Able-old Hickory Bldg. & Loan Ass'n v. Polansky

• Decision Date: 03 June 1946
• Docket Number: 148/695.
• Citation: 47 A.2d 730
• Parties: ABLE-OLD HICKORY BUILDING & LOAN ASS'N et al. v. POLANSKY et al.
• Court: New Jersey Court of Chancery

47 A.2d 730

ABLE-OLD HICKORY BUILDING & LOAN ASS'N et al.

v.POLANSKY et al.

148/695.

Court of Chancery of New Jersey.

June 3, 1946.

Suit by the Able-Old Hickory Building & Loan Association and others against Louis Polansky, executor, and others to determine ownership of liquidating dividends on dissolution of the named complainant.

Order in accordance with opinion.

Syllabus by the Court.

1. When title to personal property is placed in husband and wife without words to the contrary, they hold as tenants in common, and upon the death of one of them, the decedent's title passes to his personal representative. But a joint tenancy is created when title is put in the names of husband and wife, or the survivor, and then, upon the death of one of them, the survivor becomes entitled to the whole.

2. Upon dissolution of a building and loan association, its property becomes a trust fund for creditors and stockholders. Members who hold their shares in joint tenancy become entitled to an equitable joint estate in their proportion of the common fund with right of survivorship. Members who hold shares in common take an equitable tenancy in common.

3. When the trustees in dissolution declare a liquidating dividend, they thereby enter into a special relationship of trust with the members in respect to the sums allocated to them severally.

4. The liquidating dividend belongs to whoever owns the shares at the time the dividend is declared.

5. Where a dividend was payable to husband and wife jointly and not severally, and before the dividend was actually paid to them, the husband died, his interest in the dividend passed to his executor.

6. While possession is an indication of title, yet as between husband and wife it is very slight and is not sufficient by itself to prove a gift.

Robert E. Pollan, of Passaic, for defendant Louis Polansky, executor.

John J. Ewart, of Toms River, for defendant Jacob Saladon, guardian.

BIGELOW, Vice Chancellor.

The Home Builders Building and Loan Association issued certain shares of its capital stock in the names of Morris Polansky and Ida, his wife, or survivor, and other shares in their names without the addition of words of survivorship. Polansky died in 1945 and shortly thereafter a guardian was appointed for his wife, who had become incompetent. There is no tenancy by the entirety of personal property in this state. When title to personal property is placed in husband and wife, without words to the contrary, they hold as tenants in common, and upon the death of one of them, the decedent's title passes to his personal representative. But a joint tenancy is created when title is put in the names of husband and wife, or the survivor, and then, upon the death of one of them, the survivor becomes entitled to the whole. Aubry v. Schneider, 69 N.J.Eq. 629, 60 A. 929; Id., 70 N.J.Eq. 809, 67 A. 1102; Franklin National Bank v. Freile, 116 N.J.Eq. 278, 173 A. 93; Id., 117 N.J.Eq. 405, 176 A. 167; Whelan v. Conroy, 126 N.J.Eq. 607, 10 A.2d 636.

A few years before Polansky's death, the Home Builders Building and Associations merged into the Able-Old Hickory Building and that association voluntarily dissolved, pursuant to R.S. 17:12-81, N.J.S.A. Upon dissolution of a corporation, its property becomes a trust fund for creditors and stockholders, and the title evidenced by a stock certificate becomes an equitable right to a distributive share in the fund. Bijur v. Standard Distilling etc. Co., 74 N.J.Eq. 546, 557, 70 A. 934; Id., 78 N.J.Eq. 582, 81 A. 1132. Upon dissolution of the Association, Mr. and Mrs. Polansky, by right of their jointly held shares, became entitled to an equitable joint estate in their proportion of the common fund, with right of...