Starbuck v. Farmers' Loan & Trust Co.

O’Brien, J.:

The appellant insists that the writing made by the defendants’ testator was a complete and valid declaration of trust in favor of the plaintiff, his brother, and at once vested in the plaintiff the. equitable title to one-eighth of the ship Tillie E. Starbuck, and to one-eighth of her earnings. The respondents claim that the proofs fail to establish either an explicit declaration of. a trust, or that there was an intention beyond a reasonable doubt to create a trust, or that any. delivery of possession of the corpus of the trust was made.

In Wadd v. Hazelton (137 N. Y. 219) it is said.: “While it is true that no particular form of words is necessary to create a trust of this nature, and while it may be created by parol or in writing, and may be implied from the acts or words of the person creating it, yet it is also true that there must be evidence of such acts done or words used on the part of the creator of the alleged trust- that the intention, to create it arises as a necessary inference therefrom, and is. unequivocal; the implication arising from the evidence must be that the person holds the property as trustee for another. . The acts must be of that character which will admit of no other interpretation than that such legal rights as the settler retains are held by him as trustee for the donee; the settler must either transfer the property to a trustee, or declare that he holds it himself in trust. An intention to give, evidenced by a writing, may be most satisfactorily established, and yet the intended gift may fail because no delivery is proved. And where an intention to give absolutely is-evidenced by a writing which fails because of its non-delivery, the court will not and cannot give effect to an intended absolute gift by-construing it to be a declaration of trust and valid, therefore, without a delivery. * * * Although it may be sometimes a question of intention on the part of .the creator of the alleged trust whether, in fact, he did or did not create it, yet a finding of fact that he did so intend must be based upon some evidence thereof, and there must be some evidence that such an intention was carried out.”

*275The most important thing to determine, therefore, in this class of cases, is the intention of the person .who makes the writing; and as aids in that direction we may consider the conditions surrounding its making, the nature of the gift, and the disposition of the writing when made. The writing here starts out with the statement that it was given in conformity with a verbal understanding, and was made, to use the language of the testator, “ to certify that I agree to carry for your °jc one-eighth interest in the * * * Ship, to be called the Tillie E. Starbuck, now in course of construction * * the said one-eighth to be transferred to you when paid for, either from the earnings of said ship or otherwise.” That it was not a sale, either complete or executory, the counsel agree. It was not unexecuted sale, for the legal title was. not to pass until the plaintiff’s interest was paid for. It was not an executory sale, for that implies- a mutual promise, and there was no obligation on the plaintiff to buy, nor was there any consideration for an agreement to sell. The respondents contend that it was a conditional contract of sale, without any consideration other than the conditions, which were conditions precedent and have never been fulfilled, and that the transaction at best was a mere option on conditions never performed.

To make out a cause of action, therefore, the. plaintiff was bound to establish a valid trust. If the written declaration stood alone, we do not think it would be sufficient for that purpose, as it would be susceptible of the construction, either that it was a mere option or an imperfect gift; and in Govin v. De Miranda (79 Hun, 286) it was held that equity will not perfect a defective gift made without consideration, and that as to gifts inter vivos ' delivery is essential. On a former appeal of the same case (76 Hun, 414) it was held that the mere signing and acknowledgment of a declaration of trust, without placing the evidence therein in the custody of ano'ther, is insufficient to create a trust. That element, however, has been to some extent supplied in this case, as the declaration was produced at the trial from the possession of the beneficiary, and it was in evidence that he claimed a beneficial interest in certain property thereunder and was its proper custodian ; and under such circumstances, delivery from the maker will be presumed. (Ward v. Lewis, 4 Pick. 518 ; Chandler v. Temple, 4 Cush. 285.) In that respect it differs from either of the above decisions in Govin v. De Miranda.

*276From the nature of the-interest claimed, namely, an undivided share in a ship, the corpus, was not susceptible of actual delivery ; but we think that at the time the writing was given, assuming the fact therein stated to be true, viz., that the vessel was then in course of construction, it was sufficiently in being to make it the subject either of a transfer, in whole or in part, equitable or legal, or as to which a valid declaration of. trust could have been made. Although, as stated, we must assume that the writing was delivered because produced by the plaintiff, we should not be inclined, if it stood alone,, to regard it as a valid declaration of trust. But if, in addition to the writing, we take the subsequent declaration of the testator that the plaintiff owned-a one-eighth interest in the vessel, which declaration the plaintiff offered to prove, but which was excluded under objection, then we .think that the principles enunciated in another of the many cases growing out .of the litigations between Govin and De Miranda (140 N. T. 474) would be controlling. In that case, upon the death of the testator, there was found in his safe a sealed envelope indorsed “ a declaration in favor -” of the plaintiffs whose-names were given. In the envelope was a paper signed and acknowledged by P., stating, among other things, that there-was in said safe a parcel containing $2-5,000 in bonds of a. certain railroad company, of which $10,000 belonged to a person named, arid the balance to the plaintiffs. The paper closed with this statement: “No person shall have the right to oppose this declaration, because it is founded on conscience and justice. I reserve this only for what I may consider proper.” It was-therein held that it was to be inferred from the language of.' the paper, in the absence of any evidence explaining or contradicting it, 'that the plaintiffs were the owners of the bonds-claimed"; that the declaration to that effect was not qualified by the-closing clause, but that it simply meant that the said bonds were-in the possession of P.,. under some agency or possibly a trust, behaving authority to convey them and apply the proceeds consistently with the plaintiffs’ ownership. The fact that in that case the declaration of' ownership was in writing, while here it was by parol, would make no difference, because the property here in question being personal property, the declaration would be equally effective whether resting in writing or in parol.

*277No point was made, below that the plaintiff offered to prove the declaration, instead of calling the witness, the defendants’ objection being not to the form of the offer, but upon the ground that the evidence'was immaterial and irrelevant. We must assume, therefore, that if objection had been taken to making the offer instead of to examining the witness for the purpose of proving the declaration, this could have been obviated. The respondents, therefore, are not in a position to take advantage of that point upon appeal. Assuming the testimony offered as having been given, a summary of the evidence would tend to prove that the testator had a verbal understanding with his brother, the plaintiff, by which he had agreed to carry for him a one-eighth interest in a vessel to be built, which was designated, and that thereafter he put in writing this verbal understanding while the vessel was in course of construction; and that when it was completed and after it had presumably been earning, he declared that the plaintiff owned a one-eighth interest in that vessel. This, in the absence of evidence to the contrary, would have justified the court in according to him the relief winch he asked, namely, an accounting for his interest in the vessel, to the end that it might be determined whether the earnings of the vessel had realized sufficient to entitle the plaintiff to his one-eighth interest which he could then recover in addition to any excess of earnings.

We think, therefore, that the judgment should be reversed and a new trial ordered with costs to the appellant to abide the event.

Van Brunt, P. J., Patterson and McLaughlin, JJ., concurred; Ingraham, J., dissented.