Balazick v. Ireton
| Decision Date | 20 May 1988 |
| Citation | 541 A.2d 1130,518 Pa. 127 |
| Parties | Helen BALAZICK, Appellee, v. Lois B. IRETON, Appellant. |
| Court | Pennsylvania Supreme Court |
George B. Stegenga, Mark F. Geary, Washington, Pa., for appellant.
William R. Nalitz, Waynesburg, Pa., for appellee.
Before NIX, C.J., and LARSEN, FLAHERTY, McDERMOTT, ZAPPALA, PAPADAKOS and STOUT, JJ.
In 1980 Helen Balazick and her husband Charles created five joint accounts with the First National Bank of Wheeling in the face amount of $54,000 each. Each of these accounts, which took the form of repurchase agreements, was titled jointly in the names of one of the parents and one of their five children, with a different child's name appearing on each certificate with one of the parents. 1
The agreements were titled as follows:
NAME AMOUNT
----------
1. Charles Balazick or Charles J. Balazick $54,000
2. Charles Balazick or Theresa Albert $54,000
3. Charles Balazick or Edith Bunting $54,000
4. Helen Balazick or Lois Ireton $54,000
5. Helen Balazick or Rose Alcorn $54,000
Except for a small sum of money contributed to make each of the certificates of equal amount, the money used to create these five repurchase agreements came from the accumulated savings of Helen and Charles Balazick which had previously been held in various accounts titled as tenants by the entireties.
The reason for creating the five accounts listed above was to provide a scheme whereby the Balazicks' children could inherit equal shares of cash at the death of their parents without going through probate. As the trial court found, however, the purpose in creating these accounts was also to afford the parents control over the funds during their lifetimes:
The plaintiff and her husband desired to control the funds during their lifetimes in order to be able to use the interest from them, if they so desired, or any amount of the principal, with the unused portion to pass to the children as planned.
When Charles Balazick died in November of 1982, the three agreements in the joint names of Charles Balazick or Charles J. Balazick, Charles Balazick or Theresa Albert, and Charles Balazick or Edith Bunting passed to the surviving children. The agreements in the names of Helen Balazick or Lois Ireton and Helen Balazick or Rose Alcorn remained in the possession of Helen Balazick.
After the death of her father, Lois Ireton became concerned that she might not inherit the money contained in the repurchase agreement titled in her name and her mother's. Although Lois testified that her father had told her the money in the joint account with her mother was hers, N.T. 51, her mother indicated to her that she might never get the money in the account, N.T. 50. Subsequently, in March, 1983, Lois Ireton unilaterally removed from her mother's desk the agreement bearing her name and that of her mother. She then drove to Wheeling, West Virginia, where she presented the agreement to the First National Bank of Wheeling and requested that the bank allow her to withdraw $5,000 and reissue the agreement in her name alone. The agreement at that time was worth $72,966.59. The bank complied, and subsequently, she withdrew the entire amount remaining and placed it in other accounts which were under her exclusive control. When Helen Balazick discovered that the agreement had been taken, she demanded its return. Her daughter refused, and Helen Balazick brought an action in equity in the Greene County Court of Common Pleas to compel the return of the funds plus interest.
The trial court found as fact that
[Lois Ireton] acknowledged that she did not own the Repo [repossession agreement] nor was she entitled to the interest therefrom without the consent of the plaintiff [Helen Balazick], but converted the certificate in her own name in order to protect her interest in the certificate from being dissipated by the plaintiff for the benefit of other members of the family.
The trial court also found as fact:
There is no disagreement between the parties that the plaintiff [Helen Balazick] has the right to invade the principal, if that is necessary, for her maintenance and support, nor is there any disagreement that she has an absolute right to the entire interest during her lifetime, with the balance of the principal and unclaimed interest to pass to the defendant upon the death of the plaintiff.
The removal of the certificate from the possession of the plaintiff was illegal and without authorization, and the conversion of the Repo solely in the name of the defendant, and the withdrawal of the $5,000 was also illegal and without authorization.
In spite of its finding that Lois Ireton had illegally converted funds belonging to her mother, the trial court ordered Lois Ireton to return the money in question to her mother, but imposed a trust on the funds as follows:
Lois B. Ireton is directed to account to this Court forthwith for the principal sum of $72,966.59, and all interest earned or that could have been earned therefrom, within thirty days of the date of this order, and shall surrender said sum to the plaintiff to be reinvested in a Repo, or other type of investment, in the names of Helen Balazick or Lois B. Ireton in an amount not less than $72,966.59.
The plaintiff, Helen Balazick, may utilize any or all of the interest earned by the certificate for her own personal use, but shall not invade the principal without order of this Court.
(Emphasis added.) The trial court's rationale was that Helen Balazick and her husband had entered into an agreement to distribute their assets equally among the children while retaining control of the repurchase agreements during their lifetimes, that this agreement had been partly executed at the time of the husband's death, and that it would be inequitable to "vary the terms of the agreement by changing the status quo after the death of the husband."
Helen Balazick appealed from the trial court's final decree, and on August 15, 1986, Superior Court reversed that part of the trial court's order which imposed a constructive trust on the principal amount of the repurchase agreement, 357 Pa.Super. 68, 515 A.2d 562. Superior Court's rationale was that the mere presence of both names on the repurchase agreement did not establish a joint tenancy, that there was no gift over to Lois Ireton, and that Lois Ireton, therefore, had no present interest in the funds of the repurchase agreement. Moreover, the court held that there was no basis in the record for the imposition of a constructive trust. As Superior Court put it:
Before a constructive trust can arise, ... it is necessary that the owner of the property must have acquired title to it in some way that creates the equitable duty in favor of the person who would benefit from the trust. Pierro v. Pierro, 438 Pa. 119, 264 A.2d 692 (1970). This is not the case here. The funds originally belonged solely to appellant. None of the funds ever belonged to the appellee and the appellee has no interest in the funds. The most appellee ever had was an expectation that, if appellant had not used the funds during her lifetime, appellee would receive them at appellant's death. Appellant has neither a legal nor an equitable duty to preserve the funds for the benefit [of] appellee.
Our analysis of this case begins with consideration of the Probate, Estates and Fiduciaries Code, which defines "account" and "joint account" as follows:
Account means a contract of deposit of funds between a depositor and a financial institution, and includes a checking account, saving account, certificate of deposit, share account and other like arrangements.
Joint account means an account payable on request to one or more of two or more parties whether or not mention is made of any right of survivorship.
20 Pa.C.S. § 6301. Thus, contrary to the determination of Superior Court, since the repurchase agreement in question was not unlike a share account or certificate of deposit and was titled in the names of Lois Ireton or Helen Balazick, it was a joint account.
Ownership of joint accounts is treated in the Probate, Estates and Fiduciaries Code as follows:
A joint account belongs, during the lifetime of all parties, to the parties in proportion to the net contributions by each to the sum on deposit, unless...
To continue reading
Request your trial
-
In re Kulzer Roofing, Inc.
...F.2d 319 (3d Cir.1973); In re American Int'l Airways, Inc., 44 B.R. 143, 146 (Bankr.E.D.Pa.1984) ("AIA I"); Balazick v. Ireton, 518 Pa. 127, 134-35, 541 A.2d 1130, 1133 (1988); Buchanan v. Brentwood Federal Savings & Loan Ass'n, 457 Pa. 135, 150, 320 A.2d 117, 126 (1974); and Kimball v. Bar......
-
In re Novosielski
...that an "account" that bears resemblance to a bank account falls within the MPAA's definition of "account"); and Balazick v. Ireton, 518 Pa. 127, 541 A.2d 1130, 1132 (1988) (repurchase agreements designed to provide for the parents' life-time support with a right of survivorship in their ch......
-
Koffman v. Smith
...to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain it." Balazick v. Ireton, 518 Pa. 127, 134, 541 A.2d 1130, 1133 (1988) (quoting Pierro v. Pierro, 438 Pa. 119, 127, 264 A.2d 692, 696 (1970)). Traditionally, constructive trusts have been ......
-
Lessner v. Rubinson
...in contemplation of a joint savings account, it is equally applicable to certificates of deposit. See e.g., Balazick v. Ireton, 518 Pa. 127, 541 A.2d 1130 (1980); In re Estate of Chiara, 467 Pa. 586, 359 A.2d 756 (1976); 20 Pa.C.S. § 6301.7 Ms. Rubinson also argues in her brief that Mr. Les......