Eastman v. Mendrick

• Decision Date: 08 November 1975
• Docket Number: No. 47720,47720
• Parties: Robert L. EASTMAN, Administrator of the Estate of Margaret J. Gray, Deceased, Appellant, v. Hazel MENDRICK et al., Appellees.
• Court: Kansas Supreme Court

Page 347

542 P.2d 347

218 Kan. 78

Robert L. EASTMAN, Administrator of the Estate of Margaret

J. Gray, Deceased, Appellant, v. Hazel MENDRICK et al., Appellees.

No. 47720.

Supreme Court of Kansas.

Nov. 8, 1975.

Syllabus by the Court

1. Survivorship is the distinctive characteristic and the grand incident of an estate in joint tenancy. On the death of a joint tenant the property descends to the survivor or survivors and the right of survivorship terminates only when the entire estate, without the joint tenants having disposed of their title or otherwise terminating the tenancy, comes into the hands of the last survivor.

2. A surviving joint tenant of real or personal property does not take as a new acquisition under laws of intestate succession, but under the original conveyance, his estate merely being freed from participation of the other.

3. Whether a joint tenancy savings account in a bank or savings and loan association has been created between a depositor and another is to be determined on general contract principles. Where a depositor executes an instrument containing among its provisions an agreement in clear and unambiguous language that an estate in joint tenancy with rights of survivorship is intended, then such an estate is created and the agreement is enforceable according to its terms.

4. Where a savings and loan association signature card or certificate of deposit employs the so-called 'magic words' commonly regarded as creating a joint tenancy the intention is clear and unambiguous and parol evidence is inadmissible to vary its terms in the absence of fraud or mutual mistake on the part of the depositor and depositee.

5. A married person has the right to dispose of his personal property during his lifetime as he sees fit without regard to his spouse.

Robert L. Eastman, of Becker, Hildreth & Eastman, Coffeyville, argued the cause, and Roger L. Gossard, Coffeyville, was with him on the brief for the appellant.

Richard C. Dearth, of Jones & Dearth, Chartered, Parsons, argued the cause and was on the brief for the appellees.

KAUL, Justice:

The controversy in this case involves the joint tenancy ownership of savings accounts, United States Government Bonds, and preferred stock of a telephone corporation. The savings accounts and securities in question were owned by Margaret J. Gray, nee Stewart, deceased, and either her sister Hazel Mendrick or her brother Richard M. Stewart, as joint tenants.

Plaintiff-appellant, as administrator of Margaret's estate, filed an action seeking to recover a one-half interest in the several savings accounts and sixty shares of preferred stock originally issued by the Edna Telephone Company, which was succeeded by the Crawford Telephone Company. A pretrial order put in issue the ownership of the United States Government Bonds.

The issues below were resolved by summary judgment rendered in two parts at different stages of the litigation. The facts are essentially undisputed and the summary judgment is not challenged on procedural grounds.

The decedent, Margaret J. Gary, and Gordon Gray, her surviving spouse and sole heir-at-law, were married relatively late in their lifetimes. The marriage took place on September 6, 1951, and continued until Margaret's death on February 14, 1969. For the last seven or eight years of their marriage, Margaret and Gordon resided rent-free in a farm house near Edna, which was owned by Margaret's brother, the defendant Richard M. Stewart.

The undisputed evidence shows that although decedent and her husband got along well his financial contributions to the marriage were quite limited. In addition to the interest and dividends Margaret received from the accounts in question and the stocks and bonds involved in this action, Gordon had a little insurance money coming in and a small annual annuity of $50.00. They both received Social Security benefits. There was some testimony that Mr. Gray had become disabled by Parkinson's disease and apparently he died not long after Mrs. Gray.

Beginning in 1953, and at various dates thereafter during the Grays' marriage, the joint tenancy savings accounts in controversy were established in savings and loan associations in Parsons and Coffeyville, Kansas. These accounts were of two basic types. The first type consisted of conventional joint tenancy with survivorship savings accounts containing no trust provisions. The various signature cards or certificates of deposit for these accounts were either in the joint names of Margaret J. Gray or her brother, Richard M. Stewart, 'as joint tenants with right of survivorship and not as tenants in common,' or Margaret J. Gray or her sister, Hazel Mendrick, 'as joint tenants with right of survivorship and not as tenants in common.' The second type were joint trust savings accounts evidenced by signature cards or certificates of deposit set up in two names as trustees for a named beneficiary and signed by both trustees, indicating their capacity as such. Although the agreements on the signature cards were expressly made subject to certain trust provisions on the reverse side, the membership and savings account is expressly taken out in the joint names of the signatory trustees 'as joint tenants with right of survivorship and not as tenants in common.' The trust provisions give the trustees the power over the account:

'To withdraw and transfer the same in whole or in part, and to exercise full control over the participation value thereof as though the account were held absolutely free and discharged of any trust, . . .'

In resolving the issue presented here, the joint trustee accounts need not be considered any differently from the nontrust joint and survivor accounts. Plaintiff concedes the 'magic words' establishing joint tenancy were employed in each instance. In his brief, plaintiff does make a particular reference to the trustee accounts which will be discussed later herein.

The trial court first sustained defendants' motion for summary judgment with respect to the savings accounts and bonds. The journal entry in pertinent part reads:

'NOW ON THIS 30th day of April, 1973, the Court having received the briefs and written arguments of the parties and being fully advised in the premises finds that the surviving joint tenant of a bank or savings and loan account or U. S. Government Bonds obtains title under the contract creating the joint tenancy and upon the death of one joint tenant such accounts and bonds constitute no part of the assets of the estate, based upon an inter vivos action of the creator of the joint tenency; the incompetency of a joint tenant after establishment of the joint tenancy has no effect upon the ownership of the account after the death of the incompetent joint tenant and the record shows no adjudication of incompetency; a married person has an absolute right during his or her lifetime to convey or dispose of his or her personal property without the knowledge or consent of the spouse free from claim of the surviving spouse after death.

The Motion For Summary Judgment as to the joint tenancy savings accounts and loan accounts and as to the U. S. Bonds should be sustained and the remaining issues herein to be determined are the ownership of the telephone stock and certain personal property alleged to have been sold by the defendants.'

The record indicates that a hearing was had and some testimony submitted concerning ownership of the telephone stock. Judgment was rendered in this regard on July 1, 1974, to the effect that the stock certificates in question were in the possession of and owned by Richard M. Stewart.

Plaintiff specifies two points on appeal. In his first point plaintiff contends the judgment rendered on April 30, 1973, relating to the bonds and savings accounts is in error 'as it constitutes a fraud on the marital rights of the surviving spouse and does not protect the rights of the surviving spouse to one-half of the personal property held by the decedent at the time of death.' In his second point, plaintiff claims error in the same language with respect to the telephone stock.

In his brief plaintiff concedes that both points allege the same error and covers both in one argument. Plaintiff says there is one central issue on appeal and states it in these words:

'Does a married person have the power to contract by a colorable or illusory transfer, all assets standing in her name at the date of her death to the utter exclusion of her surviving spouse?'

Plaintiff has not reproduced a savings bond in the record, nor has he set out the precise language depicting the ownership of the bonds. In his brief, he says:

'Since all of Margaret Gray's assets were in some form of joint tenancy, these joint tenancy contracts, whether straight, trustee or bonds; perpetrated a fraud upon the marital rights of the surviving spouse. . . .'

In view of this statement and the content of record presented, we shall consider the issue concerning ownership of the bonds in the same context as that relating to the joint accounts.

The doctrine of joint tenancy and its application to personal as well as to real property has been recognized in this state for many years. (Malone v. Sullivan, 136 Kan. 193, 14 P.2d 647, and In re Estate of Biege, 183 Kan. 352, 327 P.2d 872, and cases cited therein.) From the many cases dealing with the doctrine certain rules have emerged which are presently recognized in this jurisdiction. Running through all of our cases, commencing with Simons v. McLain, 51 Kan. 153, 32 P. 919, is the concept that the grand incident of joint tenancy is survivorship, by which the entire tenancy, on the demise of any joint tenant, descends to the survivor or survivors and at length to the last survivor. This concept of joint tenancy was most recently stated in Johnson v. Capitol Federal Savings & Loan Assoc., 215 Kan. 286, 524 P.2d 1127, wherein we held:

'Survivorship is the distinctive characteristic and the grand...