Appeal, No. 123, March T., 1952, from decree of Orphans' Court of Allegheny County, 1950, No. 1155, in Estate of Mary Elizabeth Washington Ingels, deceased. Decree affirmed.
John T. Conner, with him Dalzell, Pringle, Bredin and Martin, for appellant.
John E. McCalmont, for appellee.
Before Stern, Stearne, Jones, Bell, Chidsey and Musmanno, JJ.
OPINION BY MR. JUSTICE ALLEN M. STEARNE
The question raised by this appeal is whether decedent by her letter to the beneficiary made irrevocable a tentative trust of a savings bank account of decedent titled "Mrs. William M. Ingels in trust for James M. Peck".
James M. Peck, claiming as beneficiary of an irrevocable trust, filed exceptions to the account of the executor and has appealed from the decree of the Orphans' Court of Allegheny County which dismissed those exceptions. The decree of distribution awarded the fund to the estate of the deceased depositor, on the theory that she had created a tentative trust which was revoked by her withdrawal of the money from the account a week before her death.
The account in question was created by Mrs. Ingels on October 1, 1942, with the proceeds of another "intrust" account which she closed on the same day. This account in turn had been started in 1941 with the amount withdrawn from an account which Mrs. Ingels had theretofore maintained in the name of "Mrs. William M. Ingels in trust for Lawrence C. Washington". She closed the Peck account on February 27, 1950, six days before her death and redeposited the $6,747.35 withdrawn therefrom in a checking account maintained in her own name in another bank. Adam Roscoe, assistant cashier of the savings bank, testified that the same money was involved in all these transactions.
The letter which, according to appellant's argument, converted the tentative trust so established into an irrevocable trust was postmarked November 18, 1942, and reads in part as follows:
"When I heard about officer's Training Camp etc. I began to wonder what little gift I could send you, but my doctor bills & dentist bills have come to away over 300.00 and my dividends are not half, what they were even last year.
"So I went to the Peoples-Pittsburgh bank about six or seven weeks ago where I have had a small saving's account there for ten or twelve years.
"It accumulated nicely for some years because they paid 3% and I had three bonds but they are all gone which were left there & the coupons put in; but now they only pay 1%. Any way, as a graduating gift, I have had that money left in the Peoples-Pittsburgh-Bank 'The Oakland Branch', put in trust for you and your heirs.
"It is only a few thousand dollars, but when I die, it may come in handy, for you or Virginia Lee or children and you can feel that I only wish it were more, but that I love you --"
Decedent addressed the appellant as "Dearest Jim" and signed the letter "Aunt Bess". There was in fact no blood relationship, but appellant was the son of a lifelong friend of decedent and a deep affection had always existed between them. On three occasions subsequent to the establishment of the account, decedent notified appellant that she was making either a birthday or Christmas present by depositing ten dollars in the trust account. Several other small deposits appear on the record of the account, which represent interest payments on bonds owned by decedent. There are also two unexplained withdrawals, each in the amount of $100.00.
Appellant concedes that the trust was revocable at the time of its creation and places principal reliance on the letter notifying him of a graduation gift for imparting an irrevocable character. The learned court below properly stated the rule of law to be: "The intention of the donor, as expressed by his acts and declarations, is the factor which determines the status of the trust."
Early cases in Pennsylvania dealing with savings account trusts recognized that a valid trust could be created by depositing money in the name of the depositor as trustee for another but made no distinction between tentative and irrevocable trusts. Thus in Estate of Hugh Gaffney, Deceased, 146 Pa. 49, 23 A. 163, Chief Justice PAXSON said for the Court at p. 54: "We have, then, the case of a deposit on the books of the bank of a sum of money in the name of Hugh Gaffney, trustee for Polly McKim. This makes out at least a prima-facie case for the appellant. Upon the face of the bank book, the money belonged to Polly McKim, and there is not sufficient upon the record to rebut this presumption. This money should have been awarded to the appellant."
In Merigan v. McGonigle, 205 Pa. 321, 54 A. 994, the Court sustained another such trust, saying through Justice MESTREZAT, at p. 327: "Retention of the pass book by the depositor is not, under the circumstances here, decisive against the validity of the trust: Martin v. Funk (N.Y.), 31 Am. Rep. 446; Atkinson's Petition (R.I.), 27 Am. St. Rep. 745; Smith v. Bank (N.H.), 10 Am. St. Rep. 400; Connecticut River Savings Bank v. Albee, supra. Its possession was necessary, as in other cases of a deposit by a trustee, in order to enable the depositor to perform her duties as trustee of the fund deposited. Without anything disclosing a contrary intention, it will be presumed
that she retained the book as trustee, and not in her individual capacity."
In Rambo v. Pile, 220 Pa. 235, 69 A. 807, a similar fund was awarded to a depositor's estate because the evidence disclosed that he had always regarded and treated it as his own. In the opinion Justice MESTREZAT restated this rule in these words (p. 237): "The intention of Amos Burton in making the deposit must be ascertained and be permitted to determine the ownership of the fund in dispute. If he intended to constitute himself a trustee for Githens, and as such held the fund for her, the plaintiff, as her legal representative, would be entitled to have the fund awarded to him; if, on the other hand, Burton made the deposits in his name as a trustee for his own convenience or advantage intending to retain title to and the power of disposing of them, and carried out the intention and disposed of them as his own funds until his death, then the plaintiff can have no claim upon them, and the learned referee was right in awarding the fund in court to the defendants."
In Scanlon's Estate, 313 Pa. 424, 169 A. 106, we quoted with approval the case Matter of Totten, 179 N.Y. 112, 71 N.E. 748. This Court adopted for the first time the theory of tentative trust. We thus varied our earlier rule to the extent of saying that a deposit in a savings account in trust would make out a prima facie case of a revocable trust only. Mr. Justice (later Chief Justice) SCHAFFER said for the Court at p. 428: "... there is no evidence of an intention to create an irrevocable trust at the time of deposit. Neither is there evidence here of any further acts by Mrs. Scanlon which show an intention to make the trust ...