Beehive State Bank v. Rosquist

• Decision Date: 04 April 1968
• Docket Number: No. 11053,11053
• Citation: 21 Utah 2d 17,439 P.2d 468
• Parties: d 17 BEEHIVE STATE BANK, a corporation, Plaintiff and Appellant, v. Deon ROSQUIST et al., Defendants, First Security Bank of Utah, N.A., a corporation, Garnishee, Fred L. Painter, Intervenor and Respondent.
• Court: Utah Supreme Court

Page 468

439 P.2d 468

21 Utah 2d 17

BEEHIVE STATE BANK, a corporation, Plaintiff and Appellant, v. Deon ROSQUIST et al., Defendants First Security Bank of Utah, N.A., a corporation Garnishee Fred L. Painter, Intervenor and Respondent.

No. 11053.

Supreme Court of Utah.

April 4, 1968.

Robert M. Anderson, Stephen D. Swindle, of Van Cott, Bagley, Cornwall & McCarthy, Salt Lake City, for appellant.

Will L. Hoyt, Nephi, for defendants.

L. Ridd Larsen, of Ray, Quinney & Nebeker, Salt Lake City, for garnishee.

ELLETT, Justice.

The Beehive State Bank was a judgment creditor of Ila R. Painter, and during her lifetime it attached a joint checking account standing in the names of Ila R. Painter and Fred L. Painter, her husband. Upon the death of Ila, her personal representative was substituted as a defendant in the case. The respondent, Fred L. Painter, intervened and moved the court to release the funds from garnishment. In support thereof he filed an affidavit wherein he stated that the funds deposited in said account were at the respective times of deposit his sole property and not the property of his wife. He further states in the affidavit that he and his wife were indebted to the garnishee bank in an amount greater than the joint account. Beehive made no effort to counter this affidavit. The court granted the respondent's motion and ordered the funds released from garnishment.

The Beehive State Bank appeals, contending that since Ila could have withdrawn all of the funds and kept them, it as a judgment creditor is entitled to apply all of the funds held by the garnishment in satisfaction of its judgment against Ila R. Painter.

There is no claim made that there is any formal defect in the garnishment proceedings. However, the respondent claims all of the funds as his own by reason of the original ownership thereof as set forth in his affidavit.

It is well settled that a joint bank account is subject to garnishment by a judgment creditor of only one of the joint depositors. However, it has also been held that where the depositor has no interest in the joint bank account, although his name is on the signature card, the account is not subject to garnishment under a levy of execution by his judgment creditor. See 30 Am.Jur.2d, Executions, § 800, wherein it is said:

In jurisdictions applying the general rule that joint bank accounts are vulnerable to seizure by the judgment creditor of one depositor, the courts usually hold that the judgment creditor's rights are limited to the amount of the funds in the account equitably owned by the debtor depositor and do not extend to funds equitably owned by the other depositor. Thus, the view has been expressed that if the evidence shows that the depositors have an equal right to the funds in the joint account, a garnishing creditor of one of them may recover one-half of the moneys in such account. * * *

Cases discussing this point are collected in the annotation in 11 A.L.R.3d 1473 (1967). Decisions are listed from the United States Federal Courts, as well as from the States of Arkansas, California, Illinois, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, Ohio, pennsylvania, Rhode Island, and Texas. Only Minnesota has held the entire fund to be subject to garnishment by a judgment creditor of one of the depositors.

The law regarding rights of parties to joint accounts has been on shifting sands in Utah. Prior to 1934 the survivor's right was established only by his showing, by a preponderance of the evidence, that a joint tenancy had in fact been created or that a completed gift of the fund had been made to him. The court did not then regard the contract with the bank as being sufficient proof to establish a joint tenancy agreement between the parties, and so extrinsic proof was required. Holman v. Deseret Savings Bank, 41 Utah 340, 124 P. 765 (1912); Columbia Trust Co. v. Anglum, 63 Utah 353, 225 P. 1089 (1924).

In the case of Holt v. Bayles, 85 Utah 364, 39 P.2d 715, decided in 1934, this court thought that the bank depositors' signature card purporting to create a joint tenancy was sufficient in and of itself to create a joint interest of each depositor in and to the fund, absent a showing of fraud, mistake, incapacity, or other infirmity. In 1941 this court attempted to place a limitation upon the Holt case when it had before it the case of Neill v. Royce, 101 Utah 181, 120 P.2d 327. This latter case involved a contest between a third party and a codepositor and did not involve the rights of a surviving codepositor to a fund. At page 188 of the Utah Reports at page 330 of 120 P.2d this court said:

Holt v. Bayles, supra, and the conclusive principle therein laid down that 'intention ceases to be an issue and the courts are bound by the agreement' is not controlling under the circumstances of the instant case; nevertheless, there remains a presumption of joint tenancy where both cotenants are alive.

Cardozo, C.J., in his concurring opinion in Moskowitz v. Marrow, 251 N.Y. 380 167 N.E. 506, 512, 66 A.L.R. 870, points out that

'the plain implication is that as between the depositors themselves, the form of the deposit gives rise to a presumption and nothing more, but that after the death of either leaving a deposit then subsisting, the presumption becomes conclusive as to the title of the survivor.'

This view is consistent with our opinion expressed in Holt v. Bayles, supra, and in this case.

This presumption, injected by courts of equity since ancient time, continues and can be overcome by the intervener only by clear and convincing proof to the contrary.

The Neill case thus holds that the contract of joint tenancy raises a presumption of the joint interest which can be overcome by an intervenor only by clear and convincing proof to the contrary. See Braegger v. Loveland, 12 Utah 2d 384, 367 P.2d 177.

In 1960 this court was not ready to break entirely with its holding in Holt v. Bayles, supra, and in the case of First Security Bank of Utah v. Demiris, 10 Utah 2d 405, 354 P.2d 97, said at page 408 of the Utah Reports, at page 99 of 354 P.2d

* * * But there is another question to consider: in view of the circumstances disclosed by the evidence as to the creation of the account, and the fact that the defendant withdrew the money for her own purposes prior to the decedent's death, where was the ownership of that money? (Emphasis added.)

In that connection it should be stated that we are not here disagreeing with the ruling in the case of Holt v. Bayles, but it is significantly different from this case. It dealt with money remaining in a joint account after the death of one of the parties. The presumption was applied that such money passed to the surviving joint tenant, which seems sound in view of the necessity of some certainty in dealing with such accounts. It is to be recognized that the bank or other depository is normally protected in permitting withdrawal by either signator. But as between the parties themselves, the situation may be different. (Emphasis added.)

In 1961 Holt v. Bayles, supra, was overruled by the case of Tangren v. Ingalls, 12 Utah 2d 388, 367 P.2d 179. At page 390 of the Utah Reports, at page 181 of 369 P.2d this court said.

It is of passing interest to note that in earlier times in cases dealing with such accounts, this court indicated a view that a survivor claiming the fund after the death of the original owner had the burden of showing that the latter intended to make a gift of the fund. But that view is long since...