Beacon Mill. Co., Inc. v. Larose

• Decision Date: 11 June 1980
• Docket Number: Nos. 380-79,381-79,s. 380-79
• Citation: 138 Vt. 457,418 A.2d 32
• Court: Vermont Supreme Court
• Parties: The BEACON MILLING CO., INC. d/b/a Beacon Feeds Service v. Albert LAROSE, Chittenden Trust Company, The Howard Bank, Franklin-Lamoille Bank, Peoples Trust Company of St. Albans, and Sterling Trust Company.

Page 32

418 A.2d 32

138 Vt. 457

The BEACON MILLING CO., INC. d/b/a Beacon Feeds Service v. Albert LAROSE, Chittenden Trust Company, The Howard Bank Franklin-Lamoille Bank, Peoples Trust Company of St. Albans, and Sterling Trust Company.

Nos. 380-79, 381-79.

Supreme Court of Vermont.

June 11, 1980.

John C. Gravel, of Bing & Bauer, Burlington, for plaintiff.

Peter J. R. Martin, St. Albans, for defendants.

Before BARNEY, C. J., and DALEY, LARROW, BILLINGS and HILL, JJ.

DALEY, Justice.

In each of the actions now before us the plaintiff was granted summary judgment against the defendant Albert Larose, and then moved for trustee process in an attempt to satisfy the judgments. 12 V.S.A. ch. 121; V.R.C.P. 4.2. This motion was granted, and several trustees filed disclosures. Among the disclosures was an account with the Howard Bank, held in the name of "Rita Larose or Albert Larose." Plaintiff moved for judgment against the Howard Bank as trustee. Defendant Albert Larose, joined by his wife, Rita Larose, as an interested party, responded with a motion to release the account on the ground that it was held by them as tenants by the entirety, and therefore exempt from execution for Mr. Larose's sole debts. The Howard Bank, alleging conflicting claims to the funds in question, moved for a determination of the party to whom it was liable. V.R.C.P. 22. Based on oral argument of counsel and memoranda of law, the court in each action denied defendant's motion to release the account, granted plaintiff's motion for judgment against the trustee, and ordered the Howard Bank to pay the amount in question to the plaintiff. The defendant Albert Larose appeals. His wife has not joined this appeal, and was never formally made a party below.

Defendant's claim, as presented below and briefed on appeal, presented two theories for exemption of these funds: first, that they are held to Mrs. Larose's sole and separate use, and therefore protected by 15 V.S.A. § 66; and second, that they are entirety property, exempt by common law. The trial court rejected the first theory on the strength of a 1911 federal district court opinion which stated that the protections of the predecessor to 15 V.S.A. § 66 apply "so long as the wife keeps her property separate from that of her husband . . . ." In re Hill, 190 F. 390, 391 (D.Vt.1911). The trial court rejected the second argument on the strength of 8 V.S.A. § 908, which permits the bank to pay either party to a joint account. The court reasoned that this statute allows either spouse to deplete the account unilaterally, which would not be permissible if the account were held by the entirety.

In our opinion the trial court erred in holding as a matter of law that defendant and his wife do not hold this account as tenants by the entirety. The statute relied on, 8 V.S.A. § 908, states in part:

When a deposit has been made in a bank in the names of two or more persons, payable to any one of them . . ., such deposit or any part thereof, or any interest or dividend thereon may be paid to any one of such persons . . ., and the receipt or acquaintance (sic ) of the person so paid shall be a valid and sufficient release and discharge of the bank for any payment so made.

We have previously held that the provisions of this statute "are for the protection of the bank paying money to persons named in deposits made in the manner specified in the statute and do not change or affect the title to such deposit." Rice v. Bennington County Savings Bank, 93 Vt. 493, 503, 108 A. 708, 712 (1920) (emphasis added); see Methodist Church v. First National Bank, 125 Vt. 124, 130, 211 A.2d 168, 172 (1965). Therefore, despite § 908, title to this account remains a critical question to be determined on the evidence.

It is well established that spouses can hold personal property as tenants by the entirety. Swanton Savings Bank & Trust Co. v. Tremblay, 113 Vt. 530, 534, 37 A.2d 381, 383 (1944); George v. Dutton's Estate, 94 Vt. 76, 78, 108 A. 515, 516, 8 A.L.R. 1014, 1016 (1920). Contrary to the federal court's opinion in In re Hill, supra, it is also established in this state that property held by the entirety is protected by 15 V.S.A. § 66 from the husband's sole creditors, Rose v. Morrell, 128 Vt. 110, 112, 259 A.2d 8, 10 (1969); George v. Dutton's Estate, supra, 94 Vt. at 79, 108 A. at 516, 8 A.L.R. at 1016; Town of Corinth v. Emery, 63 Vt. 505, 508-09, 22 A. 618, 618-19 (1891), unless of course it falls within the exceptions stated in 15 V.S.A. § 67, which this property does not. Therefore, the court below is faced with an evidentiary decision. If this property is held as a tenancy by the entirety, or if it is held to Rita Larose's sole and separate use, it is not chargeable for Albert Larose's sole debts regardless of the fact that his name is on the account. The...