Madden v. Gosztonyi Savings & Trust Co.

• Decision Date: 30 June 1938
• Docket Number: 161
• Citation: 200 A. 624,331 Pa. 476
• Parties: Madden et al. v. Gosztonyi Savings and Trust Company, Appellant
• Court: Pennsylvania Supreme Court

200 A. 624

331 Pa. 476

Madden et al. v. Gosztonyi Savings and Trust Company, Appellant

No. 161

Supreme Court of Pennsylvania

June 30, 1938

Argued April 12, 1938

Appeal, No. 161, Jan. T., 1937, from judgment of C.P Northampton Co., Nov. T., 1935, No. 60, in case of Anna F. Madden et al. v. Gosztonyi Savings and Trust Company. Judgment reversed.

Assumpsit. Before STEWART, P.J.

The facts are as follows:

On May 29, 1928, husband and wife opened a savings account in their joint names with defendant bank. There was stamped on the face and inside of the savings passbook which plaintiffs received from defendant bank, the following:

"Bethlehem, So. Side, Pa., May 29, 1928.

"Joint Owners. Payable to either before or after the death of the other."

Plaintiffs deposited and withdrew from the bank account various sums of money at different times. On February 7, 1933, there was a balance of $6,012.18. Plaintiffs seek to recover this sum with interest thereon from February 7, 1933.

Defendant in its affidavit of defense admitted that plaintiffs as joint owners deposited and withdrew from the bank account various sums of money at different times but denied that plaintiffs' ownership in the account was as tenants by the entireties; it also admitted that on February 7, 1933, the balance in the account was $6,012.18. It set up, as "new matter," that on March 4, 1933, it suspended business and operated on a restrictive basis; that on April 6, 1934, in pursuance of the provisions of the Act of May 4, 1933, P.L. 271, plaintiffs entered into an "Agreement of Waiver and Release" wherein they waived 50% of the deposit and consented to the plan of reorganization therein set forth; that on December 17, 1934, Edgar J. Madden, one of the plaintiffs, as joint owner of the deposit, entered into a "Supplemental Agreement of Waiver and Release," in connection with the reorganization, wherein and whereby he released for the account of himself and his wife an additional 15% of their deposit; that on December 24, 1934, upon the completion of the reorganization of defendant bank, the unwaived portion of the deposit, $2,104.27, was made available to plaintiffs in accordance with the plans of reorganization; and that, in accordance with the reorganization plan, Edgar J. Madden, one of the plaintiffs, received and accepted from defendant bank the following:

Bank Book No. 1821 for $2,104.27, the amount of the deposit unwaived.

Stock Certificates Nos. 464 and F.521 for, respectively, 67 shares and 2727/3100ths shares of stock of the Gosztonyi Bank.

Participation Certificate No. 521 for $1,803.64 of Trusteed Assets.

Anna F. Madden, the wife-plaintiff, denied that she entered into or authorized any of the agreements of waiver. She averred that at no time did she consent to, approve of, or ratify the alleged reorganization plan. She also averred that at no time did she authorize her husband, Edgar J. Madden, to receive or accept the aforementioned bank book, stock certificates or participation certificate, nor did she at any time consent to or ratify the action of her husband; on the contrary, she claims that she disapproved such action.

After receipt of the Bank Book No. 1821 and stock certificates, the husband-plaintiff made a deposit of $25.16 in the account and withdrawals of $2,004.27, which the bank book evidenced, until only $125.16 remained in that account.

Without introducing any testimony in support of the allegations contained in the "new matter," defendant rested and made a motion for binding instructions. Plaintiffs thereupon moved the court to direct a verdict in their favor for the sum of $3,907.91, with interest from December 24, 1934, the amount being the difference between the $6,012.18 and the $2,104.27 which counsel for plaintiffs agreed should be deducted from the claim made. The trial judge directed a verdict for plaintiffs, and judgment was entered in the sum of $4,208.29. The bank appealed.

Errors assigned were refusal of motions for judgment n.o.v. and for a new trial, the direction of a verdict for plaintiff, and the entry of judgment.

Judgment reversed at cost of appellees.

Joseph S. Clark, Jr., of Dechert, Smith & Clark, with him H. P. McFadden, for appellant.

Russell C. Mauch, with him Milton J. Goodman, for appellees.

Before KEPHART, C.J., SCHAFFER, MAXEY, DREW, LINN, STERN and BARNES, JJ.

OPINION

MR. CHIEF JUSTICE KEPHART:

Appellees, husband and wife, sued to recover the balance of a savings account in appellant bank. This account had been in the name of both as "Joint Owners. Payable to either before or after the death of the other." The bank asserted that because of an "Agreement of Waiver and Release" executed by the husband for a substantial consideration during the reorganization of the bank, there was no longer any liability on the account. Appellees contended, however, and the trial court ruled, that, the deposit being held by the entireties, the wife's failure to join personally in this agreement rendered the release ineffective. Assigned as error is the failure of the court below to enter judgment n.o.v. for appellant bank.

Except for a few American jurisdictions, which by statute or otherwise have abandoned the common law, tenancies or estates by entireties are universally recognized as a traditional method of holding property. They have existed for centuries. ^[1] In this State they were first discussed elaborately in Johnson v. Hart, 6 W. & S. 319, and Fairchild v. Chastelleux, 1 Pa. 176. They undoubtedly became, with the bulk of the common law, part of the law of Pennsylvania.

The nature of estates by the entireties is generally well understood. They are simply a form of co-ownership, a particular type of "joint estate," held by husband and wife. At common law four main types of "joint estates" or co-ownership existed: joint tenancies, tenancies in common, coparcenary, and tenancies by entireties. Each had salient differences: Tiffany, Real Property (2d ed.), vol. 1, chapter VII, analyzes them fully. See also Tiedeman, Real Property (3d ed.), chapter IX. Joint tenants at common law hold the entire estate by the half and by the whole, per my et per tout. See Leach's Estate, 282 Pa. 545, 549. ^[2] Joint tenancies have four unities: interest, title, time and possession. We need not discuss fully the attributes of tenancy in common or coparcenary. See 1 Tiffany, Real Property 643. In some of these estates the owner may voluntarily alien or partition his portion, or it may be reached by creditors. See Davidson v. Heydon, 2 Yeates 459; Lessee of Simpson v. Ammons, 1 Binney 175.

Tenancies by the entireties, our major concern, resemble joint tenancies. All four of the unities are present. But as Blackstone says (page 182): ". . . if an estate in fee be given to a man and his wife, they are neither properly joint-tenants, nor tenants in common: for husband and wife being considered as one person in law, they cannot take the estate by moieties, but both are seised of the entirety, per tout, et non per my: the consequence of which is, that neither the husband nor the wife can dispose of any part without the assent of the other, but the whole must remain to the survivor." To the four unities of a joint tenancy therefore is added the unity of the husband and wife as a person in the law. Coke upon Littleton, section 291, in treating the subject of entireties, refers to the unity of husband and wife as the basis for the estate and relies on Bracton's maxim: "Man and wife are as one person, for they are one in flesh and blood." As a consequence of this relation many incidents flow therefrom quite different from those arising from a joint tenancy or any other form of co-ownership. While a tenancy by entireties resembles a common law joint tenancy in that each spouse owns the whole and therefore is entitled to enjoyment of the entirety and to survivorship, ^[3] it differs in that neither one has any individual portion which can be alienated or separated, or which can be reached by the creditors of either spouse. See Meyer's Estate (No. 1), 232 Pa. 89; Beihl v. Martin, 236 Pa. 519; Bostrom v. National Bank of McKeesport, 330 Pa. 65; Pennsylvania Trust Co. v. Mischik, 96 Pa.Super. 255. The existence of the estate depends on the marital relationship. At common law, one of the incidents which arose from this same relationship was the control exercised by the husband over the estate and its management. See Fairchild v. Chastelleux, supra, decided under the common law in 1845. Additional instances of the husband's control and the effect of the married women's acts, will be discussed later. Because of these important differences between tenancies by entireties and the other types of co-ownership, cases involving these other types ^[4] are unsatisfactory authorities in the solution of entireties problems; and, while in some jurisdictions statutes have been held to abolish the common law estate by entireties and the distinctions as above described, Pennsylvania has not done so.

Our several married women's acts have not disturbed this common law estate though they materially affected the incident of the husband's control. This was first decided in Diver v. Diver, 56 Pa. 106. It was there held that the unity of husband and wife was not destroyed by the Act of April 11, 1848, P.L. 536. Husband and wife could still hold by the entireties. See also Bates v. Seely, 46 Pa. 248. In McCurdy and Stevenson v. Canning, 64 Pa 39, we stated that, while prior to the Act of 1848 the husband had control of the estate during his life and might convey it and mortgage it for that period, the Act prevented the husband from doing so. See Gillan's Executors v. Dixon, 65 Pa. 395. The Act of June 3, 1887, P.L. 332, did not alter...