Lovell v. Marianna Federal Sav. and Loan Ass'n

• Decision Date: 17 July 1978
• Docket Number: No. 77-289,No. 2,77-289,2
• Citation: Lovell v. Marianna Federal Sav. and Loan Ass'n, 568 S.W.2d 38, 264 Ark. 99 (Ark. 1978)
• Parties: Jimmy Lonnie LOVELL, Appellant, v. MARIANNA FEDERAL SAVINGS & LOAN ASSOCIATION and Ann Parker Lovell, Appellees
• Court: Arkansas Supreme Court

Page 38

568 S.W.2d 38

264 Ark. 99

Jimmy Lonnie LOVELL, Appellant, v. MARIANNA FEDERAL SAVINGS & LOAN ASSOCIATION and Ann Parker Lovell, Appellees.

No. 77-289.

Supreme Court of Arkansas, Division No. 2.

July 17, 1978.

Ray & Donovan, Marianna, for appellant.

Dane & Felton, Forrest City, Daggett, Daggett & Van Dover, Marianna, for appellees.

BYRD, Justice.

Prior to March 2, 1973, R. L. Lovell, deceased, deposited $36,000.00 with Marianna Federal Savings & Loan Association in the name of "R. L. Lovell or Ann P. Lovell." The certificates of deposits were issued and delivered to R. L. Lovell. Ann P. Lovell never saw the certificates although she had knowledge the accounts were in her name and her husband's name. The three certificates and ledger sheets evidencing the accounts had the account designation "R. L. Lovell or Ann P. Lovell."

On March 2, 1973, R. L. Lovell personally made known to Marianna Federal Savings & Loan his desire to terminate the joint account with Ann Lovell in the sum of $36,000.00 and to create a new account with right of survivorship between R. L. Lovell and Jimmy Lonnie Lovell. Imogene Eaton, Manager and Secretary-Treasurer of Marianna Federal Savings & Loan took the three certificates in question, placed them in a typewriter and struck the name Ann P. Lovell and typed in the notation "name change 3/2/73." Mrs. Eaton had R. L. Lovell to sign each of the certificates and then witnessed R. L. Lovell's signature by signing her own name as witness. The name of Jimmy Lonnie Lovell was added as joint tenant replacing the name of Ann P. Lovell which had been stricken. Mrs. Eaton pulled the ledger sheets that relate to each of the certificates, struck the name Ann P. Lovell and inserted the name Jimmy Lonnie Lovell and included the information "changed 3/2/73" and caused R. L. Lovell to initial each of the changed ledger sheets. The same sequence of events were performed upon each of the certificates and upon each of the ledger sheets.

Mrs. Eaton testified that the signature card was the binding agreement between the depositor and the institution. Mrs. Eaton also testified that she understood at that time that it was R. L. Lovell's intention to terminate his wife's interest in each of the altered accounts and to create a joint tenancy with the right of survivorship between Jimmy Lonnie Lovell and R. L. Lovell. Mrs. Eaton further testified that if the funds in dispute were determined by the court to be the property of Ann P. Lovell then her purpose in making the changes as well as the intention of R. L. Lovell, as she understood it, has been defeated.

On May 16, 1973, Mr. R. L. Lovell returned and requested that he be allowed to withdraw certain funds represented by the certificates because he had had a serious operation for cancer and his wife had left him. R. L. Lovell was allowed to withdraw $10,000.00 of the total of $66,000.00 at that time because of the emergency situation. Mrs. Eaton testified she recognized on May 16, 1973 that a problem existed concerning the ownership of the account but she did not so advise R. L. Lovell and took no action to correct the situation. At some undetermined date, Mr. R. L. Lovell notified his son, Jimmy Lonnie Lovell, that there were certain certificates of deposits in their joint names and that they were located in a safety deposit box held in their joint names also. Jimmy Lonnie Lovell never actually saw the certificates of deposits until after his father's death and had no knowledge of the transfer occurring on March 2, 1973 until after that date, but did have knowledge of such transfer long before R. L. Lovell's death.

Shortly after Mr. R. L. Lovell's death, Jimmy Lonnie Lovell took the certificates to Marianna Federal Savings & Loan, presented them to Imogene Eaton to liquidate but Mrs. Eaton refused to cash the certificates on the grounds that the maturity date had not expired. Mrs. Eaton was aware of Mr. R. L. Lovell's death at the time; she advised Jimmy Lovell that in order to withdraw the proceeds prior to maturity, there had to be an emergency and that the request to withdraw the proceeds had to go before the Board. She then called her attorney, who came and discussed the matter with Jimmy Lovell. No board meeting was held to consider any emergency situation.

Marianna Federal Savings & Loan thereafter, filed its bill of interpleader and tendered the certificates into the registry of the court naming Ann P. Lovell and Jimmy Lovell as defendants. Jimmy Lovell filed a counterclaim asking that the documents be reformed to comply with the known intention of R. L. Lovell, deceased, and alleged in the alternative, that if the funds were awarded to Ann P. Lovell that he was entitled to recover over from Marianna Federal Savings & Loan for their negligent acts in failing to fulfill or carry out the known intention of their depositor after having undertaken to do so.

The bank responded to the counterclaim of Jimmy Lovell by filing only a general denial. The trial court in disposing of the issues in a memorandum opinion ruled as follows:

"OWNERSHIP OF THE FUNDS: The Chancellor reaches the inescapable conclusion that Mrs. Lovell is the owner of the funds as surviving joint tenant. The account was opened as joint with right of survivorship. The attempt to extinguish that estate by manual alteration of the evidence of ownership was totally ineffective. Only by opening a new account in the manner provided by law could the new tenancy be created. This was not done. Likewise, only by physical withdrawal of the funds then in joint tenancy with Mrs. Lovell could the existing one be extinguished. This was not done.

Mrs. Lovell will be declared the owner of all impounded or interplead funds and accrued interest.

THE CROSS COMPLAINT AGAINST MARIANNA FEDERAL: Jimmy Lonnie Lovell cross complained asserting that the certificates should be reformed to conform to the intention of parties at the time and in the alternative that he be awarded damages for the loss of his expectancy resulting directly as a consequence of Mrs. Eaton's neglect. Though the Chancellor agrees with his arguments as to 'privily,' agency and liability of banking institutions for loss resulting from defective bill and notes executed by their executive officers in principle, there are facts and circumstances here present which make them inapplicable.

Ordinarily a married man may make an absolute transfer of personalty during marriage without the consent of his wife, she having only an inchoate right therein, provided of course, it is not done while she stands in the posture of 'creditor.' However, this rule applies only to absolute transfers during the lifetime of the husband. This right is not...