Delaware Trust Company v. Everitt

140 A.2d 778
CourtCourt of Chancery of Delaware
DecidedMay 2, 1958
StatusPublished

This text of 140 A.2d 778 (Delaware Trust Company v. Everitt) is published on Counsel Stack Legal Research, covering Court of Chancery of Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Delaware Trust Company v. Everitt, 140 A.2d 778 (Del. Ct. App. 1958).

Opinion

140 A.2d 778 (1958)

DELAWARE TRUST COMPANY, a corporation of the State of Delaware, Executor under the Will of Deborah Morrison Rood, deceased, Plaintiff,
v.
Deborah Rood EVERITT and Robert Howe Everitt, sometimes known as Robert Everitt Howe, Defendants.

Court of Chancery of Delaware, New Castle.

April 3, 1958.
On Application for Costs and Attorneys' Fees May 2, 1958.

*780 David F. Anderson (of Berl, Potter & Anderson), Wilmington, for plaintiff.

Henry M. Canby and Max S. Bell, Jr. (of Richards, Layton & Finger), Wilmington, for defendant Deborah Rood Everitt.

Arthur G. Logan and Vincent A. Theisen (of Logan, Marvel, Boggs & Theisen), Wilmington, for defendant Robert Howe Everitt.

SEITZ, Chancellor.

This is an interpleader action instituted by the Delaware Trust Company, executor under the will of Deborah Morrison Rood. The real claimants are the defendant, Deborah Rood Everitt ("Deborah"), the daughter of the testatrix and Robert Howe Everitt ("Robert"), Deborah's former husband. Deborah claims as assignee from Robert certain stock which formed part of a legacy left him by his former mother-in-law. Robert denies that the assignment was absolute. This is the decision after final hearing.

Deborah and Robert were married in 1943, at which time Robert was working in Mexico City. Some time after this marriage Robert acquired an automobile finance company and an automobile parts business in Mexico City. It became necessary for Robert, in the operation of the finance company, to maintain certain gold reserves. Through an arrangement with the Banking Commissioner, the gold reserve requirement was waived with the understanding that when the company was examined, evidence of a deposit in an amount sufficient to satisfy the requirement would be produced.

On January 9, 1952, anticipating a government inspection of the finance company, Robert telephoned his wife, told her of his position, and requested that she make the necessary money available for the reserve. She immediately telephoned the Delaware Trust Company in Wilmington, arranged to have 400 shares of Hercules Powder Company stock, belonging to her and on deposit at the Bank, used as collateral for a loan of $13,500 from the Bank to her. This sum was deposited to the account of Robert the same day. Deborah later executed a demand note in favor of the Bank. At the time the loan was made by Deborah to Robert, apparently it was understood that the money would only be needed for a short time, but time went by without repayment.

*781 Deborah Morrison Rood died testate on March 20, 1953, survived, inter alia, by her daughter, Deborah, who was married to Robert. Delaware Trust Company was named as executor. Item Fifth of said will created the legacy in Robert's favor. It is a portion of the subject matter (being Hercules Powder common stock) of this legacy which is here in dispute. It provides:

"Fifth: I give and bequeath three per cent (3%) of my estate remaining after the provisions of Items First, Second, Third, and Fourth hereof, unto my son-in-law, Robert Howe Everitt, if he is living at the time of my death and if he does not die within a period of thirty (30) days from and after my death, and I authorize my Executor to assign, transfer, and pay over said bequest, absolutely and in fee simple, unto my said son-in-law in cash or in securities or partly in cash and partly in securities to be selected by my said son-in-law."

During the 1952-53 period Deborah appears to have been acquiring an ever increasing interest in the affairs of a Mexican horse-racing track, known as the Hipodrome de las Americas. Her efforts in this regard culminated in an agreement in July, 1953, whereby she obtained practical working control in return for the overall sum of $500,000 (70% in cash, 20% by her father's note and 10% from earnings).

The loan which Deborah had made to Robert remained unpaid, at least, until May 10, 1953. By this time Mrs. Rood had died. Robert, having found that he did not need the $13,500 for purposes of the inspection, had applied it to increase the stock of his automotive parts business. At this time (May 10, 1953), Deborah was preparing to leave for Wilmington for conferences with Delaware Trust Company officials; she being an Advisor under her mother's will.

Immediately prior to her departure for Wilmington and for reasons hereinafter discussed, Deborah requested Robert to repay the loan. Robert prepared, signed and delivered to her two letters, both dated May 10, 1953. One of them, which for identification purposes I shall refer to as the "assignment" letter, is the document upon which Deborah seeks to prevail in her claim of an absolute assignment of so much of Robert's interest in the estate as was necessary to repay the loan. It reads:

May 10, 1953

"Dear Mr. Lovett:

"Please consider this letter your authorization by me to assign to my wife, Deborah Rood Everitt, sufficient of the stock inherited by the undersigned from the estate of Deborah Morrison Rood to cover a loan for $13,500.00 (Thirteen Thousand Five Hundred Dollars).

"Many thanks to you for your attention to this request."

The second letter of the same date, hereafter called the "pledge" letter, is the one which Robert contends reflects the true intent of the parties when read with the so-called assignment letter. It is as follows:

"May 10, 1953

"This will authorize you to use sufficient of the stock inherited by the undersigned from the estate of Deborah Morrison Rood, for loan purposes to cover a loan in the amount of $13,500.00 (Thirteen Thousand Five Hundred Dollars).

"Deborah Rood Everitt is authorized by me to handle such a loan with your bank."

Deborah maintains that Robert agreed to repay by making an absolute assignment of so much of his legacy as was necessary to cover the loan and that his action is evidenced by the assignment letter. Robert contends that the letters were to authorize the Bank's use of his legacy to serve as collateral for a loan of $13,500 to Deborah.

Just when the assignment letter was actually delivered to the Bank is a matter of dispute. Deborah contends that the assignment *782 letter was left with Mr. Lovett of the Bank in May 1953. He had no recollection concerning the matter. The letter bears the Bank's stamp of January 1954. As hereinafter noted, I am not persuaded that the assignment letter was left with the Bank when Deborah visited it in May 1953.

On January 17 and January 18, 1954, Deborah and Robert executed what may be called separation agreements by which, inter alia, they released each other from any financial claim against the other. The second of these agreements called the "Arce" agreement was a part of their property settlement. It was made a part of their Mexican divorce decree entered in 1954. Deborah tacitly concedes that these settlement agreements wiped out Robert's loan obligation to her if it had not theretofore been paid by virtue of an absolute assignment of a portion of his legacy to her.

The parties made conflicting claims on the executor with respect to the ownership of the legacy stock. This interpleader action resulted.

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Bluebook (online)
140 A.2d 778, Counsel Stack Legal Research, https://law.counselstack.com/opinion/delaware-trust-company-v-everitt-delch-1958.