
    PARKINSON v. WOOD.
    1. Equity — Adequacy of Remedy at Law — Fraud—Release of Dower.
    Fraud perpetrated upon plaintiff by her late husband in procuring her release of dower rights in sale of farm would not afford a basis for recovery of proceeds of the sale in equity suit against her stepdaughter since she would have an adequate remedy at law.
    2. Gifts — United States Savings Bonds — Delivery.
    By reason of the Federal law governing the issuance and payment of United States savings bonds, gifts of such bonds may be valid under circumstances as to actual delivery that would ^ not effectuate a gift of ordinary choses in action (31 USCA, § 757e).
    3. United States — Savings Bonds — Treasury Regulations.
    Treasury regulations in respeet to the transfer of United States savings bonds are a proper exercise of the power given to the secretary of the treasury by the congress; and they accordingly have the force and effect of Federal law (31 USCA, § 757e).
    4. Same — Borrowing Money — Controlling Law.
    Under the provisions of the Federal Constitution congress has the power “to borrow money on the credit of the United States,” and “to make all laws which shall be necessary and proper for carrying into execution” this power, such laws being the supreme law of the land and binding upon the judges in every State (U. S. Const, art. 1, § 8, clause 2; art. 6, clause 2).
    5. Same — Savings Bonds — States—Property.
    Since the capacity of the Federal government to borrow money depends on the inviolability of its obligation, on its ability to carry it out strictly in accordance with its terms, a State may not treat United States savings bonds, or the proceeds of their sale, as the property of some person other than the one whom the contract has designated (31 USCA, § 757c).
    
      6. Same — Savings Bonds — State Law.
    Because of the supremacy of the Federal law as to United States savings bonds, and the necessity for uniform enforcement throughout the United States, a State rule has no application to the contract (31 USCA, § 757c).
    7. Same — Savings Bonds — Third-Party Beneficiary Contracts.
    United States government bonds purchased and made payable in the event of death to named beneficiaries are valid contracts for the benefit of third parties (31 USCA, § 757e).*
    8. Gifts — Inter''Vivos—Savings Bonds.
    A gift inter vivos may be perfected although no delivery is actually made where such gift is created by virtue of the terms of a savings bond of the United States government (31 USCA, § 757e).
    9. United States — Savings Bonds — Death of Purchaser — Title of Beneficiary.
    United States savings bonds, issued to purchaser and payable oh death to named beneficiary and found in purchaser’s safety deposit box after his death, became the absolute property of the beneficiary named immediately upon the purchaser’s death whore he was survived by the benefieiary (31 USCA, § 757e).
    10. Gifts — United States Savings Bonds — Possession—Intent.
    A gift of United States savings bonds to the named payee was completed at the time the donor furnished the consideration and directed the issuing officer to provide for the registration of • donee, defendant daughter, as owner of the bonds, even though the donor retained physical possession of the bonds by keeping them in safety deposit box to which both he and defendant had access, where it is clear he intended to make the proceeds of the bonds available to the named payee (31 USCA, § 757e).
    11. Appeal and Error — Questions Reviewable — Statutes—United States Savings Bonds.
    Whether or not State statute relative to rights of payees of United States savings bonds was applicable to decision of controversy between administratrix of estate of deceased purchaser and his daughter, the payee named in such bonds, is not determined where Federal law is found controlling, although the State statute would operate retroactively, if applied (31 USCA, § 757e; Act No. 178, Pub. Aets 1915).
    12. Same — Questions Reviewable — Constructive Trust.
    Constructive trust as to United States savings bonds found in deceased’s safety deposit box is not raised against defendant daughter in favor of plaintiff widow, suing individually and as administratrix, where latter did not allege a eonstruetive trust or pray for such relief and ease was not presented to trial court on such theory.
    13. Same — Equity—Adequacy oe Remedy at Law — Res Judicata.
    Where denial of equitable relief is based in part upon adequacy of remedy at law, decision herein is not to be considered res judicata in subsequent proceedings on law side of court which plaintiff might bring.
    Appeal from Branch; Jacobs (Theo T.), J.
    Submitted January 9, 1948.
    (Docket No. 44, Calendar No. 43,780.)
    Decided February 16, 1948.
    Bill by Clara Parkinson, individually and as administratrix of the estate of George Parkinson, deceased, against Frances M. Wood to decree that certain United States Series E bonds belong to the estate of the decedent. Cross bill by defendant against plaintiff to have determination that bonds belong to cross-plaintiff and to require delivery of them. Decree for defendant. Plaintiff appeals.
    Affirmed.
    
      James M. Cleary (Arthur G. Lyon, of counsel), for plaintiff.
    
      Harold J. Ashdown, for defendant.
   North, J.

This suit in chancery was brought by plaintiff, Clara Parkinson, both in her individual right and as administratrix of the estate of her husband, George Parkinson, deceased. Briefly stated, the only relief sought by plaintiff as to which the record contains any semblance of merit, is that certain United States savings bonds purchased by the deceased but payable to defendant, his daughter by a former marriage, or that the proceeds of the bonds, be decreed to be part of the assets of tbe George Parkinson "estate. Plaintiff’s claim to relief as stated in tbe prayer of ber amended bill is: “That tbe use of the funds amounting to $3,487.50 for the purchase of tbe bonds in tbe name of Frances M. Wood, was a fraud against tbe rights of Clara Parkinson.”

By her cross bill defendant sought delivery to her of the bonds by plaintiff on tbe theory that defendant was tbe owner of these bonds. Defendant and cross-plaintiff bad decree in tbe circuit court. Plaintiff has appealed.

The factuál background of tbe alleged fraud upon which plaintiff relies is as. follows. In May, 1943, George Parkinson sold a farm for $7,706.30. He agreed with plaintiff that if she would join in tbe conveyance (thus releasing ber right of dower) tbe proceeds from tbe sale would be deposited in their names in a joint bank account. The down payment of $2,395 was so deposited June 12, 1943 by plaintiff, and about a month thereafter Mr. Parkinson signed tbe card held by tb,e bank incident to tbe joint account. Tbe balance of tbe purchase price, $5,311.30 was paid to tbe bank cashier for Mr. Parkinson. It was never deposited in tbe joint account. Instead, at various times between July 27 and August 14, 1943, Mr. Parkinson purchased United States savings bonds in tbe amount of $4,650 for which be paid $3,487.50, evidently out of tbe money be bad received for tbe purchase of bis farm. Each of tbe bonds so purchased was made payable to defendant, Frances M., Wood. Tbe bonds were placed in a safety deposit box rented in 1927 by Mr. Parkinson and to which be and defendant each bad a key. No one except defendant and ber father bad access to tbe box; but defendant did not open tbe box during tbe time tbe bonds were deposited therein. After the death of Mr. Parkinson these bonds were found in the safety deposit box.

Plaintiff claims that Mr. Parkinson perpetrated a fraud on her by securing her signature to the farm deed whereby she released her right of dower under their agreement that the purchase money received should be deposited in a joint bank account in their names, when, in fact, Mr. Parkinson did not so deposit the final payment, but used $3,487.50 thereof to purchase the bonds payable to the defendant. Plaintiff further claims that since defendant gave no consideration for the bonds and the deceased did not surrender possession or control of the bonds,” they should be decreed to be plaintiff’s property or assets of Mr. Parkinson’s estate, which will be shared equally by plaintiff and defendant, he having died intestate March 12, 1944. In connection with the above it is plaintiff’s claim that because of lack of delivery of the bonds a valid gift inter vivos was not consummated.

It is not claimed that the estate of Mr. Parkinson would be insolvent if the bonds in suit are not found to be included in the assets. Insofar as plaintiff asserts right of recovery on the ground of fraud perpetrated upon her by Mr. Parkinson, her claim for resultant damages would not give the equity court jurisdiction. As to that phase of her claim, plaintiff would have an adequate remedy at law, and recoyery could not be had in this suit in equity. The trial court so held. See Morten v. Zevalkink, 304 Mich. 572.

Our review de novo of this record brings the conclusion that decision can be and should be based on the sole question as to whether, under the circumstances of this case, title of these United States savings bonds passed to defendant. As appears from numerous judicial decisions, gifts of United States savings bonds are held to be valid under circumstances as to actual delivery which, if the gifts had been of ordinary choses in action, would not be sustained. This has come about in consequence of the provisions of the Federal law governing the issuance and payment of United States savings bonds.

While the question of validity of a gift on the ground of nondelivery was not involved, nonetheless because of the statement of the reasons in consequence of which gifts of United States savings bonds are sustained in the absence of delivery to the donee is so plainly set forth, we quote in full the head notes in Harvey v. Rackliffe, 141 Me. 169 (41 Atl. [2d] 455, 161 A. L. R. 296):

“Treasury regulations in respect to the transfer of United States war savings bonds are a proper exercise of the power given to the secretary of the treasury by the congress; and they accordingly have the force and effect of Federal law.

“Under the" provisions of the Federal Constitution congress has the power ‘to borrow money on the credit of the United States,’ and ‘to make all laws which shall be necessary and proper for carrying into execution’ this power. Article 6, clause 2, provides that these laws ‘shall be the supreme law of the land; and the judges'in every State shall be bound thereby. . . . ’

“The capacity of the Federal government to borrow money depends on, the inviolability of its obligation, on its ability to 'carry it out strictly in accordance with its terms. If the State may treat the bonds here involved, or the proceeds of their sale, as the property of some person other than the one whom the contract has designated, the government has thereby been prevented from carrying out the agreement into which it has entered.

“In this case there was a contract with the United States for the benefit of a third party whose rights arise solely from the contract and in no sense by reason of a grant or gift; this contract gives the beneficiary a present, vested, though defeasible interest; it is governed by Federal law and must be enforced in accordance with its letter and its spirit uniformly throughout the United States; and no State statute or rule of law may stand in the way of such enforcement.

“Because of the supremacy of Federal law a State rule has no application to this contract.”

The issue of whether it is necessary to validly consummate the gift to the payee by another who purchased United States savings bonds that there must be delivery of the bonds is passed upon in Ibey v. Ibey, 93 N. H. 434 (43 Atl. [2d] 157). We quote from the head notes in the State report:

“United States government bonds purchased and made payable in the event of death to named beneficiaries are valid contracts for the benefit of third parties.

“A gift inter vivos may be perfected although no delivery is actually made where such gift is created by virtue of the terms of a savings bond of the United States government.”

In Myers v. Hardin, 208 Ark. 505 (186 S. W. [2d] 925), there was no delivery of the savings bonds to the payee named therein. The hqlding as expressed in the head note in the South Western Reporter is as follows:

“United States government bonds, issued to testatrix payable on death to various named beneficiaries and found in testatrix’ lockbox after her death, became the absolute property of beneficiary named in each immediately upon testatrix’ death provided beneficiary survived testatrix.”

In Inheritance Tax Division v. Chamberlin Estate, 21 Wash. (2d) 790 (153 Pac. [2d] 305, 156 A. L. R. 552), the holding of the court in the particular undeh consideration appears from the following head note:

“A gift of war savings bonds to the named payees was compléted at the time the donor furnished the consideration and directed the issuing officer to provide for the registration of the donees as owners of the bonds, even thoitgh the donor retained physical” possession of the bonds (which were found in his safety deposit box after his death), where it is clear that he intended to make the proceeds of the bonds available to the named payees.”

A holding by the Florida supreme court, in Re Briley’s Estate (April 6, 1945) reported in 155 Fla. 798 (21 South. [2d] 595), is in accord with.the above authorities.

In appellant’s brief numerous cases are cited to the point that delivery is essential to validity of a gift inter vivos; but with the exception of a single case about to be'noted, the cited cases do not involve gifts of United States savings bonds of the type and controlling terms here involved, and therefore are not here-in point. Appellant cites Deyo v. Adams, 178 Misc. 859 (36 N. Y. Supp. [2d] 734), (1942), holding, as stated in appellant’s brief, .“that the proceeds of United States savings bonds purchased in the name of the decedent, payable on his death to his sister, belonged to the estate for the reason that the transaction was invalid as a gift,” because decedent kept possession and control of the bonds. But the holding in the Deyo Case has been overruled, or at least is not in accord with a more recent, New York decision in Re Kalina’s Will, 184 Misc. 367 (53 N. Y. Snpp. [2d] 775), (1945), which, in harmony with the courts of other States hereinbefore noted, as stated in the syllabus holds:

“The right of beneficiary to enforce payment of nontransferable United States bonds upon registered owner’s death is superior to any expectant rights of registered owner’s surviving spouse.”

Our conclusion is that, under the circumstances of the instant case, George Parkinson by the purchase of the bonds in suit, made at his direction payable to defendant, consummated a gift of the bonds or the proceeds thereof to defendant. In reaching our conclusion we have deemed it unnecessary to refer to or rely upon Act No. 178, Pub. Acts 1945 (Comp. Laws Supp. 1945, § 9439-1, Stat. Ann. 1947 Cum. Supp. § 26.1261), which appellant contends cannot be retroactively applied in the instant case. Appellant’s contention in that respect is contrary to the holding in Re Kalina’s Will, supra. We do not herein pass upon that issue.

In part, appellant’s brief is devoted to the contention that on this appeal we should find a constructive trust in hex favor as to these savings bonds or the proceeds thereof. Plaintiff cannot be granted relief of that character for the reason, among others, that nothing relative to a trust is alleged in her bill of complaint nor is any such relief therein prayed. And under such circumstances, it is obvious that the case was not presented to the trial court on that claim or theory.

The decree entered in the circuit court is affirmed but with the proviso that our decision herein is not to be considered res judicata in any subsequent proceedings on the, law side of the court brought by plaintiff herein on the theory of fraud to which reference has herein been made. A decree will be entered in this Court accordingly. Appellee will have costs of this Court.

Bushnell, C. J., and Sharpe, Boyles, Reid, Dethmers, Butzel, and Carr, JJ., concurred. 
      
       See 31 USCA, § 757c.—Reporter.
     