We challenge, as unwarranted, extravagant and untrue in law or fact, the statement in appellees' application for rehearing that, "The court in its opinion in this case has stricken down a valid contract in the form of a certificate of deposit and has in effect declared it invalid," and assert to the contrary, that the opinion upholds the integrity of said certificate of deposit, and declares its true legal effect.
On the other hand, we assert that the appellees in said application for rehearing ignore the statute, Code 1940, Tit. 5, § 122, which, for the protection of the parties, whether dead or alive, gives to such certificate of deposit the character of a courier without luggage, representing the title and right which it evidences, protecting the depository and the depositor against doubtful and uncertain claims founded on dubious facts resting in parol. Such contract is within the rule that its obligations cannot be altered or varied by parol testimony. 7 Am.Juris. p. 353, § 493; Renfro Bros. v. Merchants Mechanics' Bank, 83 Ala. 425, 3 So. 776; Montgomery, Supt. of Banks, et al. v. Smith, 226 Ala. 91, 145 So. 822; Patton v. Beecher, 62 Ala. 579, 585.
"A bank is not bound to pay deposits evidenced by a certificate of deposit, except on production and surrender of the certificate properly indorsed, and acts at its peril in doing so, * * *." 9 C.J.S., Banks and Banking, § 316, p. 643, "c — Conditions Precedent"; Hicks v. Meadows, 193 Ala. 246,69 So. 432; LeZotte v. Bank of Del Norte, 86 Colo. 136,278 P. 606; Chandler v. Smith, 147 Ga. 637, 95 S.E. 223; Baxley Banking Co. v. Gaskins, 145 Ga. 508, 89 S.E. 516; Cohn-Goodman Company v. People's Sav. Bank of Grand Haven, 203 Mich. 307,168 N.W. 1042; 7 C.J. p. 650, note 62.
The appellees ignore the stipulation in the contract that it is "Payable to Mrs. Cora E. Hunter or [not and] Mrs. Annie Lou Young or survivor twelve months after date on the return ofthis certificate properly endorsed," which clearly evidences *Page 535 the fact that this certificate represents the right and title to the chose in action, and its delivery to other than the original holder with the intention to vest such title is essential to pass the title, and give the holder a right to present, endorse and collect the debt which it evidences. [Brackets and italics supplied.]
The appellees in the application for rehearing strenuously insist that this court by construction and the consideration of illegal, immaterial and incompetent evidence, engraft on to said contract something that does not appear in the contract itself. It clearly appears from the opinion of the trial judge that the only evidence that was considered, and correctly so, was the certificate of deposit issued on June 23, 1942, and the evidence of Clark as to the custody of said certificate. We quote from the opinion of the Court: "The money deposited in said bank in consideration of which said certificate of deposit was issued was the sole property of Cora E. Hunter, and the defendant Annie Lou Young owned no part of same. Said certificate of deposit was retained by V. O. Clark in his capacity as agent for Cora E. Hunter, and the said V. O. Clark held said certificate of deposit in his capacity as agent for Mrs. Hunter, and not as agent of Mrs. Young. In making said deposit it was the intention of Cora E. Hunter that Annie Lou Young should at the death of Cora E. Hunter become the owner of the indebtedness and of the sum of money evidenced and represented by said certificate of deposit, but it was also the intention of the said Cora E. Hunter to reserve possession and full control and dominion over the certificate of deposit and over the money in consideration of which it was issued during her life time, and it was her intention that Mrs. Young should have no interest or right to the same until the death of Cora E. Hunter. * *."
This interpretation of the writing demonstrates that there was not a perfected gift inter vivos, and that the provisions in the certificate of deposit as to Mrs. Young were testamentary in character, and ineffectual to pass the title at Mrs. Hunter's death, for failure to observe the requisites for executing a last will and testament. Hicks v. Meadows et al.,193 Ala. 246, 69 So. 432, is a case in point. "In cases involving such deposits, questions frequently arise concerning the right of the one other than the original owner to the fund upon the death of the original owner. Apart from the contract theory, which is comparatively rare, this leaves the title of the survivor to rest upon a gift, trust, or bequest. The bequest drops out of consideration, because it is not claimed that the transfer is in the requisite form to constitute a valid bequest, i. e., there is no compliance with the statute of wills. There thus remain two theories, upon one or the other of which the right of the survivor to the fund must be based, i. e., gift or trust. Unless the survivor can show title in one of these ways, his claim must fail." 7 Amer.Juris. p. 301, § 426.
Bowie v. Phenix-Girard Bank et al., 237 Ala. 44, 185 So. 363,364, is cited, and the statement made that the case at bar cannot be differentiated from the holding of this court in that case. It is only necessary to quote from the opinion of Justice Bouldin in the cited case to differentiate it from this case: "Emily Frances Barnett, on July 11, 1936, six weeks before her death, transferred her bank account and deposited her funds * * * in Phenix-Girard Bank on joint savings account of herself,under the name of Emily Frances Grant, her maiden name, andthree of her grandchildren, George William Matthews, JamesHamilton Matthews and Martha Sue Matthews, as their jointproperty, to pass in case of death to the survivor, and subject to withdrawal on the order of either or the survivor. * * *" [Italics supplied.] These facts clearly show a joint deposit in which all the parties named had a present interest. In the case at bar, the deposit was made by Mrs. Hunter, in her name, with stipulation at maturity to be paid to herself or Mrs. Young, or the survivor. Mrs. Young had no present interest in this deposit, but a mere contingency, as in Hicks v. Meadows, supra.
The fault in appellees' argument is that it deals with the deposit in the instant case as a joint deposit by Hunter and Young, when, as we have pointed out repeatedly, this is not a joint deposit, and cases dealing with such deposits are not apt authority here, nor are the cases dealing with special deposits, where the thing deposited is to be kept intact to be returned to the depositor.
The bank, in the instant case, had no interest whatever in the certificate of deposit. It was the property of Mrs. Hunter and evidenced the obligation of the bank to pay. Neither did Clark, the cashier of the bank, have any interest in said certificate. He was the mere custodian of *Page 536 Mrs. Hunter. Hence, Smith v. Eshelman et al., 235 Ala. 588,180 So. 313, is not in point. There the promissory note was delivered to the doctor, who performed the operation on the decedent, by the decedent, before his death, with express authority to the doctor to collect the note and pay himself, and to pay over to certain named persons the remainder. It was held that the agency was coupled with an interest, in effect a parol trust, and was not terminated by the death of the principal.
We have examined the other cases cited by appellee and do not find them applicable or helpful here. In re Edwards' Estate,140 Or. 431, 14 P.2d 274, was a joint account or joint deposit, which was regulated by statute. In Farmers Merchants Nat. Bank v. Lee, Okl.Sup., 132 P.2d 931, the proceeding was to enforce an agreement by a mother to assume payment of her son's debt to a bank, in consideration of the bank's promise to forego foreclosure of a chattel mortgage securing the son's note, and retain the mortgaged property, and pay the note out of her estate at her death. The court held that such agreement was not void for uncertainty, as to the time of payment, nor was it a transaction testamentary in character and rendered unenforceable because payment was postponed until after her death.
In Ladner et al. v. Ladner et al., 128 Miss. 75, 90 So. 593, which appellees insist cannot be differentiated from the case at bar, Alfred Ladner consulted the vice president and cashier of the bank, who testified that Ladner stated to him: " 'That he wanted to place this money in the name of five of his children, but that he was to draw the interest while he lived; that he needed that to help him live. So I told him I could fix him up, and he took these certificates and gave me the names of the boys and girls, and I issued certificates in their names, each for $2,000, payable in six months, and he had them renewed every six months. You see the interest was due at the end of every six months, and if he should die the money was to go to his children. Mr. Ladner told me he had provided for his wife by buying a piece of property at Pas Christian; the house had burned on this property, but he rebuilt it so she could have an income; but the money he put in the bank he wanted his children to have that.' " 128 Miss. 77, 90 So. 594.
By this agreement the court held that a parol trust was created, but the difference between that case and the case at bar is, the children each had a present vested interest, and the bank held the same in trust for Ladner, and his children, interest to go, to Ladner, and the principal to the children at his death.
In Sturgis v. Citizens' Nat. Bank of Pocomoke City et al.,152 Md. 654, 137 A. 378, the deposit was a joint deposit, subject to the check of either of the parties. In Foschia v. Foschia et al., 148 Md. 69, 148 A. 121, the pass book recited that the deposit was in the name of a certain person in trust for self and another, joint owners, subject to the order of either. In Copeland, Ex'r et al. v. Summers et al.,138 Ind. 219, 35 N.E. 514, 37 N.E. 971, the trust created was complete, and nothing was required of the beneficiaries, except to claim the fund.
In the instant case, as we have pointed out, the certificate was the sole property of Hunter up to the moment of her death, and on its face required that it be endorsed and surrendered by the claimant. Possession and the right to endorse were prerequisites to establish a claim to collect the certificate of deposit. The essential elements of a trust were absent. Birmingham Trust Savings Co. v. Marx, 230 Ala. 68,159 So. 483.
Nor is the claim of Young sustainable on the theory that the certificate of deposit constituted a contract made between Hunter and the bank for her benefit. She was not a party or privy to the contract. She had no knowledge of it and she had at most a contingency, depending upon obtaining the possession of the certificate of deposit, and the right to present and surrender the same. Wolosoff v. Gadsden Land Building Corporation, 245 Ala. 628, 18 So. 2d 568, 570; Shine v. Nash Abstract Investment Co., 217 Ala. 498, 117 So. 47.
It is well settled that the right of a third person for whose benefit a promise is made is affected with all the infirmities of the agreement as between the parties thereto and the authorities are uniform that a mere naked promise from one to another for the benefit of a third will not sustain an action. Meyerson v. New Idea Hosiery Co., 217 Ala. 153, 115 So. 94, 97, 55 A.L.R. 1231. Mrs. Young at most had a mere contingency, depending upon the delivery to her of the certificate of deposit by Mrs. Hunter or by her authority during Hunter's lifetime, and this contingency, in the absence of such delivery, was destroyed by Mrs. Hunter's death. *Page 537
Mrs. Hunter departed this life before the passage of the Act of 1943, appearing on page 128 of the General Acts of the Legislature of 1943, Code 1940, Tit. 5, § 128(2), and that act has no application here. Moreover, the act deals with joint deposits and depositors, and not with deposits made by an individual. Said act merely recognizes or establishes joint tenancy, with the right of survivorship, in joint bank deposits. First National Bank of Birmingham v. Lawrence,212 Ala. 45, 101 So. 663.
Our conclusion is that the application for rehearing is without merit and is due to be overruled. It is so ordered.
Application for rehearing overruled.
All the Justices concur, except GARDNER, C. J., who dissents.