GROSSMAN v. GREENSTEIN

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Docket Number

[No. 10, April Term, 1931.]

Attorney(S)

Joseph Loeffler, with whom were David Friedman and Joseph Leiter on the brief, for the appellant. Israel S. Gomborov, for the appellee.

Judges

BOND, C.J., delivered the opinion of the Court.

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Smart Summary

Factual and Procedural Background

This case arises from a bill filed by Garrison S. Greenstein against Harry Grossman seeking the return or reassignment of a $1,000 bank deposit. The deposit was made by Greenstein in the joint names of his daughter, Sara Greenstein, and Grossman, who was engaged to marry her. The deposit was subject to their joint order, with the balance at the death of either to belong to the survivor. Subsequently, Grossman broke the engagement and refused to proceed with the marriage, despite the daughter consenting to cancellation of the deposit and return of the money. Grossman also refused to consent to the return of the funds, although he was aware that the deposit was made solely in contemplation of the marriage. The Circuit Court of Baltimore City overruled Grossman’s demurrer to the bill, and Grossman appealed that ruling to the Court of Appeals of Maryland.

Legal Issues Presented

Whether the gift represented by the bank deposit was absolute or conditioned upon the marriage of Grossman and Sara Greenstein.
Whether the bill states sufficient facts to support equitable jurisdiction to compel the return or reassignment of the deposit.
Whether the demurrer to the bill should be overruled based on the alleged conditional nature of the gift.

Arguments of the Parties

Appellant's Arguments

The appellant argued that gifts in this form are effective and that there was no express reservation of a power of revocation, implying the gift should be considered absolute and not subject to return.

Appellee's Arguments

The appellee contended that the gift was made conditionally and in contemplation of the marriage, and since the marriage did not occur due to the appellant's breach, the gift failed and should be returned.
The appellee also argued that equity has jurisdiction to compel the reassignment or return of the deposit since the funds remain in the bank and have not been withdrawn by the beneficiaries.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Jeffrey v. Luck, 155 L.T. 139	Interpretation of gifts conditional upon marriage	Supported the view that gifts can be limited by condition of marriage, as averred in the bill.
Seiler v. Funk, 32 Ontario L.R. 99	Conditional nature of gifts related to marriage contracts	Reinforced the principle that intention and circumstances determine if a gift is conditional.
Banning, Marriage Settlements, 233	General treatise on marriage-related gifts and settlements	Used to support the conditional gift doctrine.
Vaizey, Settlements, 87	Principles on gifts and settlements tied to marriage	Provided doctrinal support for conditional gifts based on marriage contingencies.
Mitford v. Reynolds, 16 Sim. 130, 156	Case law on conditional gifts	Referenced as precedent for gifts failing when the condition (marriage) fails.
Thomas v. Brennan, 15 L.J. Ch. 420	Equitable treatment of gifts conditioned on marriage	Supported the court’s interpretation of conditional gifts.
Bond v. Walford, 32 Ch. D. 238	Conditional gifts in marriage contexts	Used to illustrate the principle of conditionality based on marriage.
Jacobs v. Davis (1917), 2 K.B. 532	Conditional gifts and their revocation upon failure of condition	Affirmed the court’s approach to conditional gifts.
Robinson v. Cumming, 2 Atk. 499	Principles of conditional gifts	Supported the conditional nature of the gift here.
Essery v. Cowland, 26 Ch. D. 191	Equity’s jurisdiction over conditional gifts	Supported the court’s equitable jurisdiction to grant relief.
Williamson v. Johnson, 62 Vt. 378, 20 A. 279	Conditional gifts dependent on marriage	Reinforced the principle that gifts may be conditional on marriage.
Burke v. Nutter, 79 W. Va. 743, 91 S.E. 812	Conditional gift doctrine	Supported the court’s interpretation of the gift’s conditional nature.
Humble v. Gay, 168 Cal. 516, 143 P. 778	Equity and conditional gifts	Used to justify equitable relief for return of conditional gifts.
Foschia v. Foschia, 158 Md. 69, 148 A. 121	Equity’s jurisdiction in cases involving deposits	Supported the court’s jurisdiction to order reassignment of deposit funds.
Sturgis v. Citizens' Nat. Bank, 152 Md. 654, 137 A. 378	Equitable remedies involving bank deposits	Confirmed equity’s authority to grant relief involving bank account deposits.

Court's Reasoning and Analysis

The Court analyzed whether the $1,000 deposit was an absolute gift or conditioned upon the marriage between Grossman and Sara Greenstein. The Court emphasized that a donor may limit a gift to a particular purpose and make it dependent upon an expected state of facts, such as a marriage, so that if the condition fails, the gift fails. The intention behind the gift is determinative and can be found either by explicit declaration or inferred from circumstances. Here, the bill explicitly averred that the gift was made in contemplation of the marriage and solely because of the promise to marry. Additionally, the deposit was made to the joint order of the daughter and Grossman, which the Court found inconsistent with an absolute gift to two unmarried persons. The Court held the averments sufficient to establish a conditional gift dependent on the marriage taking place.

The Court also addressed whether equity had jurisdiction to grant relief, concluding that since the money remained in the bank and had not been withdrawn by the beneficiaries, equity could properly order a reassignment or return of the deposit. The bank was not made a party, but the relief sought did not infringe upon any rights the bank might have. Thus, the Court found equitable relief appropriate on the facts as alleged.

The demurrer was properly overruled because the bill sufficiently stated a cause of action based on the conditional nature of the gift and the failure of the marriage condition.

Holding and Implications

The Court affirmed the order overruling the demurrer to the bill of complaint.

The direct effect of this decision is to allow the complainant to proceed in equity to compel the return or reassignment of the deposit conditioned on the marriage that did not occur. No new precedent was established beyond confirming that a gift made in contemplation of marriage may be conditional and subject to return if the marriage fails. The ruling reinforces the principle that the donor’s intention, as expressed or implied, governs the nature of such gifts.

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HARRY GROSSMAN v. GARRISON S. GREENSTEIN.

Gift — Conditioned on Marriage — Bill for Cancellation.

A donor may limit his gift to a particular purpose, and render it so conditioned and dependent upon an expected state of facts that, failing that state of facts, the gift will fail. p. 73

Whether a gift to a party to a contract of marriage is absolute, or is conditional upon the marriage taking place, is an ordinary question of intention, to be determined by any express declaration in the making of the gift, or from the circumstances. p. 73

A bill alleging that, because of defendant's promise to marry his daughter, plaintiff deposited a sum in bank to the joint account of defendant and the daughter, subject to their joint order, the balance to belong to the survivor, and that defendant subsequently broke the engagement, but refused to consent to the cancellation of the deposit and return of the money, though he knew that the moving cause of the deposit, and only one, was the contemplated marriage, sufficiently averred a purpose to limit the gift, and to make it conditional and dependent upon the completion of the marriage. pp. 73, 74

Equity has jurisdiction of a bill to compel a return or reassignment by defendant of a deposit in bank made by plaintiff to the credit of defendant and plaintiff's daughter, which was conditioned upon the marriage of the two latter, defendant having refused to proceed with the marriage. p. 74

Decided June 9th, 1931.

BOND, C.J., delivered the opinion of the Court.

The appeal is from the overruling of a demurrer to a bill of complaint seeking to compel return or reassignment of an alleged deposit of money made subject to the joint order of the complainant's daughter and a young man to whom she was engaged to be married. The young man, it is averred, had broken the engagement and declined to proceed with the marriage. The bill avers that, "because of said promise by the said defendant, Harry Grossman, to marry Sara Greenstein, daughter of your orator, and in contemplation of said marriage," the complainant's father withdrew $1,000 which he had held in a savings account of his own, and deposited it in the Baltimore Trust Company, to the account of "Sara Greenstein in trust for herself and Harry Grossman, joint owners, subject to their joint order, balance at death of either to belong to the survivor." And it is averred that subsequently Grossman broke the engagement, announced that he did not intend to marry Sara Greenstein, and ceased to keep company with her. The daughter consented to the cancellation of the deposit and return of the money, but Grossman refused, although, as the bill avers, he was well aware that the moving cause, and only moving cause, of the deposit was the contemplated marriage. This court concurs in holding that the averments are sufficient to support the prayers, and that the demurrer must be overruled.

For support of the demurrer, dependence has been placed in argument upon the facts that gifts in this form are effective, and that there is in this instance no express reservation of a power of revocation. But, granting those facts, the gift may yet fail because it has expressly or by implication been made upon a condition, or limited to a purpose, which has failed. A donor may limit a gift to a particular purpose, and render it so conditioned and dependent upon an expected state of facts that, failing that state of facts, the gift should fail with it. A familiar illustration is a gift mortis causa. On the other hand, the donor may, in any situation, make an absolute gift, not dependent upon the fulfillment of expectations. Even to a party to a contract of marriage, in whom the donor is interested only because of the expectation of marriage, the donor may, if he wishes, make an absolute gift which would be unaffected by a failure to marry. Whether in a given instance his gift is of one kind or the other, conditional and dependent or absolute, is an ordinary question of intention, to be determined by any express declaration in the making of the gift, or from the circumstances. In this case there are explicit averments of a purpose and intention to make the gift only by reason of the marriage, and in contemplation of it. And in our opinion these constitute sufficient averments of a purpose to limit the gift and make it conditional and dependent upon the completion of the marriage. This is the construction put upon similar averments in cases elsewhere in which the question has arisen. Jeffrey v. Luck, 155 L.T. 139; Seiler v. Funk, 32 Ontario L.R. 99; Banning, Marriage Settlements, 233; Vaizey, Settlements, 87; Mitford v. Reynolds, 16 Sim. 130, 156; Thomas v. Brennan, 15 L.J. Ch. 420; Bond v. Walford, 32 Ch. D. 238; Thornton, Gifts and Advancements, sec. 98; Jacobs v. Davis (1917), 2 K.B. 532; Robinson v. Cumming, 2 Atk. 499; Essery v. Cowland, 26 Ch. D. 191; Williamson v. Johnson, 62 Vt. 378, 20 A. 279; Burke v. Nutter, 79 W. Va. 743, 91 S.E. 812; Humble v. Gay, 168 Cal. 516, 520, 143 P. 778. And see Blatz v. Lester, 54 Mo. App. 283; McDonnell v. Heselrige, 16 Beav. 346; Cohen v. Seller (1926), 1 K.B. 536; 70 Sol. J. 517. And the construction is fortified in this instance by the further allegation in the bill that the gift was made by its terms for the benefit of the daughter and the young man jointly, and subject to their joint order while both should live. Such an arrangement would ordinarily be so little consistent with a gift to a daughter and a man not joined in matrimony that it would of itself seem to afford some indication that the gift was contemplated as dependent and conditioned upon their marriage.

A question of the propriety of resorting to a court of equity for a remedy to the donor has been raised. But, according to the theory of the bill, the money is still in the hands of the depository, not withdrawn by the beneficiaries named, and active reversal of the transfer made on the bank's books is the relief required, and for that relief equity would be the proper jurisdiction. Foschia v. Foschia, 158 Md. 69, 148 A. 121; Sturgis v. Citizens' Nat. Bank, 152 Md. 654, 137 A. 378. In this case the bank has not been made a party, but the relief prayed could be granted without infringing upon rights, if any, which may have accrued to the bank. The bill prays only a reassignment of the fund on deposit, and this, we think, should be granted upon establishment of the truth of the averments.

Order affirmed, with costs to the appellee.