Myers’ Estate 248 Pa. 76

Myers’ Estate.

Decedents’ estates — Money paid to decedent — Loans—Gifts— Intention.

Where a decedent several months before his death gave to his divorced wife $17,000 to fulfil a moral obligation, and she placed such sum in trust with power of revocation, and thereafter decedent requested the return of the money, and the wife after revoking the trust, complied with the request, the inference could not be drawn from such facts that the divorced wife loaned such money to decedent, and a claim therefor against his estate was properly disallowed.

Argued Jan. 5, 1915.

Appeal, No. 127, Jan. T., 1914, by Estella D. Myers, from, decree of O. C. Philadelphia Co., Oct. T., 1913, No. 202, dismissing exceptions to adjudication in estate of Charles E. Myers, Deceased.

Before Brown, C. J., Potter, Elkin, Stewart, Moschzisker and Frazer, JJ.

Affirmed.

Exceptions to adjudication.

The facts appear in the following excerpt from the adjudication of Gest, J.:

The facts upon which this claim is founded are somewhat unusual and have been the subject of careful consideration by the auditing judge. In order to understand them, it is advisable that they be recited in chronological order. Estella D. Myers, the former wife of the testator, was divorced from him at a date not appearing in the testimony. On May 1, 1911, while the divorce suit was pending, the testator, Charles E. Myers, executed a deed of trust to the Commonwealth Title Insurance & Trust Company, reciting this fact, that the libellant was about to enter a rule for alimony and that the parties desired to adjust the question of alimony without the necessity of such rule. Accordingly, Myers agreed to deposit the sum of $30,000 with the Common*77wealth Title Insurance & Trust Company ánd to purchase a dwelling house for the said Estella D. Myers, his then wife, to cost between $5,000 and $6,000, for her use during her life, and to pay the taxes, water rent and fire insurance and the cost of the necessary repairs during that period, and further to deliver certain household furniture and pay $1,000 in cash to said Estella D. Myers. The trust deed provided that the Commonwealth Trust Company should invest the. said sum of $30,000, and pay the income to Mrs. Myers, and at her death the said fund with any real estate included in the trust should be paid and conveyed to Myers if he were' living and if he should be dead to such persons as might be directed by his last will or in default thereof to his heirs and next of kin under the intestate laws.

On July 1,1911, the parties executed a supplementary deed of trust, by which Myers agreed to convey to the Commonwealth Trust Company in lieu of the dwelling house referred to in the first agreement certain premises in Green Lane in trust to permit Estella D. Myers to use and occupy the same for the term of her life and on her decease in trust to permit Carrie Graeves to occupy the same for the term of her life and on her decease the real estate or the proceeds thereof should be paid or conveyed as provided in the deed of May 1, 1911, together with certain other unimportant modifications not necessary to be recited. The terms of the agreement as thus modified, were carried out.

According to the testimony of Dr. James D. Schofield, a friend of Myers and associated with him in the practice of medicine, he was told by Myers, in January, 1912, that he had not treated his wife right; that he would give anything in the world to undo what he had done and that he intended to do everything possible for her while he lived. In that month Myers twice gave the witness money to give to Mrs. Myers, which the latter paid to her without counting it, and Myers also, accompanied by the witness, called at Mrs. Myers’ resi*78dence on Green Lane. In that month, January, 1912, Myers went to the South and told the witness that he had provided for Mrs. Myers as best he could, and if he could, he would give her the whole damn business. It further appeared that on or about January 18,1912, the testator gave a $1,000 Richmond & Washington four per cent, bond to Mrs. Myers, which was sold by a broker at the instance of the Commonwealth Trust Company, to which Mrs. Myers gave the bond for that purpose, and the proceeds of said bond, $985.22, were placed by the trust company to the account of Estella D. Myers.

On January 18,1912, Myers borrowed from the Manayunk National Bank $17,000 on his note, depositing as collateral certain securities and it was practically admitted by all parties that this sum so borrowed was paid over by Myers' to Estella D. Myers, though how the payment was made did not affirmatively appear. Mr. Zug, the trust officer of the Commonwealth Trust Company, testified that Myers had previously stated to the witness his intention to make some further provision for Mrs. Myers. On January 24,1912, Estella D. Myers executed a deed of trust to the Commonwealth Trust Company as trustee in trust to invest the same and pay over the income to her, reserving the right, on ten days’ notice in writing, to terminate the trust and to receive back from the Commonwealth Trust Company the said moneys or such proportion thereof as she might request.

On February 6, 1912, Myers, being then in-Florida, wrote two letters, one to Estella D. Myers as follows: “Miami, Biscayne Bay, Fla., Feb. 6, 1912. Mrs. Estella D. Myers. Dear Madam: I have improved so much that I have decided to return the money that I left in your keeping thereby avoiding interest on the same and Mr. Preston will arrange with you for the return of the same and give you a proper receipt for same. I have written to Mr. Preston to that effect. Respectfully, Charles E. Myers.” The other letter was addressed to Edward H. Preston, the president of the Manayunk National Bank, *79as follows: “Miami, Biscayne Bay, Fla., Feb. 6, Í912. Mr. Edward H. Preston. Esteemed Friend: Your letter received, regarding the matter I wrote you about. I have improved so much that I think best to cancel the loan and save the interest expense. The money was placed in Mrs. Myers’ care, so that if anything happened to me she would be better provided for. This was purely my own thought and in no way influenced by her. The money is in cash in a box in the safety vault of the Commonwealth Trust Company, Twelfth and Chestnut street. If you will kindly call on her at 170 Green Lane, Myk., and arrange to have her meet you at the trust company and she will return the money to you and you can give her a receipt for the same. You can also send me a receipt for the money stating that the loan has been paid off and that the securities are in your care at the bank. Let the transaction with Mrs. Myers be of a purely private nature so far as any bank proceedings are concerned. Truly yours, Dr. Chas. E. Myers. My address will be Hotel Alcazar, St. Augustine, Florida.”

On receipt of this letter Preston sent it to Mrs. Myers, who returned it to him, at which time he had an interview with Mrs. Myers, who was in doubt whether she should pay the money. Mr. Preston told her that it was a matter for her to decide herself, the bank having sufficient collateral for the loan. Mr. Preston testified that he saw Estella D. Myers on another occasion and told her it was for her to determine whether she would pay the money or not. On February 13, 1912, Estella D. Myers revoked the deed of trust of January 24, 1912, by writing delivered to the trustee as follows:

“Philadelphia, Pa. Feb. 13, 1912.

“I hereby exercise the power reserved to me under the deed given by me to the Commonwealth Title Insurance & Trust Company, dated- January 24th, 1912, conveying to them in trust the sum of $17,000 in cash, and I hereby terminate said trust and request said company to turn over to me the estate.

“Estella D. Myers,” *80In accordance with this notice, the Commonwealth Trust Company, as trustee, gave to Estella D. Myers its check dated February 23, 1912, on Franklin National Bank to the order for $17,000, which was endorsed by Mrs. Myers and given to the Manayunk National Bank, the president of Avhich, Mr. Preston, gave her a receipt as follows: “Philadelphia, Pa., Feb. 23, 1912. Received of Mrs. Estella D. Myers seventeen thousand dollars ($17,000) to be used in payment of loan of the same amount of Charles E. Myers. Manayunk Natl. Bank, by Edw. H. Preston, president.” The check was placed to the credit of the account of Charles E. Myers with the bank and was produced at the audit showing the following endorsement: “Pay Myk. National Bank or order Estella D. Myers. Manayunk Natl. Bank, Edw. H. Preston, Presdt. Received payment Feb. 23, 1912, 39. Through the Clearing House.” The note was returned with the check drawn against the account and the securities deposited as collateral with the Manayunk National Bank were retained until Myers’s death and were then delivered to the executor.

Under these circumstances it was claimed on behalf of Estella D. Myers that her payment of $17,000 to the Manayunk National Bank was not a payment of the loan or a gift to the decedent, but intended as a loan to him to be repaid to her after the decedent returned to Philadelphia, and that Estella D. Myers was entitled to be subrogated to the claim of the Manayunk National Bank- as a creditor of the estate.

The facts are certainly unusual and the auditing judge had some doubt whether the testimony disclosed all that existed, but counsel for all parties asserted that no further testimony could be secured. And the auditing judge observes that Estella D. Myers, although competent under the Act of June 11, 1891, P. L. 287, Stew. Purd. 1502, to contradict the testimony of Mr. Preston as to the conversations he had Avith her in February, 1912, was not called as k witness. It would thus appear *81that Myers borrowed $17,000 from tbe Manayunk National Bank and gave tbe money to bis divorced wife in order to fulfill tbe moral obligation wbicb be evidently felt to provide for ber. With this money sbe established a trust for herself and reserved tbe right of revocation. Subsequently, at bis request, sbe, having revoked the trust, paid over tbe money to bis creditor wbicb cancelled tbe loan, and tbe money thus went back to its starting place. Tbe question whether tbe transaction created any indebtedness from Myers to Estella D. Myers is a narrow one, and depends upon tbe intention of tbe parties at tbe time it took place. Tbe facts attending tbe original payment of $17,000 by Myers to tbe claimant did not clearly appear, but tbe auditing judge will assume that tbe condition existed wbicb is most favorable to tbe claimant, to wit, that it was an absolute gift by him to ber without any obligation whatever upon ber part to return tbe money at any time or for any purpose ; and tbe auditing judge will further disregard as probably incompetent tbe statements made by Myers in bis letter to Preston dated February 6, 1912, to tbe effect that tbe payment by him to ber was only intended as a temporary provision if “anything happened” to him. This would be a declaration in bis own favor after the event and therefore not binding upon ber, although apparently tbe contents of tbe letter were communicated to tbe claimant before sbe acted in compliance with bis request to pay back tbe money. However, it is impossible to disregard tbe letter of February 6, 1912, from tbe decedent to tbe claimant, in wbicb be said to ber that be bad “decided to return tbe money that I left in your keeping,” for it was upon this letter that sbe acted in revoking tbe trust sbe bad created and in paying over tbe money to tbe Manayunk National Bank. Furthermore, sbe accepted from the bank a receipt stating explicitly that tbe money was to be used “for payment of tbe loan of tbe same amount of Charles E. Myers.” It cannot be urged that tbe claimant acted *82hastily or without a proper understanding of the transaction. True, she did not consult counsel, but she was in doubt and acted after two conferences with Mr. Preston, who, although not a lawyer, was a mature and experienced business man, president of the bank, who put the matter squarely up to her own decision and apparently did not influence her. Indeed, as the bank was amply secured he had no object to urge her to make the payment. This was the time for her either to have refused to make the payment altogether or to have made it conditionally or to have secured herself by an assignment of the note with or without collateral security, or in some other way; but she did not do so and while she may possibly or probably have made the payment in the hope or expectation that Mr. Myers would make further provision for her in the future, a debt cannot be created in this way, for it requires the meeting of the minds of the parties at the time of the transaction, and therefore a gift cannot be afterwards changed by the donor into a contract or revoked. Thornton on Gifts and Advancements, 101, 105; Wandel’s Est., 16 Philadelphia 230,. The case is similar- in some respects to Fassett’s App., 167 Pa. 448, where the facts were more favorable to the claimant than they are in the present case.

The doctrine of subrogation invoked by the learned counsel for the claimant has no application for the reason that the claimant was under no liability for the debt. If she had been so, as for example if she had been an endorser on the note and had paid it, she would be entitled to it against the maker or his estate. The claim of Estella D. Myers is dismissed.

Anderson, J., filed the following opinion of the court in banc on exceptions to the adjudication: The evidence shows that moneys raised by a loan created on securities owned by the decedent had been handed by him to the claimant, his former wife, evidently as a donatio causa mortis, he being at that time about to go South for the benefit of his health, she handed the money back so that *83this loan might be repáid. Under these circumstances we think the learned trial auditing judge was clearly right in holding that the payment by her was not a loan to the decedent, but rather the giving back of that which had been given to her voluntarily.

February 8, 1915:

The exceptions are therefore dismissed, and the adjudication confirmed for the reason given by the learned auditing judge.

Errors assigned were in dismissing the exceptions.

Howard M. Cantrell, for appellant.

Frank P. Prichard, with him Francis 8. Cantrell, Jr., for appellee.