In re Edwards' Estate

• Decision Date: 14 September 1932
• Citation: 14 P.2d 274,140 Or. 431
• Parties: In re EDWARDS' ESTATE. v. GORDON. AMERICAN NAT. BANK
• Court: Oregon Supreme Court

14 P.2d 274

140 Or. 431

In re EDWARDS' ESTATE.

AMERICAN NAT. BANK v. GORDON.

Supreme Court of Oregon

September 14, 1932

Department 2.

Appeal from Circuit Court, Multnomah County; George Tazwell, Judge.

Thornton Edwards died testate March 6, 1931, and his widow, Lillie B Edwards, was appointed executrix of his estate. To her final account, Keith A. Caldwell and Margaret J. Gordon being substituted as administrator and executrix, respectively, on the demise of Lillie B. Edwards, the American National Bank of Portland objected, on the ground that she had omitted a credit in that bank amounting to the sum of $1,444.22, and prayed for an order that she be compelled to include that deposit in her inventory. The circuit court (probate department) sustained the objections of the bank and ordered that the sum of $1,444.22 be deemed a part of the estate of the deceased. The executrix appealed.

Reversed.

John W. Kaste, of Portland, for appellant.

Keith A. Caldwell, of Portland, for respondent.

ROSSMAN J.

August 30, 1930, Thornton Edwards opened the aforementioned bank account with a deposit of $2,377.60. The account appeared upon the ledgers of the bank as "American National Bank Portland, Oregon. Name, Thornton and Lillie B. Edwards." The two individuals just mentioned were husband and wife and, at the time the account was opened, both subscribed their signatures to a card provided by the bank entitled "joint account," which recited: "The American National Bank of Portland accepts the joint account herein provided for under the following conditions, which are accepted by the undersigned and constitute a contract between the bank and the depositors and/or each of them. Deposits entered herein are payable to either of the undersigned or the survivor, subject to the State laws governing joint accounts, and in case of the temporary closing of this account, you are hereby notified that a deposit thereafter by either is to be payable to either or the survivor, in case of the death of either, unless you are otherwise notified. Each depositor is the general agent of the other and in case of overdraft by either, or overpayment to either, said overdraft or overpayment having arisen by error, mistake, inadvertence or otherwise, they are jointly and severally liable to the bank for said overdraft or overpayment."

Section 22-1407, Oregon Code 1930, provides: "When a deposit has been or shall hereafter be made in any bank or trust company in the name of two or more persons, payable to any of such persons, such deposit or any part thereof, or any interest, or dividend thereon, may be paid to any of said persons, whether the other be living or not, and the receipt or acquittance of the person so paid shall be valid and sufficient release and discharge of such corporation for any payment so made."

From the time that the account was opened with the original deposit of $2,377.60 until Thornton Edwards' death, about eight months later, $5,207.46 additional money was placed in the account in 18 different deposits. Prior to his death, $6,142.84 was withdrawn in various sums by checks signed by either Mr. or Mrs. Edwards, leaving the sum of $1,444.22 in the account at the time of Edwards' death. In the circuit court an effort was made, through the testimony of Mrs. Edwards, to prove that all of the money deposited came from Mrs. Edwards' own investments. She testified that when she and her husband came to Portland several years ago he had neither money nor property, but that she was possessed of a considerable estate. Some time after establishing their home in Portland, Mrs. Edwards acquired a parcel of real property in Portland, and in the early part of June, 1930, borrowed $2,500 upon the security of it. After paying the expenses incidental to this loan, a balance of $2,377.60 remained with which the aforementioned account was begun. Later, Mr. Edwards entered business and at that time withdrew $1,500. In October of 1930 he obtained from the American National Bank the loan of $1,500 which we have already mentioned, and at that time deposited that sum in the aforementioned joint bank account. Thus out of the total of $7,575.06 which entered that account, we have accounted for $3,877.60. The balance of $3,707.46 of deposits, the source of which we have not mentioned, is accounted for in the testimony of the wife in only a vague and uncertain manner. Possibly due to poor memory resulting from old age or to unfamiliarity with the details of the transactions, Mrs. Edwards, as a witness, experienced great difficulty in identifying deposits and withdrawals. Her testimony made frequent use of the words "assumed," "supposed," or "believed" as she endeavored to show that the deposit money came from her estate in New York or from properties which she owned in Portland. She surmised that Edwards' business was unprofitable, and therefore assumed that none of the deposits represented money earned by himself. Her testimony-and it was substantially the only evidence offered at the trial-was so uncertain that the circuit court was unconvinced. Without a further review of the testimony, we state our acquiescence in this portion of the court's decision. But there remains for disposition the question of what effect attached when the joint bank account was opened in the above manner.

It is certain that $2,377.60 of the wife's funds and $1,500 of the husband's money went into the bank account. It seems highly probable that other sums were deposited by each. The money withdrawn by the wife, according to her testimony, was in such small amounts as are ordinarily needed for the maintenance of a household. Edwards withdrew at one time $1,500 which he used for partnership purposes, and it seems altogether likely that he also withdrew other sums. At his death $1,444.22 remained in the account, but we cannot say whether that balance was an unused portion of the wife's $2,377.60, or whether all or a part of it constituted the balance of unexpended deposits made by the husband. The account was a commercial one, and the evidence does not disclose which of the parties possessed the pass book. It seems, however, that Thornton Edwards was the one who actually carried the deposits to the bank whether the funds were his own or those of his wife. It seems fair to assume that when he deposited his wife's money he was acting as her agent, and, therefore, had the custody of the passbook in her behalf. Apparently Edwards and his wife never had nor contemplated having any accounting of their individual interests in this bank account, and seemingly reposed the mutual trust and confidence in one another commonly displayed by husband and wife. The problem now presents itself whether the form of the deposits constituted the wife the owner of the credit of $1,444.22 when she withdrew that sum of money following Edwards' death. We add that the balance was withdrawn by her in 23 checks, covering six months' time.

The increasing use of joint bank accounts makes the problem before us one of general importance. The fact that upon the death of the husband a sum is at once available to discharge the expenses of the last illness and provide for household necessities, without court proceedings, has won for such accounts increasing favor. In fact, these accounts are regarded by people in modest circumstances as a poor man's will. Only an incidental phase of the problem has previously received attention by this court. Lipman Oil Co. v. Schwind, 132 Or. 381, 285 P. 1025. In that case we held that the mere fact that the account was in the joint names of husband and wife did not prove ownership in both. The problem now before us has been before numerous other courts. Excellent digests of many of the decisions may be found in 1 Paton's Digest, p. 301, § 1809, and in Brady's Banking Law Journal Digest, p. 146, §§ 354 and 355. See, also, the annotations in 48 A. L. R. 189, L. R. A. 1917C, 550, and Ann. Cas. 1916D, 519. In most of the cases mentioned or reviewed in the above compilations the accounts were of a savings character and the funds deposited belonged originally to only one of the parties. Thus the one party could generally be regarded as the donor and the claimant the donee. But in the present instance the two parties were, in fact, co-depositors, and whether the one deposited more than the other cannot be determined from the evidence.

Where the relationship of donor and donee was claimed, and the latter alleged a gift inter vivos, the courts have declined to recognize title in the survivor unless the gift was completed during the donor's lifetime by delivery of the passbook, which is generally regarded as symbolical of the chose in action. In those instances where a gift causa mortis was alleged the courts have insisted that the proof show that the donor anticipated death from an illness to which he was then subject when the delivery was made. An alleged power of agency on behalf of the donee generally is unavailing when he becomes the survivor because death revokes the power. In some instances the courts have sustained the claim of the alleged donee on the theory that a trust had been created in his behalf through the instrumentality of the joint bank account. The trust theory has been criticized because the courts employ it even when the evidence fails to show that the parties had any thought of creating a fiduciary relationship. And it is evident that the laws applicable to trusts must be discarded for all purposes other than the creation of the trust. In a number of instances where the relationship of husband and wife existed, with the account payable to the survivor, the courts have held that the joint bank account is held by the joint depositors as an estate by the entireties, and...