Commerce Trust Co. v. Watts

• Decision Date: 10 July 1950
• Docket Number: No. 41762,No. 1,41762,1
• Citation: 231 S.W.2d 817,360 Mo. 971
• Parties: COMMERCE TRUST CO. v. WATTS et al
• Court: Missouri Supreme Court

Page 817

231 S.W.2d 817

360 Mo. 971

COMMERCE TRUST CO. v. WATTS et al.

No. 41762.

Supreme Court of Missouri, Division No. 1.

July 10, 1950.

Roy P. Swanson, Charles B. Blackmar, and Blackmar, Newkirk, Eager, Swanson & Midgley, all of Kansas City, for appellant.

W. Raleigh Gough, Kansas City, for respondent.

CONKLING, Presiding Judge.

Commerce Trust Company, a banking corporation (hereinafter called the Trust Company), having a sum of money on joint deposit, filed its bill of interpleader in the Jackson County circuit court against Hattie Watts (hereinafter called appellant), and George L. Birlew, executor of the estate of Amos B. Crandall (hereinafter called respondent). In its bill the Trust Company prayed that those parties be required to interplead and that the court determine which of those parties 'is entitled to receive payment' of the funds in the joint deposit in question. The cause was tried before the court without a jury. Judgment was rendered for respondent. Appellant took her appeal to the Kansas City Court of Appeals. That Court affirmed the lower court's judgment, 222 S.W.2d 937, but thereafter transferred the case to this Court. For reasons hereinafter stated we reverse the judgment entered in the circuit court.

The opinion of the Court of Appeals seems to correctly state the facts presented by the transcript. Appellant does not here contend the contrary. In the interest of brevity, and in view of our disposition of the case, it is not necessary to here fully restate the facts. Reference is made to the Court of Appeals opinion for other facts.

Amos B. Crandall was a locomotive engineer. He had no children. His wife had three sisters, Mrs. Birlew (wife of respondent), Mrs. Thayer and appellant. After Mrs. Crandall became ill in January, 1944, appellant, a nurse who lived in Topeka, Kansas, came to the Crandall home in Kansas City to help care for Mrs. Crandall. The latter died January 11, 1944. On February 21, 1944, Amos B. Crandall and appellant, Hattie Watts, went to Commerce Trust Company, in Kansas City, and opened a joint bank account in the names of both, payable to the survivor of them. In so doing they executed the following writing: 'Amos B. Crandall and Hattie Watts hereby agree each with the other and with Commerce Trust Company of Kansas City, Missouri, that all sums heretofore or hereafter deposited by them, or either of them, with said Trust Company to their credit as joint depositors, shall be owned by them jointly with right of survivorship, and be subject to the check or order or receipt of either of them, or the survivor of them, and payment thereof shall discharge said Trust Company from liability to either, or the heirs, executors, administrator or assigns of either. Each of the undersigned does hereby authorize the other to endorse his or her name on all checks or other evidences of indebtedness, and authorizes said Trust Company to cash or purchase such instruments upon such endorsements, and does further authorize said Trust Company to deposit in said joint account, with or without endorsement, all checks and drafts made payable to the undersigned or either of them. The signatures hereto are the duly authorized signatures for the payment of funds or the transaction of other business in connection with said account and the undersigned agree to the conditions printed on the reverse side hereof. (Authorized Signatures) /s/ Amos B. Crandall (A) /s/ Hattie Watts (B) Dated 2-21-44.'

The initial deposit of $600 (and later deposits of over $10,000) came from Crandall's funds. During Crandall's lifetime Mrs. Watts drew no checks on the account. Mr. Crandall kept the pass book in his possession. Out of the money in the joint account Crandall drew various sums, among them $3,700 to pay for a home which he gave to Mr. and Mrs. Birlew and $4,125 to purchase bonds. He gave respondent $2,000 in bonds. To Mrs. Birlew, Crandall gave $500 in bonds, and also left her $1,000 in insurance. To Thayer Birlew, son of respondent and wife, Crandall gave $750 in bonds. To appellant, Crandall gave $500 in bonds and left her $2,000 in insurance. At the time of Crandall's death (April 18, 1945) there was a little more than $1,600 in the account. Thereafter Mrs. Watts drew certain checks upon the account. The present balance in the account is $603.75.

Respondent's contention, as stated in his answer to the Trust Company's bill, was that the joint account was established by Crandall 'for the express purpose of convenience of the parties to pay obligations of Amos B. Crandall; that said Hattie Watts had no legal or equitable interest to the title of said funds.' He also prayed judgment for the $603.75. There is no allegation and no evidence of fraud, undue influence, mental incapacity or fiduciary relationship. Appellant's answer set out the above agreement of joint deposit, alleged her ownership of the bank balance in question, and prayed judgment therefor against the Trust Company. The trial court found that appellant Watts 'signed the authorization card at the request of Amos B. Crandall in order that she might be in a position to draw checks on the account for the accommodation of Crandall if he at any time was unable to do so; that it was not intended that defendant Hattie Watts should have any interest in said account and her only interest was that of being in a position to accommodate Amos B. Crandall in case of an emergency.'

In R.S.Mo.1939, Sec. 8070, Mo.R.S.A., it is, in part, provided, that: 'When a deposit (in a Trust Company) shall have been made by any person in the name of such depositor and another person and in form to be paid to either, or the survivor of them, such deposit thereupon and any additions thereto made, by either of such persons, upon the making thereof, shall become the property of such persons as joint tenants, and the same, together with all interest thereon, shall be held for the exclusive use of the persons so named, and may be paid to either during the life time of both, or to the survivor after the death of one of them.'

This case brings before us the admissibility, under these circumstances, of certain parol evidence from which we assume the trial court found the account was one of convenience 'in order that she (appellant) might be in a position to draw checks on the account for the accommodation of Crandall * * * (and) that it was not intended that defendant Hattie Watts should have any interest in said account.' Respondent contends that parol evidence is not admissible to contradict, vary, explain or show an intention of the parties other than that stated by them in their above set out written agreement of February 21, 1944. Thus there is squarely presented for our consideration under these facts and under our statute, supra, the legal effect of the written agreement executed when the account was opened.

Missouri courts recognize that joint tenancies with rights of survivorship may be created in bank accounts. Mississippi Valley Trust Co. v. Smith, 320 Mo. 989, 9 S.W.2d 58, 63, Clevidence v. Mercantile Home Bank & Trust Co., 355 Mo. 904, 199 S.W.2d 1, Ballman v. Kaimann, Mo.Sup., 229 S.W.2d 527, Bunker v. Fidelity Nat. Bank & Trust Co., 335 Mo. 305, 73 S.W.2d 242, Ball v. Mercantile Trust Co., 220 Mo.App. 1165, 297 S.W. 415. Our statute set out above fixes the interests of joint depositors as that of joint tenants and raises the 'presumption of an intent to make an immediate gift.' Ball v. Mercantile Trust Co., supra. See, also Beach v. Holland, 172 Or. 396, 142 P.2d 990, 149 A.L.R. 866 and cases cited in the annotation. That Crandall retained the bank pass book in his possession is not material. Both Crandall and appellant had the right to make withdrawals and the mere possession of the pass book is not determinative. Each of them had an equal right to the possession of the book. Beach v. Holland, supra, Illinois Trust and Savings Bank v. Van Vlack, 310 Ill. 185, 141 N.E. 546.

Conceding that the above deposit agreement was a valid contract between the depositors and the bank, respondent contends 'the parol evidence rule is inapplicable because the deposit agreement is neither a valid contract (as between the two depositors) nor a transfer of a present interest.' We cannot agree to that contention. Appellant acquired definite rights under a contract between competent parties. She was the beneficiary of the contract and is entitled to enforce it. Kansas City Life Ins. Co. v. Rainey, 353 Mo. 477, 182 S.W.2d 624, 155 A.L.R. 168. Such contracts are not solely for the protection of the bank. Under the circumstances here that writing did more than raise a mere presumption. It actually fixed the ownership of the account in the persons therein named (Crandall and Mrs. Watts) with attendant rights of survivorship. Annotation, 149 A.L.R. 879 et seq., In re Rehfeld's Estate, 198 Mich. 249, 164 N.W. 372. We do not find that this exact question of whether such a writing is a valid contract as between the depositors has been either raised or ruled in Missouri but there is eminent authority that these written joint deposit agreements are contractual in nature and effect and that each of the joint depositors who sign them acquire rights therefrom which the courts will enforce. Matthew v. Moncrief, 77 U.S.App.D.C. 221, 135 F.2d 645, 149 A.L.R. 856; Beach v. Holland, supra, Sage v. Flueck, 132 Ohio St. 377, 7 N.E.2d 802; Kennedy v. Kennedy, 169 Cal. 287, 146 Pa. 647, Ann.Cas.1916D, 515; 5 Zollmann, Banks and Banking, Perm.Ed., Sec. 3223, p. 244. We rule that this joint deposit agreement was a binding valid contract between the parties signatory thereto. The provision in the written contract of deposit which gave the appellant the unlimited right of withdrawal of the money in the account is donative in nature and evidenced the intention of Crandall to make a gift in praesenti. The contract itself supplies all the formalities necessary to render the gift...