Summary
In Union Properties, Inc. v. Cleveland Trust Co. (1949), 152 Ohio St. 430, 435, 40 O.O. 425, 89 N.E.2d 638, this court held that a husband's creditor could not appropriate money from a joint account, of which the husband was a joint account holder, because there was evidence of "sufficient probative force [that] the money on deposit was in reality the sole property" of his wife.
Summary of this case from In re Estate of CowlingOpinion
No. 31785
Decided December 28, 1949.
Banks and banking — Joint and survivorship account of husband and wife — Form of deposit not conclusive as to joint ownership — Different basis may be shown by evidence — Proceedings in aid of execution — Record joint account not subject to appropriation by husband's judgment creditor, when.
1. Where money is deposited in a bank in an account carried in the joint names of a husband and wife, with the balance at the death of either payable to the survivor, and a judgment creditor of the husband during the lives of the husband and wife attempts by a proceeding in aid of execution to appropriate the money in such account in the right of the husband, the form of the deposit is not conclusive on the subject of joint ownership and evidence may be introduced that the deposit was in truth made and maintained on a different basis.
2. The money in such account is not subject to appropriation by the husband's judgment creditor, where it is found upon evidence of sufficient probative force that notwithstanding the form of the deposit the money is in reality the sole property of the wife.
APPEAL from the Court of Appeals for Cuyahoga county.
This case is before the court for disposition pursuant to the allowance of the motion of Union Properties, Inc., to require the Court of Appeals to certify its record.
It appears that in October, 1941, Union Properties, Inc., obtained a default judgment for $800.45 against one John Allen in the Municipal Court of Cleveland.
In August, 1947, motion for a conditional order of revivor of judgment was filed and later granted. After the filing of the motion for a conditional order of revivor, an order in aid of execution was issued against The Cleveland Trust Company as the debtor of Allen.
Upon hearing, the proceedings in aid of execution were sustained and The Cleveland Trust Company was "ordered to pay into court, out of money in its hands belonging to the defendant [Allen] a sum sufficient to satisfy the judgment and all costs in this action."
The Cleveland Trust Company did not comply with the order and an action was thereafter brought against it in the Municipal Court by Union Properties, Inc., to recover the sum of $792 with interest and costs. In an order of interpleader, entered at the instance of The Cleveland Trust Company, it, the trust company, was directed to pay to the clerk of the Municipal Court the sum of $795.37 and John Allen and his wife, Needa Allen, also known as Nellie Allen, were made parties defendant to the action with the right to "set up their claims to the said funds." In the separate answer and cross-petition of Needa Allen, she averred among other things:
"That at all of said times the said sum of $792 in the possession of the defendant, The Cleveland Trust Company, was held by said trust company on a savings account, payable to the order of either of said Needa Allen or of said John Allen, or the survivor of them. That at all of said times said money in said bank, and credit from said bank for same, was the sole separate property of this new defendant, Needa Allen, and that said defendant John Allen had no right, claim, title or interest therein or thereto."
Under the pleadings and evidence, it appears that on July 5, 1941, upon a deposit of $100, a savings account was opened in the name of John Allen with The Cleveland Trust Company. Sometime later the name of Nellie or Needa Allen was added and the account became one, on the records of the bank at least, where either of the Allens could draw money therefrom, with the balance at the death of one payable to the survivor.
Both John and Needa Allen testified that the original deposit of $100 and all other money subsequently deposited belonged exclusively to Needa; that the original one hundred dollar deposit represented the repayment of money which she, Needa, had loaned; and that the account was opened in the name of John Allen because Needa Allen by reason of an injury was prevented from going to the bank.
Testifying as to the original deposit, John Allen, who claimed that he had had no regular or steady employment for a number of years, stated:
"* * * I carried it up there and opened up that there account for her, and until later on she got able to go up there and put her name on the bank book herself.
"They gave me a card to take back to my wife. I asked for a card.
"* * *
" — it had to have Needa Allen's signature."
Needa Allen testified that the additional deposits subsequently made represented, for the most part, an allotment of $35 per month to her from the pay of a nephew during his service in the United States Army and other sums received from him and from other sources. The nephew became a witness and substantiated the testimony of his aunt as to the allotment and additional amounts sent her.
A finding and judgment was entered by the Municipal Court in favor of Needa Allen on the ground "that it is her money, and is not subject to payment of the judgment against her husband John Allen." The clerk of the court was ordered to pay her the funds in his hands which had been placed there by The Cleveland Trust Company.
A motion for a new trial was filed and overruled and on appeal on questions of law to the Court of Appeals, that court, without a written opinion, affirmed the judgment below.
Mr. Paul P. Sogg and Mr. Owen C. Neff, for appellant.
Mr. Charles A. Chandler, for appellees.
In the case of Cleveland Trust Co. v. Scobie, Admr., 114 Ohio St. 241, 151 N.E. 373, 48 A.L.R., 182, this court laid down the rule, since adhered to in principle, that where one opens a savings account in a bank to the joint credit of himself and another, payable to either or the survivor, and it is apparent that the depositor intended to transfer to the person, to whom he made the account jointly payable, a present joint interest therein equal to his own, the person to whom the account is made jointly payable is entitled to the balance of the money in the account upon the death of the depositor as against the claim thereto of the depositor's personal representative.
Section 710-120, General Code, enacted solely for the benefit and protection of banks, provides:
"When a deposit has been made, or shall hereafter be made in any bank or trust company transacting business in this state in the name of two or more persons, payable to either, or the survivor, such deposit or any part thereof, or any interest or dividend thereon, may be paid to either of said persons whether the other be living or not; and the receipt or acquittance of the person so paid shall be a valid and sufficient release and discharge to the bank for any payments so made."
Basing its argument upon the holding in the Scobic case, supra, language used in the opinion in that case, other cited cases and Section 710-120, General Code, Union Properties, Inc., contends that under the contract of deposit, John Allen was invested with a present joint and equal interest in the deposit which would have enabled him to withdraw all the funds at any time, hence, Union Properties, Inc., pursuant to its judgment against John Allen and the order in aid of execution issued thereon, can compel the appropriation of the funds in the account to itself in the right of John Allen.
Most of the cases decided by this court relating to so-called joint and survivorship bank accounts dealt with the status and rights of the survivor. Under those decisions, the survivor has been held entitled to the balance in the account because he ostensibly acquired a joint and equal interest in the funds under the contract of deposit and nothing transpired during the lives of the depositors to indicate that the intention was different from that expressed in such contract. See Berberick v. Courtade, 137 Ohio St. 297, 28 N.E.2d 636, and the cases cited therein.
However, no question of a survivor's rights is involved in the present controversy. Neither do we have a situation where a bank complied with an order in aid of execution and paid the deposit to the judgment creditor of one of the depositors. Here, we are concerned wholly with a subsisting deposit intact and the rights, intention and attitude of the depositors with respect thereto during their joint lives.
In our opinion, in controversies like the present one involving the deposit and arising during the joint lives of the depositors, the form of the deposit should not be treated as conclusive on the subject of joint ownership and the door should be opened to evidence that the deposit was in truth made and maintained on a different basis. In other words, the "realities of ownership" may be shown. The leading case in the United States supporting this rule is Moskowitz et al., Exrs., v. Marrow, 251 N.Y. 380, 167 N.E. 506, 66 A.L.R., 870, concurring opinion by chief Judge Cardozo, approved by five of the associate judges. Compare Buckley v. Buckley, 301 Mass. 530, 17 N.E.2d 887; People's Savings Bank in Providence v. Rynn, 57 R.I. 411, 417, 190 A. 440, 443.
Contained in a note appearing in the annotation in 161 A.L.R., at page 73, is the following comment:
"In general, the cases concede, or assume, that parol or other evidence is admissible to show the true intent of the parties to a formally joint account, even where by signature card or otherwise it would appear that joint and equal interests were created."
The above principle was recognized in Nichols v. Metropolitan Life Ins. Co., 137 Ohio St. 542, 548, 31 N.E.2d 224, 226, where Judge Turner said in the opinion:
"Had appellant attempted to withdraw the funds in the joint account while the bank was open for business and had the bank refused to permit such withdrawal, appellant might have secured a several judgment upon the ground that her right to the entire deposit had become fixed by her demand. Even then, it would have been necessary to have made the mother a party, with opportunity to set up whatever claims the mother might care to put forward."
This court does not weigh evidence. Both the lower courts found, in effect, upon evidence of sufficient probative force that, notwithstanding the form of the account in the bank, the money on deposit was in reality the sole property of Needa Allen and that in opening the account and subsequently it was not the intention that John Allen should have a joint and equal interest therein. This being so, it followed that Union Properties, Inc., could not appropriate the money in the account to satisfy the judgment it held against John Allen alone.
The judgment of the Court of Appeals is accordingly affirmed.
Judgment affirmed.
WEYGANDT, C.J., MATTHIAS, HART, STEWART, TURNER and TAFT, JJ., concur.