Johnson v. Sims
Decision Date | 14 November 1986 |
Citation | 501 So.2d 453 |
Parties | Dixie JOHNSON, as Executrix of the Estate of Comer Sims, and Dixie Johnson, Individually v. Roy SIMS and Joanna Greathouse, as Co-Executors of the Estate of Estha Sims, Deceased. 84-1311. |
Court | Alabama Supreme Court |
The original opinion is withdrawn and the following is substituted as the opinion of the Court.
This is an appeal from a judgment for defendants in plaintiff's action to determine ownership of certain certificates of deposit and other assets.
Between January 12, 1978, and January 12, 1982, J. Comer Sims purchased 16 certificates of deposit aggregating $59,406.18. J. Comer Sims died on November 15, 1982, survived by his widow, Estha Sims, and three children, Roy Sims, Dixie Sims Johnson, and Joanna Greathouse.
J. Comer Sims left a will which appointed Dixie Sims Johnson as executrix. After making certain specific bequests not in issue here, this will contained a residuary clause, viz.:
At the time of his death, the certificates of deposit were in a safe deposit box at the Enterprise Banking Company. Some of these certificates had been issued by that bank, while others had been issued by First Federal Savings and Loan Association of the Wiregrass ("First Federal"). All of the certificates of deposit in question had been issued in the names of "J. Comer Sims or Estha Sims or Dixie Sims Johnson," or a variation of these names, e.g., "Mr. or Mrs. Comer J. [sic] Sims or Dixie G. Sims."
Each issuing financial institution had an agreement with the persons so named in the form of a signature card, which J. Comer Sims, Mrs. J. Comer Sims, and Dixie S. Johnson executed. Written on the First Federal signature card were the numbers of the certificates of deposit issued by First Federal, and the card itself was issued as follows:
"A, Sims, Mr. Comer J. [sic] and B, Sims, Mrs. Comer J. [sic] and C, Johnson, Dixie, as joint tenants with right of survivorship and not as tenants in common, and not as tenants by the entirety."
The Enterprise Banking Company issued two signature cards. The first signature card was issued to "Mr. or Mrs. J.C. Sims" and was signed "J.C. Sims" and "Mrs. J.C. Sims." It contained the following clause:
This clause was followed by the signatures of "J.C. Sims" and "Mrs. J.C. Sims." This card referred to "Certificate No. 2685."
Another such card, identical to the one above except for the names and signatures of the depositors and the certificate numbers, was issued subsequently. It referred also to Certificate No. 2685, but additionally referred to No. 3081. It was made out to "Mr. or Mrs. J.C. Sims or Dixie S. Johnson" and was executed by each.
Following her husband's death, Mrs. Estha Sims removed all of the certificates in question and had new certificates issued to her individually. Mrs. Sims also made a new will devising all of her property to her children Roy and Joanna, but excluding Dixie. Roy and Joanna were also named as co-executors.
Mrs. Estha Sims died on October 29, 1983. Roy Sims subsequently resigned as co-executor, leaving Joanna as sole executor. Joanna took possession of her mother's properties and the funds represented by the certificates.
Dixie Sims Johnson brought this action in two counts. Count I prayed for a declaration that the funds in question were the property of plaintiff and prayed that First Federal and the Enterprise Banking Company be enjoined from allowing withdrawals from such accounts. Plaintiff also contended that a $6,000 checking account in the Enterprise Banking Company was a joint account among the three parties, and that her mother had added the sums therein to the new certificates of deposit in violation of Dixie's right to that account. Count II claimed specified items of personal property from Roy Sims and Joanna Sims Greathouse.
The defendants' motions to dismiss were overruled. All defendants answered. Summary judgment was ultimately granted on behalf of First Federal and the Enterprise Banking Company. Summary judgment was also granted in favor of Roy Sims in his capacity as co-executor, but denied as to him individually.
The trial court, sitting without a jury, tried the case and entered a final judgment holding that the certificates of deposit with First Federal and the Enterprise Banking Company at the time of J. Comer Sims's death "became the property of Estha Sims and not a part of the estate of Comer Sims." The court also held that "That certificate of deposit 5302063-5 for $5000 with [First Federal] and the $6000 in the Enterprise Banking Company are the property of the Estate of Estha Sims." Finally, the court rendered judgment for defendants in their individual capacities on Count II, finding a failure of proof.
The central issue for our review concerns the status of Dixie Johnson and Estha Sims as joint owners of the certificates of deposit after the death of Comer Sims.
There has been much confusion in the law on joint accounts. This Court has, at various times, applied the law of contracts, the law of gifts, and the law of joint tenancy to determine ownership of these accounts. Legislative action has added to the confusion.
For many years, this Court decided joint bank account ownership cases under a gift-law approach. The Court would look for donative intent and proper delivery, e.g., of a passbook. Where the depositor retained some control over the account, the requisite intent to make a gift would be found to be missing. The Court also, at times, applied a contract approach to joint accounts.
In 1945, the legislature enacted two statutes, most recently codified as §§ 5-1-24 and -25, Code 1975, governing survivorship interests in joint bank accounts. These statutes precluded any inquiry (except as to fraud or mistake) into donative intent or other elements of a gift and established a presumption of ownership in the survivor. The presumption was rebuttable by a written expression of a contrary intention.
In 1980, the legislature repealed §§ 5-1-24 and -25 and replaced them with a bank-protective statute, § 5-5A-41. The presumption of ownership in the survivor, found in the prior sections, was eliminated by the enactment of the new section. Lovett v. Uptain, 450 So.2d 116 (Ala.1984). Section 5-5A-41 does nothing to clarify the law governing ownership of funds on deposit in joint accounts. It exists only to protect the banks. The comments to this section state: In Parr v. Godwin, 463 So.2d 129 (Ala.1984), this Court, applying Code 1975, § 35-4-7, held that title to funds in a joint bank account set up after passage of § 5-5A-41 is to be determined according to the intentions of the parties as stated in the instrument which created the tenancy.
Jones v. Jones, 423 So.2d 205 (Ala.1982), involved a joint bank account established prior to 1980. The parties disagreed as to whether § 5-1-25 or § 5-5A-41 should govern. We held that the date on which the joint bank account is opened determines which statute applies.
There are separate rules which apply to joint accounts in savings and loan associations. In 1967, the legislature enacted a statute, now found at Code 1975, § 5-16-45, which governs the payment and ownership of jointly held funds on deposit in savings and loan associations. This Court first interpreted this statute in Street v. Hilburn, 295 Ala. 232, 326 So.2d 724 (1976), concluding that the intent and purpose behind this statute was to establish property rights in the survivor authorizing the payment of the account balance to him without a showing of either a donative intent on the part of the party furnishing the funds or delivery of the passbook or access thereto. Thus, the statute relieves the surviving joint tenant of the burden of establishing a gift inter vivos. Section 5-16-45 is substantially similar to the old bank statute, § 5-1-25, which precluded inquiry into donative intent. The savings and loan statute expressly applies to a deposit made in the names of more than two persons where there is a provision for survivorship. Nowhere, however, does it provide that any one survivor of the first decedent becomes the full owner of the sums on deposit simply by withdrawing the money; rather, the statute is silent as to the rights between or among two or more survivors.
In Hines v. Carr, 372 So.2d 13 (Ala.1979), one of the two survivors of the first to die among three joint owners of a savings account at a savings and loan association sought a declaratory judgment as to her interest in the deposits as against the other survivor. The trial court held that the funds were the equal property of both survivors. The other survivor appealed, claiming that the decedent had made an inter vivos gift of these deposits to her...
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