly admitted proof to establish a contemporaneous oral trust agreement and that the parties did not intend to create joint tenancies. We deem it unnecessary to decide whether the court made errors in its rulings on the admission of testimony, since we are satisfied that the evidence is insufficient to sustain the finding of the trial court that it was the understanding and intention of decedent and appellant that if appellant survived decedent he would take and hold the property in litigation in trust for the estate.

The contracts standing alone undoubtedly make appellant the exclusive owner of the property in controversy as the surviving joint tenant. To offset this condition respondent must depend upon (a) testimony concerning statements made by appellant after the death of decedent, (b) the letter written by decedent to appellant and (c) the conduct of appellant in delaying his assertion of ownership in the property.

Appellant was sworn as a witness but nothing appears in his testimony to establish an oral agreement that the property should be held otherwise than in joint tenancy. Counsel for respondent laid the foundation for impeaching testimony by asking appellant if he had not made the statement that decedent had told him that he wanted the cards signed so that appellant would have ready access in the event of his death and facilitate the handling of the estate. To this the appellant replied that he did not recall making the statement. Thereafter respondent presented as witnesses certain officers of the respondent corporation who testified that appellant had told them, after the death of decedent, that decedent had stated at the time the cards were signed that it was being done to facilitate the handling of the estate after his death. Conceding that this testimony was admissible for the purpose of impeachment, it could not be used for the purpose of substantiating the issues presented by respondent. Moffatt v. Lewis, 123 Cal.App. 307, 11 P.2d 397; Goodwin v. Robinson, 20 Cal.App.2d 283, 66 P.2d 1257. Respondent sought to prove its affirmative issues by hearsay upon hearsay, a course which may not be permitted. In Humphrey v. Pope, 1 Cal.App. 374, 82 P. 223, 225, the court effectively stated the rule: “Declarations and admissions, whether a part of the res gestae, or admissible under other exceptions to the rule excluding that character of evidence, are hearsay, and to permit them to be proven, by one other than the person hearing the statements from the lips of the declarant, would be to prove hearsay by hearsay, and this is not permissible. [Citing cases.] Yet that would be the effect of permitting plaintiff to testify as to what her husband told her touching defendant's declarations and acts.”

The letter written by decedent to appellant transmitting the key to the safe deposit box is of little if any, aid to respondent in establishing its allegations. Respondent points out that the letter refers to “the key to my safe deposit box” and to “my securities” as an indication that the box was not in joint tenancy. On the other hand, appellant points out that the letter directs him to draw upon a bank account other than those in joint tenancy to secure funds for the payment of allowances to his widow and to appellant. The letter may not be seriously considered as establishing a trust.

Respondent lays stress upon the fact that appellant did not claim that the bank accounts and contents of the safe deposit box were his own property until several months had elapsed after the death of decedent. Emphasis is also placed upon the fact that appellant made a trip to obtain information concerning some of the corporate stock in the box and charged his expenses to the estate; that he at first not only disclaimed ownership, but stated to officers of respondent corporation “that he knew that his uncle had not intended that for himself individually, but that his uncle had not told him what he did have in his mind; that he felt that his uncle had intended that that money should be used for estate purposes and he thought there were possibly some things that he wanted taken care of that he had not cared to put in his will, and that he thought that probably if his uncle had lasted longer and had had an opportunity, he might have disclosed those things to him.” It must be borne in mind that appellant was one of the remaindermen taking after termination of the trust estate and that the will provided that if a beneficiary should contest the will he would be cut off with the sum of $1; also that the question of the ownership of the property in dispute involved legal problems which could not be easily or quickly decided. His delay in asserting rights of ownership could not be taken as proof of respondent's allegations. Testimony concerning appellant's opinions, feelings and thoughts regarding decedent's intentions in executing the joint tenancy instruments was not admissible in evidence. Statements or admissions relating to questions of law may not be admitted in evidence, since a party should not be bound by statements which may be attributed to a misapprehension of his legal rights. 22 C.J. 298. The further statement that he knew that his uncle had not intended the property for himself individually might be admissible as an admission against interest, an oral admission which under the express provisions of the code is to be viewed with caution. Code Civ.Proc. § 2061, subd. 4. As stated in Hotaling v. Hotaling, 187 Cal. 695, 707, 203 P. 745, 750, “evidence of oral admissions, particularly where inferential rather than direct and explicit, is about the most unreliable and uncertain evidence that can be produced”. The admissions of appellant were inferential and not direct or explicit. The evidence concerning the admissions is so lacking in substantiality that it cannot be held that the allegations of respondent are sufficiently supported.

There is an additional reason why the judgment must be reversed as to the property involved in the two bank accounts which were put in joint tenancy by instruments in writing. Section 15a of the Bank Act provides: “When a deposit shall be made in any bank by any person or persons whether minor or adult in the names of such depositor or depositors and another person or persons, and in form to be paid to any of them or the survivor or survivors of them, such deposit and any additions thereto made by any such persons after the making thereof, shall become the property of such persons as joint tenants, *. The making of the deposit in such form shall, in the absence of fraud or undue influence, be conclusive evidence, in any action or proceeding to which either such bank or the surviving depositor or depositors may be a party, of the intention of such depositors to vest title to such deposit and the additions thereto in such survivor or survivors.” Vol. 1, Deering's Gen.Laws (1937), Act 652, p. 207. The language of the instruments creating the joint tenancies is free from ambiguity and the intention of the parties in executing the agreements is clear. No claim was made at the trial that the instruments were the result of fraud or undue influence. The presumption that appellant became the sole and exclusive owner of the money on deposit at the time of decedent's death becomes conclusive and irrebuttable. Wallace v. Riley, 23 Cal.App.2d 669, 74 P.2d 800; Estate of Fritz, 130 Cal.App. 725, 20 P.2d 361; Hurley v. Hibernia Sav. etc. Soc., 126 Cal.App. 314, 14 P.2d 574.

Respondent advances the argument that since the court found that appellant agreed to hold the money on deposit in the bank accounts in trust for the estate, appellant by his subsequent repudiation of such agreement is guilty of fraud within the express exception contained in section 15a of the Bank Act. Clearly such argument is fallacious, for there is no evidence of any fraud in the execution of the contracts. The fraud contemplated by the exception in question is fraud in the execution or inducement of the joint tenancy agreement, not fraud occurring subsequent thereto.

A dividend check in the sum of $3,057, dated September 30, 1936, was found in decedent's office after his death. This check was for dividends upon shares of stock which were in the safe deposit box. In view of our conclusions as to the ownership of the contents of the safe deposit box it is clear that this check should be held to be the property of appellant.

The order is reversed.

WOOD, Acting Presiding Justice.

I concur: McCOMB, J.