Bank of America National Trust & Savings Ass'n v. Lerner

• Decision Date: 14 November 1968
• Docket Number: No. 25281.,25281.
• Citation: 401 F.2d 439
• Parties: BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Executor of the Estate of Oscar Schneider, also known as Oscar M. Schneider, Deceased, Appellant, v. George G. LERNER, also known as Guy G. Lerner, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

401 F.2d 439 (1968)

BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Executor of the Estate of Oscar Schneider, also known as Oscar M. Schneider, Deceased, Appellant, v. George G. LERNER, also known as Guy G. Lerner, Appellee.

No. 25281.

United States Court of Appeals Fifth Circuit.

October 11, 1968.

Rehearing Denied November 14, 1968.

Michael Weintraub, Miami, Fla., for appellant.

Joseph I. Davis, Miami, Fla., for appellee.

Before POPE^*, TUTTLE and CLAYTON^**, Circuit Judges.

Rehearing Denied November 14, 1968. See 404 F.2d 339.

TUTTLE, Circuit Judge:

This is an appeal from a decision of the United States District Court for the Southern District of Florida holding that Lerner, the survivor, was entitled to the funds remaining in a joint bank account with a right of survivorship as against the executor of the estate of the deceased codepositor. This is a diversity case, and the court sitting in Florida, the law of that state is controlling.

Appellee, Dr. Lerner, and deceased, Oscar Schneider, struck up an acquaintance resulting in a close personal friendship sometime during 1959-1960. Beginning in 1963 and for some two years following until the death of Schneider in October, 1965, the two shared an apartment in Miami and utilized a joint checking account with a survivorship agreement established on November 21, 1963, at the First National Bank of Miami. The parties stipulated prior to trial that the account was initially created to pay expenses "incident to the abode shared by the said parties". It was further stipulated that both Schneider and Lerner separately from time to time deposited their own separate monies in said account and that each drew checks upon the account.

On or about September 29, 1965, Oscar Schneider executed a check payable to the order of the First National Bank of Miami in the amount of $20,000. At the pre-trial stipulation, the parties agreed that Schneider made out a deposit ticket dated September 29, 1965, for this check with the account number (32-902-9) of the joint account imprinted on the ticket. Shortly thereafter on October 1, 1965, Oscar Schneider became gravely ill and was admitted to Cedars of Lebanon Hospital in Miami where he remained until his death, October 13, 1965. Lerner, being a close personal friend of Schneider's, visited with him constantly until his death, and, in a manner not explained at the trial, Lerner got possession of the check and deposit slip at the hospital on October 5, 1965. On that same date, Lerner endorsed the check "For Deposit only Oscar M. Schneider 32-902-9" and deposited the check into the joint account. After Schneider's death on October 13, 1965, Lerner withdrew the balance of the account.

The trial judge's finding of law and facts pertinent to this appeal are: (1) that on November 21, 1963, Schneider and Lerner personally signed and opened a joint and survivor bank account at the First National Bank of Miami; (2) that Schneider and Lerner each contributed his own separate funds to the joint bank account, and each separately drew checks thereon, and each had a present interest in the funds therein at the time of the death of either of them; (3) that on September 29, 1965, Oscar Schneider personally drew his check in the sum of $20,000 and personally prepared a deposit slip for said check to the joint and survivor bank account which said check and deposit slip were received by the First National Bank of Miami and marked "Paid," on October 5, 1965; (4) that Florida Statute § 689.15, F.S.A. provides for the right of survivorship by means of a joint bank account with right of survivorship, by express provision in the instrument creating the estate; (5) that Oscar Schneider intended to create a right of survivorship to the funds in the joint bank account and did so with respect to Dr. Lerner; (6) that Schneider's donative intent was "amply demonstrated" by the fact that he personally prepared the check and the deposit slip; (7) that Lerner had a present interest in the joint bank account on November 21, 1963, when it was created, which included the proceeds of the check for $20,000 dated September 29, 1965, and that pursuant to the opinion in Maier v. Bean, 189 So.2d 380 (Fla.App. 1966), Lerner, as the survivor, was entitled to the funds in the joint bank account. Finally, the court found Lerner was entitled to all the funds remaining in the joint bank account, the plaintiff having failed to present clear and convincing evidence to the contrary.

Appellant-executor asserts first that the district court erred in holding that Lerner acquired a survivorship interest in the joint account from its inception when that account was created solely to pay joint household expenses. Appellant relies heavily on the leading Florida case of Spark v. Canny, 88 So.2d 307 (Fla.1956). The Spark case held that

* * * where a joint bank account with right of survivorship is established with funds of one person * * a gift of the funds remaining in the account at the death of the creator of the joint account is presumed; but such presumption is rebuttable and may be overcome by clear and convincing evidence to the contrary. 88 So.2d at 311, 312.

Appellant contends the pre-trial stipulation that the fund was created initially for the payment of household expenses conclusively rebuts the presumption of gift in favor of Lerner. Appellee also relies on the Spark case as affording him the presumption of a gift and states that no clear and convincing evidence was produced to rebut the presumption.

At the outset, it must be observed that the Spark rule does not literally apply to the facts of this case. The Spark holding applies only where the joint bank account was established with funds of one person. In the Spark case itself, the evidence showed that the account was created solely with the funds of an elderly lady and that it was only a joint account so that her daughter could draw funds on it to pay the elderly woman's medical expenses. The court's pronouncement in that case that a gift was to be presumed was largely based on the fact that the funds all belonged to one person. In the case where both parties contribute funds to an account established for a special purpose, there is no presumption of gift logically or under Florida law. If two parties contribute funds for some special purpose, it is unlikely that they intended to make mutual gifts. This would certainly be a circuitous route to follow in order to bestow favors on one another. It is much more likely that such an account was established for the sake of convenience only. 38 C.J.S. Gifts § 50, p. 836. In addition, the Florida courts do not presume a gift from every survivorship account agreement. As we have stated, the presumption of Spark v. Canny applies only where the funds belong to one individual. Further, in North Shore Bank v. Shea, 148 So.2d 60 (Fla.App.1963), the court, in reversing a lower court judgment for the survivor, specifically held that whether or not the survivor conclusively proved a joint account with right of survivorship was irrelevant if the funds were contributed by more than one party. Since it had been shown that the account was established for convenience in taking care of joint expenses, the majority remaded the case for a determination as to "whether the facts adduced at the trial showed a gift inter vivos or an attempted testamentary transfer".

Having decided that no presumption of gift attached to the funds in this joint bank account, there remains only the question of whether Mr. Schneider intended to use the account for the purpose of making a valid in praesenti inter vivos gift to Lerner. Initially, the burden of proof rests on Lerner to establish each and every element of such a gift by clear and satisfactory evidence. Burke v. Coons, 136 So.2d 235 (Fla.App.1961). The essential elements of a...