Estate of Kokjohn, Matter of, 93-1858

• Decision Date: 26 April 1995
• Docket Number: No. 93-1858,93-1858
• Citation: 531 N.W.2d 99
• Parties: In the Matter of the ESTATE OF Paul A. KOKJOHN, Deceased. Frank KOKJOHN, Jr., Richard Kokjohn, Agnes Moline, Larry Moline, and Dale Moline, Beneficiaries, Appellants, v. Marguerite HARRINGTON, Beneficiary, Appellee, Fort Madison Bank & Trust Co., Executor.
• Court: Iowa Supreme Court

Page 99

531 N.W.2d 99

In the Matter of the ESTATE OF Paul A. KOKJOHN, Deceased.

Frank KOKJOHN, Jr., Richard Kokjohn, Agnes Moline, Larry Moline, and Dale Moline, Beneficiaries, Appellants, v. Marguerite HARRINGTON, Beneficiary, Appellee, Fort Madison Bank & Trust Co., Executor.

No. 93-1858.

Supreme Court of Iowa.

April 26, 1995.

Gregory A. Johnson of Johnson & Skewes, Fort Madison, for appellants.

Robert A. Engberg and Brian J. Helling of Aspelmeier, Fisch, Power, Warner & Engberg, Burlington, for appellee.

Gary L. Hoyer of Saunders, Humphrey, Johnson & Hoyer, Fort Madison, for executor.

Considered en banc.

PER CURIAM.

The beneficiaries of decedent's will challenge a declaratory ruling finding a golden passbook account was not part of decedent's estate because it was held in joint tenancy by the decedent, Paul A. Kokjohn, and his sister, Marguerite Harrington. They contend: (1) the "time deposit, open account agreement" is not incorporated by reference on the signature card; (2) the parol evidence rule does not apply to exclude consideration of evidence extrinsic to the signature card and the "time deposit, open account agreement"; (3) decedent did not intend to create a joint tenancy account; and (4) if there was a contract, it is void due to mistake. We affirm.

I. Background.

On July 29, 1969, Paul A. Kokjohn opened a golden passbook account at the Fort Madison Bank & Trust Company. He and his sister, Bernice M. Moline, signed the signature card, which provided in part:

The undersigned and FORT MADISON BANK & TRUST COMPANY, Fort Madison, Iowa agree that the terms and conditions of the Time Deposit, Open Account Agreement as set forth in the passbook accompanying this account shall apply.

The time deposit, open account agreement provided in relevant part:

9. The balance in this account, if it be in two names, shall be owned by the depositors as joint tenants, and the balance in this account may then be paid to any one of such tenants or to the survivor.

The parties presented no direct evidence indicating Paul and Bernice received a passbook at the time they signed the signature card. However, an employee of the bank testified the bank's practice was to fill out the passbook and give it to the depositors after they signed the signature card. The passbook itself was not signed.

Bernice died in November 1977. Shortly thereafter, Bernice's name was crossed out on the signature card and Marguerite's name was added. At about the same time, Paul executed a will purporting to make any bank accounts held in joint tenancy part of his estate and claiming he held these accounts in joint tenancy for convenience only. The pertinent language of this testamentary disposition was as follows:

Any bank account or certificates of deposit which I might have in joint ownership with any other person shall be a part of my estate to be distributed in shares as above set out [distribution of estate to be equally divided between surviving siblings and heirs of deceased siblings] said joint ownership having been created by me for purposes of convenience only in case of my incapacity.

Paul died testate on June 30, 1992, leaving no surviving spouse. At the time of Paul's death the golden passbook account had a principal and accrued interest balance of $94,090.27. The executor of his estate filed this declaratory judgment action asking whether Paul's will could void the joint tenancy designation on three bank accounts, including the above-described golden passbook account. Only the golden passbook account's status is at issue in this appeal.

The district court concluded the golden passbook account's signature card and time deposit, open account agreement created a joint tenancy account. It also concluded Paul's death terminated his interest in the account. Consequently, the account could not be affected by Paul's will. It rejected the argument that the agreement was void due to mistake. The beneficiaries (all but Marguerite) now appeal.

II. The Doctrine of Incorporation by Reference.

We have not specifically addressed what is required for a contract to incorporate an extrinsic document by reference or how the incorporating contract should be interpreted. The Iowa cases that mention the doctrine of incorporation by reference in the context of general contract law do so without comment. See, e.g., Porter v. Iowa Power & Light Co., 217 N.W.2d 221, 228 (Iowa 1974) (court agreed trial court properly considered portions of contract incorporated by reference); Jefferson County v. Barton-Douglas Contractors, 282 N.W.2d 155, 157 (Iowa 1979) (court discussed construction contract incorporating by reference industry arbitration rules). We have discussed this doctrine, however, in the context of testamentary dispositions. See In re Estate of Safley, 193 N.W.2d 118, 120 (Iowa 1971).

Other jurisdictions have considered the doctrine of incorporation by reference outside of the testamentary context. See International Graphics, Inc. v. Bryant, 252 Ark. 1297, 482 S.W.2d 820, 821 (1972) ("Where a written contract refers to another instrument and makes the terms and conditions of such instrument a part of it, the two will be construed together as the agreement of the parties."); Batter Bldg. Materials Co. v. Kirschner, 142 Conn. 1, 110 A.2d 464, 468 (1954) ("Where ... the signatories execute a contract which refers to another instrument in such a manner as to establish that they intended to make the terms and conditions of that other instrument a part of their understanding, the two may be interpreted together as the agreement of the parties."); OBS Co. v. Pace Constr. Corp., 558 So.2d 404, 406 (Fla.1990) ("It is a generally accepted rule of contract law that, where a writing expressly refers to and sufficiently describes another document, that other document, or so much of it as is referred to, is to be interpreted as part of the writing."); Wilson v. Wilson, 217 Ill.App.3d 844, 160 Ill.Dec. 752, 577 N.E.2d 1323, 1329 (1991) ("For a contract to incorporate all or part of another document by reference, the reference must show an intention to incorporate the document and make it part of the contract."); Garrett v. State Farm Mut. Ins. Co., 112 Or.App. 539, 829 P.2d 713, 716 (1992) ("When a written contract refers in specific terms to another writing, the other writing is part of the contract."). The common thread throughout these cases is a requirement that the reference be clear and specific. We now adopt such a requirement.

We believe the signature card's reference to the open account agreement in this case is sufficiently clear and specific to allow incorporation of the latter agreement into the depositor's agreement of Paul and Bernice on July 29, 1969. In reaching this conclusion, we find from the evidence that the open account agreement that contains the language establishing the joint tenancy was delivered to the depositors contemporaneously with the signing of the signature cards. We have recognized that, when a deposit is evidenced by a bank book, delivery of the...