Upon reconsideration I find myself unable to agree. That the result is deplorable, all must concede. The record discloses that from the time of the collection of this money in 1938 by Mrs. Hunter (the proceeds of a policy of insurance on the life of her deceased husband), Mrs. Hunter has endeavored to make suitable arrangements to the end that Mrs. Young, her niece whom she had raised and of whom her husband was very fond, should become the owner of this fund.
Different characters of deposits were made in the bank looking to this end. But this certificate now in question was issued in its present form on the advice of Mr. Cottingham, president of the State National Bank at Decatur. Mrs. Hunter sought his advice in regard to arranging for Mrs. Young to acquire this money at her death, in the meantime the interest on the certificate to go to Mrs. Hunter. Mr. Cottingham, advising her how this could be done, told her "to have the certificate of deposit made payable to Mrs. Hunter or Mrs. Young or the survivor."
As I understand the record, this certificate was prepared by Mr. Clark, cashier of the bank, in the form advised by Mr. Cottingham, and as set out in the majority opinion. This certificate discloses that the $7,500 was deposited by Mrs. Hunter, but was made payable to "Mrs. Cora E. Hunter or Mrs. Annie Lou Young or survivor 12 months after date." It expressly discloses that it was not subject to check, and required the return of the certificate properly endorsed. It bears interest at the rate of 2% per annum, the interest to cease at maturity. It is signed by Mr. Clark, manager. It is clear enough, therefore, that *Page 538 Mrs. Hunter, Mr. Clark, the manager, and Cottingham, the president of the bank, all understood and confidently believed that, should Mrs. Hunter die before Mrs. Young, the certificate would be payable to the latter just as the contract of deposit provided. Mrs. Hunter died before the due date of this certificate; and during this period the money was beyond the control of either Mrs. Hunter or Mrs. Young, as under the express terms of the contract it was not then subject to check. It would seem, therefore, quite clear the result is unfortunate and to be deplored.
I am well aware of the oft-repeated statement that "hardships make shipwreck of the law," and I would be the last to favor the overturning of a well-settled principle merely in order to meet a hard case. But when such hardships do appear, it should suffice to make us pause and carefully consider whether or not in fact any sound principle of law would be disturbed by a contrary ruling.
As I stand alone in this disagreement, it would serve no useful purpose to enter into anything like a discussion of the principle upon which I think Mrs. Young is entitled to this money. That principle is referred to, by way of brevity, as the "contract theory." This contract theory has been treated in numerous cases which will be found cited in 149 A.L.R. 897, 898; 135 A.L.R. 1021 et seq.; 103 A.L.R. 1140 et seq.; 7 Am.Jur. p. 308; 9 C.J.S., Banks and Banking, § 286, p. 595, 596 and note 4. Perhaps the reasoning as found in Re Estate of Staver, 218 Wis. 114, 260 N.W. 655, is more persuasive than that of other courts, but the opinion cites a number of decisions from Massachusetts, Ohio, California, and Michigan, supporting the view that in a deposit as here involved the survivor takes by virtue of the contract of deposit. And some of the courts rest a right of recovery upon the theory of a trust as discussed in the Mississippi case of Ladner v. Ladner,128 Miss. 75, 90 So. 593. Though the discussion of this theory in the Ladner case is very forceful, yet I prefer the contract theory as presenting the stronger view.
I am persuaded the majority opinion gives too little importance to the fact that this deposit contract showed upon its face that the money is payable to Mrs. Hunter or to Mrs. Young, or the survivor. Had Mrs. Young died before Mrs. Hunter, clearly enough Mrs. Hunter could have endorsed the certificate, delivered it to the bank and demanded the money. I am unable to see why the same result would not follow in favor of Mrs. Young upon the death of Mrs. Hunter. That was the contract, a perfectly valid one, entered into by Mrs. Hunter with the bank, and upon advice and cooperation of the president and the cashier. From Mrs. Hunter's standpoint, it was clearly a contract made for the benefit of Mrs. Young. Our authorities are uniform to the effect that one for whose benefit a contract is made may, though not a party thereto, nor furnishing any of the consideration therefor, maintain action thereon against the promisor. A number of our cases to this effect will be found cited in Employers Ins. Co. v. Rhodes, 240 Ala. 226,198 So. 616. And this is in accord with the weight of authority elsewhere, as disclosed by the note found in 81 A.L.R. p. 1279 et seq. See also cases in 131 A.L.R. p. 967 et seq.
The opinion cites First National Bank v. Lawrence, 212 Ala. 45,101 So. 663, as holding to the effect that, to support a claim under the contract theory, there must be a joint ownership, and that in the absence of such vested interest during the life of the depositor, the right of survivorship does not exist. I cannot read that case to this effect. It was a plain case of joint deposit, specifically providing for the payment of the funds to either the husband or the wife under any circumstances, and the holding was that the bank was perfectly justified and protected by the payment of the remainder of the funds to the surviving wife. That case did not involve, and made no pretense of treating in any manner, the theory of a contract made for the benefit of a third person, upon which I think the decision here may well be rested.
As to that feature of the contract which looks to a surrender of the certificate, no difficulty here appears. This certificate was left by Mrs. Hunter in her box, and placed by the cashier in the vault of the bank with the only key to the box left in possession of the cashier. This provided ready access to the certificate, which, according to the contract, the cashier could produce for Mrs. Young that she might properly endorse the same and receive the money. Thus the statute referred to in the majority opinion would be fully met, and, indeed, the contract upon its face so provided, and the bank amply protected.
We find nothing in Meyerson v. New Idea Hosiery Co., 217 Ala. 153, *Page 539
115 So. 94, 55 A.L.R. 1231, cited in the opinion, which at all militates against this conclusion. Indeed, the first headnote in the Meyerson case is to the effect that, where two parties enter into a contract for the direct benefit of a third person, the law operates to create privity necessary to a binding obligation between the promisor and the third party.
Some stress appears to be laid upon the case of Hicks v. Meadows, 193 Ala. 246, 69 So. 432. I cannot see the application of this authority to the instant case. The deposit contract was to my mind entirely different from that here involved, and the certificate had fallen into the hands of a third party, who sought injunctive relief against a detinue suit for its recovery by Judge and Joe Meadows, who, as stated in the opinion, were the contingent payees in the certificate. But even in that case, the opinion states that the proof of the happening of the contingency — that is, the death before the due date of the certificate of W. J. Meadows, who deposited the money and to whom the certificate was payable — authorized them as plaintiffs in detinue to recover the certificate from any other person not showing a legal title to the same. The Court held, therefore, that Hicks, the third party into whose hands the certificate had come, was entitled to injunctive relief in order to prevent Judge and Joe Meadows from recovering the certificate in the detinue suit. Certainly, if Judge and Joe Meadows had such a right or title to the certificate under the contract of deposit there made, this would seem to present a strong argument that Mrs. Young had a far more perfect right under the contract here involved, which stipulated that she was as much a payee as Mrs. Hunter.
The majority opinion indicates that an endorsement of the certificate in the lifetime of Mrs. Hunter was necessary under the statute in order to protect the bank. But it appears to me this overlooks the fact that the bank had entered into a binding contract to pay this money to Mrs. Young in the event of Mrs. Hunter's death, the bank having full control of the certificate for the very purpose of its delivery and endorsement by the survivor, all in accordance with the statute, the contract, and settled principles of law.
I am persuaded, therefore, that Mrs. Young is entitled to this money upon the theory of a valid contract between the bank and Mrs. Hunter made for Mrs. Young's benefit. This is the theory upon which the trial judge acted, and in my opinion his opinion should be here affirmed.
I forego further discussion, but for the reasons indicated, respectfully dissent.