Coristo v. Twin City Bank

• Decision Date: 03 February 1975
• Docket Number: No. 74--183,74--183
• Citation: 520 S.W.2d 218,257 Ark. 554
• Parties: Iris CORISTO and Don Coristo, Appellants, v. The TWIN CITY BANK and Melvin L. Huffman, Individually and as Executor of theEstate of Gladys Clements, Deceased, Appellees.
• Court: Arkansas Supreme Court

Page 218

520 S.W.2d 218

257 Ark. 554

Iris CORISTO and Don Coristo, Appellants, v.The TWIN CITY BANK and Melvin L. Huffman, Individually and as Executor of theEstate of Gladys ClementsDeceased, Appellees.

No. 74--183.

Supreme Court of Arkansas.

Feb. 3, 1975.

Rehearing Denied April 14, 1975.

See522 S.W.2d 417.Ray & Donovan by Robert J. Donovan, Marianna, for appellants.

Wallace, Hilburn & Wilson, Ltd., by Zachary D. Wilson, North Little Rock, for Twin City Bank.

E. L. Schieffler and Harvey L. Yates, West Helena, for Melvin L. Huffman, individually, and as executor of the estate of Gladys Clements, deceased.

FOGLEMAN, Justice.

This appeal involves the question whether a certain bank savings passbook account designated as a joint account with right of survivorship could be withdrawn by one of the depositors.The chancery court held that it could, under the circumstances prevailing in this case.We agree.

The account had its inception in the deposit of $10,000 of the proceeds of a policy of life insurance of which Gladys Clements was the beneficiary.Mrs. Clements endorsed the insurance company check for $12,000 and turned it over to her daughter Iris Coristo, who took it to The Twin City Bank on November 7, 1969, and made the deposit, after having deposited $2,000 of the proceeds in her own checking account to apply toward the cost of adding a bedroom to the Coristo dwelling house to provide living quarters for Mrs. Clements.Mrs. Coristo took the signature card for the account to her home after having made the deposit.There Mrs. Clements and Mrs. Coristo's husband, Don, signed the card and it was returned to the bank.On the face of the card there were stamped these words:

Receipt is hereby acknowledged of Pass Book 49 Rules and Regulations, the terms of which are agreed to.

The account designation read, 'Gladys Clements or Don Coristo or Iris Coristo'.Upon this designation, of course, it was clear that any of the parties might have made withdrawals from the account unless a written notice restricting that right was given or unless the passbook terms prevented this being done.

Mrs. Clements did go to the bank on August 30, 1971, and withdraw the entire account and place it in an account designated as 'Mrs. Gladys Clements(only)'.On February 24, 1972, she executed a signature card endorsed 'Change my (savings) account to a joint account with right of suvivorship styled 'Gladys Clements or Melvin L. Huffman'.On that card the account designation was 'Gladys Clements or Melvin L. Huffman'.The bank changed the account as designated and assigned same number to it as that previously assigned to the joint account with the Coristos.The money was on deposit in this account when Mrs. Clements died.

Appellants assert four points for reversal.They are:

I

The trial court erred in refusing to enforce the contract between the joint depositors and the bank which required presentation of the passbook before the joint account could be withdrawn by either depositor.

II

The trial court erred by holding that the money in dispute was not a gift to Iris Coristo from Gladys Clements prior to November 7, 1969.

III

The trial court erred in failing to hold that the defendants were estopped by their contract to deny that the funds in dispute could not be withdrawn unless the passbook is presented.

IV

The trial court erred in not reforming the passbook by inserting the names of Don Coristo or Iris Coristo.

We shall treat them in order.

I

Appellants argue that Mrs. Clements had no right to withdraw the money in the first account without presenting the passbook.The evidence disclosed that this passbook was never out of the possession of Iris Coristo.The only evidence that it was ever seen by Mrs. Clements was the testimony of Mrs. Coristo that she showed it to her mother before putting it in the daughter's cedar chest.On the first page of the passbook, the name of the depositor was shown as 'Gladys Clements'.Directly following the name and address of the bank these words appear: 'This book must be presented when money is deposited or withdrawn.This account is not subject to check.'Appellants contend that these words are a part of the 'Rules and Regulations' to which Mrs. Clements agreed and that they constitute a contract among the bank and the individual joint holders of the account designated on the signature card.They rely heavily upon The Keokuk Savings Bank & Trust Co. v. Desvaux, 259 Iowa 387, 143 N.W.2d 296(1966);Welch v. North Hills Bank, 442 S.W.2d 98(Mo.App.1969);andBadders v. Peoples Trust Co., 236 Ind. 357, 140 N.E.2d 235, 62 A.L.R.2d 1103(1957).Assuming, without deciding that, as held in Badders, the passbook does constitute a contract between the depositors as well as between the depositors and the bank, we do not agree that this contract prevented the withdrawal made by Mrs. Clements.

The parties clearly agreed that they would be bound by the terms of the passbook rules and regulations.We do not consider the requirement that the passbook be presented to be a part of those rules and regulations.In the back of the passbook, rules are printed under the title 'Terms and Conditions Applicable to TCB Passbook 49 Savings Account'.These are numbered from one to ten.There is nothing whatever in these terms and conditions to prevent withdrawals without presentation of the passbook.The first is entitled 'Establish Accounts'.The next three relate to deposits.Only items five and seven have any bearing on this issue at all.Because we consider them as governing the question we reproduce them in full, viz:

5.WITHDRAWAL OF DEPOSITS

Funds on deposit during the entire 90 day period will be eligible for withdrawal without notice during the first ten days following the 90 day period and each subsequent 90 day period.Funds on deposit may also be withdrawn at other times upon not less than 90 days written notice to the bank signed by the depositor, designating the date on which withdrawal is to be made, in which case interest will be paid to the date of withdrawal stated in the notice.No interest will accrue on the funds to be withdrawn under a 'notice to withdraw' after the designated withdrawal date.Funds on deposit subject to a notice of withdrawal will not be eligible for withdrawal during the 10 days following the 90 day interest period.All withdrawals will be made only upon presentation by the depositor of appropriate account information and proper identification.

7.JOINT DEPOSITS

When two or more persons are named as depositors in form indicating that it is payable to any one of them, or the survivor or survivors of them, notice of redemption may be given to, payment of principal and interest may be made to, and notice of withdrawal may be signed by any one of the parties during the lifetime of all, or any survivor or survivors, after the death of one or more of them.

It will be readly seen that there is no requirement in these 'terms' that the passbook must be presented when a withdrawal was made by any of those otherwise authorized to make it.Furthermore, there is no reference to the statement on the first page of the passbook relating to its presentation.It is clear to us that these 'terms and conditions,' and not the statement on the first page of the passbook, constitute the 'terms' to which Mrs. Clements agreed and are the rules and regulations constituting the contract between the depositor and the bank.In this respect, this case differs from Keokuk Savings Bank & Trust Co. v. Desvaux, 259 Iowa 387, 143 N.W.2d 296(1966), where the requirement of presentation of the passbook was clearly a part of the rules of the bank assented to by the parties.If there was any doubt about the governing rule, it seems to have been dispelled by Bernice Orisini, operations officer at the bank.She testified that Item 7 quoted above was a part of the 'passbook' rules and regulations and that, while normal procedures of the bank were to ask for the passbook when a withdrawal was made, that the presentation of the book was not a binding requirement and a withdrawal without it was possible.Although she testified that everything in the passbook was a part of the rules and regulations of the bank, when asked by the court to state the purpose of the passbook requirement, Ms. Orsini explained that treatment of passbooks had undergone a change in banking, because before bank statements were rendered to depositors, the passbook was the only record of the account.She stated a withdrawal without the passbook was possible and one of the specific circumstances under which an account could be withdrawn without the passbook was a 'change of beneficiary'.

Appellants also rely heavily upon Welch v. North Hills Bank, 442 S.W.2d 98(Mo.App.1969);Badders v. Peoples Trust Co., 236 Ind. 357, 140 N.E.2d 235, 62 A.L.R.2d 1103(1957), andDavis v. Chittenden County Trust Co., 115 Vt. 349, 61 A.2d 553(1948).¹But in those cases neither the existence of a rule requiring presentation of the passbook for withdrawals nor its incorporation into the contract between the bank and the depositor was subject to question, as it is here.We deem the terms and conditions hereinabove quoted to be the only contractual terms relating to withdrawal.

It has been held that a requirement that the passbook be presented at the time of withdrawal is for identification of the depositor and for the convenience and protection of the bank and, as such, may be waived by the...