Estate of Allen

• Decision Date: 20 March 1980
• Citation: 488 Pa. 415,412 A.2d 833
• Parties: ESTATE of James ALLEN, Sr. Appeal of William B. ALLEN and Robert Allen.
• Court: Pennsylvania Supreme Court

Page 833

412 A.2d 833

488 Pa. 415

ESTATE of James ALLEN, Sr.

Appeal of William B. ALLEN and Robert Allen.

Supreme Court of Pennsylvania.

Argued Oct. 9, 1979.

Decided March 20, 1980.

[488 Pa. 419] Donald B. McCoy, Langhorne, for appellant.

Michael H. Egnal, Philadelphia, Rosemary M. Flannery, Norristown, Peter J. Verderame, Langhorne, Anthony L. Differ, Norristown, J. Russell Gibbons, Philadelphia, for appellees.

Before EAGEN, C. J., and O'BRIEN, ROBERTS, NIX, MANDERINO, LARSEN and FLAHERTY, JJ.

OPINION OF THE COURT

O'BRIEN, Justice.

This is an appeal from a decree entered in the Court of Common Pleas of Montgomery County, Orphans' Court Division, denying appellants' exceptions to the accounting judge's decree nisi in the estate of James Allen.

Decedent, James Allen, died testate on December 25, 1972, survived by his widow Ruth B. Allen and by three sons: Robert M. Allen and William B. Allen, appellants herein, and James Allen, Jr.

Decedent left a will, dated September 29, 1972, which, with the exception of certain specific legacies not here in controversy, disposed of his property as follows:

"FOURTH: I bequeath to my son, JAMES ALLEN, JR., the good will of my real estate business known as "Allen Brothers" . . ., along with the name, the stock in trade, fixtures, goods and effects belonging thereto and the benefit of all contracts subsisting in respect to said business, and all book debts and the Allen Brothers bank accounts except monies due me at the time of my decease and not drawn, upon his paying all debts, demands and liabilities due, or owing from or by me, in or in respect of said business. . . .

"FIFTH: Since the year 1968 I have made sundry and various transactions whereby James Allen, Jr. has received certain moneys and other property a record of which will be found among my books and records. So that all of my heirs and under my residuary clause shall receive equal shares, I direct that such advancements shall be taken into account and be deducted from his share of the residuary estate.

"SIXTH: All of the rest, residue and remainder of my estate, real personal or mixed, whatsoever kind and wheresoever situate of which I may die siezed or possessed, or to which I may be entitled at my death, I give, devise and bequeath as follows:

"a. One-third thereof to my wife, RUTH B. ALLEN . . . providing she survives me.

"b. The remainder thereof in equal one-third shares, to my Sons, JAMES ALLEN, JR., WILLIAM B. ALLEN and ROBERT M. ALLEN, per stirpes and not per capita, their heirs and assigns forever."

Named as executors were decedent's three sons.

On December 26, 1972, James Allen, Jr. filed a caveat to the will alleging lack of testamentary capacity and the exercise of undue influence upon testator by William B. Allen. A hearing was scheduled on said caveat, but in the event, an agreement was reached among the parties which was reflected in an order of court entered October 2, 1973, and which provided that the will be probated all save Paragraph FIFTH thereof and that testator's three sons be granted letters testamentary and proceed with the administration of the estate.

The three co-executors were, however, incapable of proceeding in this, their father's final charge to them, and after numerous delays and conferences, the Orphans' Court determined the administration of the estate could be facilitated, and a number of claims against the estate satisfied, only by the appointment of an auditor to state an account. An auditor was thus appointed on September 26, 1974; his account was filed on December 31, 1974, and came on for audit before the Orphans' Court on February 3, 1975. At that time numerous objections to the account were filed by the three co-executors, which came on for hearing on June 18 and 19, 1975. Also at that time a claim was filed against the estate in the amount of $857.68 for legal services provided testator during his lifetime. That claim was heard by the Orphans' Court on December 8, 1975, and ultimately approved and awarded.

The Orphans' Court issued and confirmed nisi its adjudication on September 23, 1976. Exceptions to the decree nisi were filed by appellants on October 4, 1976. ¹ On December 29, 1976, argument was held before the Orphans' Court on appellants' exceptions, and on January 14, 1977, the court en banc entered a final decree dismissing the exceptions. From that decree the instant appeal was taken. ²

Appellants advance nine assertions of error; we address these claims seriatim.

Initially, appellants urge upon us that the Orphans' Court erred in awarding a claim against the estate in the amount of $857.68 for legal services performed for testator during his lifetime.

We begin by noting that "a claim against a decedent's estate can be established and proved only by evidence which is clear, direct, precise and convincing." Petro v. Secary Estate, 403 Pa. 540, 543, 170 A.2d 325, 327 (1961). Accord: Carr Estate, 436 Pa. 47, 258 A.2d 628 (1969). It is also true, as appellants argue, that the burden of proof lies upon the claimant. Kenna Estate, 348 Pa. 214, 34 A.2d 617 (1943).

It is also true, however, that the findings of fact by the chancellor "have the weight and effect of a jury verdict and must be accepted at the appellate level unless such findings lack evidentiary support or unless the chancellor has capriciously disbelieved evidence or abused his discretion or committed an error of law." Smith Estate, 454 Pa. 534, 314 A.2d 21 (1974). Moreover, the record will be reviewed in the light most favorable to the appellee. Ziel Estate, 467 Pa. 531, 359 A.2d 728 (1976).

Instantly, the claimant introduced into evidence time sheets, properly authenticated and admissable under the Uniform Business Records as Evidence Act. ³ The record indicates that the time sheets so introduced reflected the performance of legal services on behalf of decedent for a period of over seven years prior to his death, forty-one and one-half hours of such services for which claimant had not been compensated. Appellant William B. Allen contested the claim and testified he did not believe claimant, in his capacity as attorney, had met with decedent prior to his death, and that claimant could not have met with decedent on several of the dates billed as a result of decedent's illness.

Appellant's claim is without merit. The properly introduced business records clearly show time expended by claimant on decedent's behalf. Moreover, it need be but stated that the performance of legal services does not require that attorney and client be in one another's presence. We perceive no error in the Orphans' Court's finding.

Next appellants argue the court below erred in excluding from decedent's estate the proceeds of two joint savings accounts. The facts germane to this issue are as follows:

In August, 1971, two bank accounts held in decedent's name were terminated and reopened as joint savings accounts in the names of decedent and James Allen, Jr. Account one was held at Fidelity Bank, Philadelphia. Account two was held at James Baird Savings and Loan Association, also in Philadelphia. On October 3, 1972, the Fidelity Bank joint account was terminated by James Allen, Jr. who, with the proceeds of that account opened a new account in his name alone. The issue presented in this appeal is the effect of this action on decedent's interests.

The Orphans' Court ruled that the creation of a joint savings account raised the presumption of a valid inter vivos gift, that appellants had failed to rebut the presumption so raised, and excluded the assets of both accounts from decedent's estate. While the reasoning of the Orphans' Court was correct as far as it went, we conclude it did not go far enough and find that the ruling of the court below was in error.

It is true that generally the creation of a joint bank account, with the right of survivorship, raises the presumption of a valid inter vivos gift. Dzierski Estate, 449 Pa. 285, 296 A.2d 716 (1972). And, also generally, the burden is upon the exceptant to demonstrate the absence of a gift. Treitinger Estate, 440 Pa. 616, 269 A.2d 497 (1970). Had testator in the instant case died while both his bank accounts were held jointly, the case would have turned upon the above-recited principles of law. But an additional fact present in the instant case shifts the focus of our inquiry. That additional fact is James Allen, Jr.'s withdrawal of the funds in the Fidelity Bank and their deposit in an account in his own name.

Appellants argue that the mere act of withdrawal serves to sever the joint tenancy and creates a tenancy in common, the obvious result being that upon testator's death his estate was entitled to one-half the assets of that account. We, however, rejected such a per se analysis in Beniger Estate, 449 Pa. 373, 296 A.2d 773 (1972). In its stead, proceeding from the presumption of valid inter vivos gift, we attempt to determine whether the power of a joint tenant to withdraw the funds has been "exercised in good faith for the mutual benefit of both . . . (or has been) . . . exercised by the fraudulent withdrawal of the corpus of the funds for the exclusive use of one for the purpose of depriving the other of any use thereof or title thereto." Berhalter v. Berhalter, 315 Pa. 225, 228, 173 A. 172, 173 (1934); Beniger Estate, supra, 449 Pa. 378, 296 A.2d 773. Moreover, "the bad faith requisite to severance of a joint tenancy will not be presumed on the basis of a withdrawal alone . . . ." Eyer Estate, 455 Pa. 369, 372, 317 A.2d 203, 204 (1974); Culhane's Estate, 334 Pa. 124, 5 A.2d 377 (1939). Rather, we review the record to determine if the action of the withdrawing tenant is in bad faith so as to terminate the conceptual unity of title which is one of the requisites of joint tenancy. Eyer Estate, supra.

The record in the instant case discloses that decedent had not been informed of nor did he consent to the withdrawal of the funds from the...