O'Hair v. O'Hair, 10907--PR

• Citation: 508 P.2d 66,109 Ariz. 236
• Decision Date: 22 March 1973
• Docket Number: No. 10907--PR,10907--PR
• Parties: Martha Kathryn Hazlett O'HAIR, Appellant, v. Huston Harding O'HAIR, Appellee. Huston Harding O'HAIR, Appellant, v. Martha Kathryn Hazlett O'HAIR, Appellee.
• Court: Arizona Supreme Court

Page 66

508 P.2d 66

109 Ariz. 236

Martha Kathryn Hazlett O'HAIR, Appellant, v. Huston Harding O'HAIR, Appellee.

Huston Harding O'HAIR, Appellant, v. Martha Kathryn Hazlett O'HAIR, Appellee.

No. 10907--PR.

Supreme Court of Arizona, In Banc.

March 22, 1973.

Rehearing Denied April 17, 1973.

Rawlins, Ellis, Burrus & Kiewit, by Norman D. Hall, Jr., Phoenix, for appellant-appellee.

Cavness, DeRose, Senner & Rood, by John W. Rood, Phoenix, for appellee-appellant.

STRUCKMEYER, Justice.

This action for divorce was brought by Martha Kathryn O'Hair, plaintiff in the lower court, against her husband, Huston Harding O'Hair. Judgment was entered in the Superior Court granting to plaintiff a divorce, but denying an award for alimony. The Judgment also disposed of certain property asserted to be the separate property of the husband, granted support for the two minor children of $100.00 a month each, and denied any support for an adult handicapped daughter. The Court of Appeals reversed, 16 Ariz.App. 565, 494 P.2d 765 (1972). Opinion of the Court of Appeals vacated. Judgment of the Superior Court affirmed.

The parties to this divorce action were married in 1947 in Phoenix, Arizona, and have been, until the filing of the decree of divorce on December 11, 1970, husband and wife. In 1965, defendant suffered a cerebral accident and has not been gainfully employed since, except insofar as he managed his business investments. In September of 1968, defendant had distributed to him, from the sale of the estate of his mother in Illinois, $203,715.11, of which he placed $150,000.00 in a savings account with the Western Savings and Loan Association in joint tenancy with right of survivorship. A signature card was executed so stating. Forty thousand dollars was placed in a certificate of time deposit with right of survivorship in the names of himself and plaintiff. Thereafter, both parties drew from the savings account, the plaintiff keeping possession of the passbook. Prior to the commencement of the divorce, the plaintiff wife made a withdrawal of $75,000.00 from the savings account and $25,000.00 held in their joint names under certificate of deposit. With these, on October 4, 1969, she established in the United Bank in Phoenix a revocable trust with herself as beneficiary.

The trial court found that the $100,000.00 was the separate property of the defendant and entered a judgment favorable to him, pursuant to the authority of A.R.S. § 25--318, providing that neither party shall be divested of his separate property in a divorce action.

It is settled in Arizona that where a person deposits money in a bank to the credit of himself and another, payable to the order of either, or the survivor of them, such deposit vests in the other a joint interest with the depositor in the fund. Any question as to the extent of the other's interest is determined from the intention of the depositor--whether a gift was intended or whether the joint tenancy transaction was entered into for other purposes. Saylor v. Southern Arizona Bank and Trust Company, 8 Ariz.App. 368, 446 P.2d 474 (1968); Phoenix Title & Trust v. King, 58 Ariz. 477, 121 P.2d 429 (1942); McNabb v. Fisher, 38 Ariz. 288, 299 P. 679 (1931). In this, Arizona follows the general rule in the United States where not otherwise changed by statute. See, e.g., Harrington v. Emmerman, 88 U.S.App.D.C. 23, 186 F.2d 757 (1950); Juraitis v. Andriulis, 318 Mass. 782, 64 N.E.2d 701 (1945); Erickson v. Kalman, 291 Minn. 41, 189 N.W.2d 381 (1971); Tucker v. Tucker, 252 Miss 344, 173 So.2d 405 (1965); Clabbey v. First National Bank, 320 S.W.2d 738 (Mo.App.1959); Esposito v. Palovick, 29 N.J.Super. 3, 101 A.2d 568 (1953); Laurent v. Williamsburgh Savings Bank, 28 Misc.2d 140, 137 N.Y.S.2d 750 (1954); In re Berzel's Estate, 101 N.W.2d 557 (N.D.1960); Wynne v. Wynne, 69 R.I. 229, 33 A.2d 173 (1943); Quesenberry v. Funk,203 Va. 619, 125 S.E.2d 869 (1962).

While as between the bank and the depositor the contract of deposit is conclusive, the mere form of the bank account is not regarded as sufficient to establish the intent of the depositor to give another a joint interest in or ownership of the deposit. Bolton v. Bolton, 306 Ill. 473, 138 N.E. 158 (1923); Ball v. Forbes, 314 Mass. 200, 49 N.E.2d 898 (1943); Hodgins v. Zabel, 7 Misc.2d 484, 166 N.Y.S.2d 135 (Sup.Ct.1957); Industrial Trust Co. v. Taylor, 69 R.I. 62, 30 A.2d 853 (1943). As the court said in Cashman v. Mason, 72 F.Supp. 487, 492 (D.Minn.1947):

'Joint accounts are a common method of handling funds in a bank as between husband and wife and others for mutual convenience and economy, but without necessarily intending to bestow any present interest in the fund on the one who is joined for the convenience of the owner of the moneys deposited.'

'(T)he intention of the depositor is controlling.' McNabb v. Fisher, supra, 38 Ariz. at 295, 299 P. at 681.

The trial court found that appellee 'did not intend at any time to change the character as sole and separate property of the funds which were deposited by him at Western Savings and Loan Association.' This finding is predicated at least in part on the testimony of the defendant:

On direct examination:

'Q Mr. O'Hair, when you established this account at Western Savings, for example, you put it in your joint names, is that correct?

A That is right.

Q Did you intend to give that money to your wife?

A No, I did not, sir.

Q What was your intention, why did you put both names, then, Mr. O'Hair?

A In the event something happened to me, * * * it would be easier for her to go up and draw some out to live on. Now, I am talking about in the event of my death.'

On cross examination:

'Q Well, you did ask her, though, Mr. O' Hair, to withdraw sums of money and put them in the Valley Bank checking account, didn't you?

A I said whatever was necessary for living expenses, and also--

Q Mr. O'Hair, looking at those records, isn't it true you didn't tell your wife she could not make withdrawals from that account? She could make withdrawals from that account at Western Savings whenever she wanted to, couldn't she?

A She could make withdrawals for household expenses.'

Defendant's testimony tends to suggest that this was their understanding. She was asked this question:

'Q * * * what I am asking you is what were the checks drawn on this particular account used for, for the most part?

A Living expenses.'

Both plaintiff and defendant made withdrawals from the account. Her withdrawals were usually deposited to the parties' joint checking account from which household and living expenses were paid. However, in September, 1969, a year after opening the account, Mrs. O'Hair withdrew the $75,000.00.

A bank account opened or carried in the name of two or more persons is in their joint custody. Joint custody of an account is a fact which, in itself, negatives any idea of a gift, In re Betts' Estate, 122 N.Y.S.2d 234, 235--236 (Sur.1953), since the essential element of a gift of personal property requires an intent on the part of the donor to divest himself of all dominion and control. In Rasmussen v. Oshkosh Savings & Loan Ass'n, 35 Wis.2d 605, 608, 151 N.W.2d 730, 732 (1967), the court, when speaking of a savings account placed in a wife's name, said:

'Gifts from a husband to his wife are not presumed from the marital relationship but are governed by the same rules as gifts between strangers, namely, there must be an intention to part with the interest in and dominion over the property and there must be delivery of the property.'

The essential elements of a gift inter vivos are that the donor manifest a clear intent to give to the party claiming as donee, and give to the latter before death, full possession and control of the property. Goff v. Guyton, 86 Ariz. 349, 346 P.2d 286 (1959). There must be a donative intent, delivery, and a vesting of irrevocable title upon such delivery. Armer v. Armer, 105 Ariz. 284, 463 P.2d 818 (1970).

We approve of the holding in In re Estate of Schneider, 6 Ill.2d 180, 127 N.E.2d 445 (1955), where the court first said:

'The familiar joint bank account has had an uneasy career in the courts because the relationships which it contemplates do not fit readily into common-law categories.' 6 Ill.2d at 183, 127 N.E.2d at 447.

Thereafter, the Illinois court examined many of the decisions in the State of Illinois and concluded concerning joint accounts as follows:

'To establish a gift, the proof must be clear and convincing, People v. Polhemus, 367 Ill. 185, 10 N.E.2d 966; Rothwell v. Taylor, 303 Ill. 226, 135 N.E. 419, and the burden is upon the alleged donee to establish the existence of a donative intent. Bolton v. Bolton, 306 Ill. 473, 138 N.E. 158. The decisions of this court relied on by appellant go no further than to indicate that the deposit agreement tends to show a donative intent on the part of the original owner of the funds, and that the intention so manifested, in the absence of contrary evidence, is sufficient to establish ownership in the survivor by virtue of the contract upon the death of the original owner. The form of the agreement, however, is not conclusive as to the intention of the depositors between themselves.' 6 Ill.2d at 187, 127 N.E.2d at 449. (Emphasis supplied.)

The testimony in this case is sufficient to support the trial court's finding that defendant did not intend to change the character of his funds which were deposited by him in the Western Savings and Loan as his sole and separate property.

No principles are better settled in Arizona than, first, that the duty of a reviewing court begins and ends with the inquiry whether the trial court had before it evidence which might reasonably support its action viewed in the light most favorable to sustaining the findings, and, second, that the reviewing court will not weigh conflicting evidence on appeal. Hollis v. Industrial Commission, 94 Ariz. 113, 382 P.2d 226 (1963); Nash v. Goor, 94 Ariz. 316, 383...