Maloy v. Stuttgart Memorial Hosp.

• Decision Date: 12 May 1993
• Docket Number: No. CA,CA
• Citation: 852 S.W.2d 819,42 Ark.App. 16
• Parties: Beulah I. MALOY, Appellant, v. STUTTGART MEMORIAL HOSPITAL, Appellee. 92-582.
• Court: Arkansas Court of Appeals

Page 819

852 S.W.2d 819

42 Ark.App. 16

Beulah I. MALOY, Appellant, v. STUTTGART MEMORIAL HOSPITAL, Appellee.

No. CA 92-582.

Court of Appeals of Arkansas En Banc.

May 12, 1993.

Robert Dittrich, Stuttgart, for appellant.

F. Wilson Bynum, Jr., Maxie G. Kizer, Keith B. Hall, Pine Bluff, for appellee.

JENNINGS, Chief Judge.

Stuttgart Memorial Hospital obtained a judgment against Mrs. Beulah Maloy for $7,700.00. On September 16, 1991, the hospital served a writ of garnishment on Farmers and Merchants Bank of Stuttgart, seeking to garnish two certificates of deposit totaling $8,600.00 held jointly by Mrs. Maloy and her mother, India Ola Glover. Mrs. Maloy filed a motion to quash the writ, alleging that the money represented by the certificates belonged solely to her mother. The court held a hearing on the motion.

Mrs. Glover testified that she was the mother of three children, Beulah Maloy, Bill Glover, and Leola Jolly. She said that she sold various items of personal property after her husband died in 1978. On the advice of a banker she put the money in certificates of deposit. She said she "tried to divide it evenly into the kids' names so if I went into a nursing home it would be the kids." Mrs. Glover testified that none of her children had ever taken any money from the certificates of deposit.

On cross-examination she stated that she had put her childrens' names on the certificates "to keep the money away from other people, if I go to a nursing home or something like that, because I had always heard that they can take your home or whatever money you have and I didn't want that to happen." She testified that she knew the children "could get [the money] right now if they want to," but that she trusted them not to do so.

Mrs. Glover's son, Billy, testified that Mrs. Glover had never told him the money was his and that he never considered the money to belong to anyone other than her.

Mrs. Maloy testified that the money represented by the certificates was her mother's and that she had never "exercised or evidenced any ownership or control" of the money during the past thirteen years.

On this evidence the trial judge, without comment, denied the motion to quash the writ of garnishment. The sole argument on appeal is that this was error. We find no error and affirm.

The leading case in this state on the garnishment of joint bank accounts is Hayden v. Gardner, 238 Ark. 351, 381 S.W.2d 752 (1964). In Hayden the supreme court adopted the view "that the joint account should be garnishable only in proportion to the debtor's ownership of the funds, as to which parol evidence is admissible to show the respective contributions of each depositor, as well as any intent of one to make a gift to the other." The court held that "all of the joint bank account was prima facie subject to garnishment, and that the burden was on each joint depositor to show what portion of the funds he or she actually owned."

It is true that certificates of deposit are subject to the same rules as other personal property when the question is whether a valid inter vivos gift has been made. Irvin v. Jones, 310 Ark. 114, 832 S.W.2d 827 (1992). When the question is whether a gift has been made, the donee has the burden of proving by clear and convincing evidence all of the elements of an inter vivos gift, including actual delivery. See Irvin, supra; Wright v. Union National Bank, 307 Ark. 301, 819 S.W.2d 698 (1991); Phipps v. Wilson, 251 Ark. 377, 472 S.W.2d 929 (1971). But these are cases where the alleged donee is seeking to establish a gift.

In the case at bar the hospital was not required to prove an inter vivos gift from Mrs. Glover to Mrs. Maloy. It was not necessary to do so in view of the holding in Hayden v. Gardner that the joint account was prima facie subject to garnishment; i.e., there is a presumption that the money is owned by the judgment debtor. The hospital was not obliged to prove actual delivery, nor any other element of an inter vivos gift. Instead, the burden was on the joint account holders to persuade the court that Mrs. Maloy did not own the money represented by the certificate of deposit. Hayden, supra.

In the case at bar all of the witnesses who testified had an interest in the outcome of the litigation--Mrs. Maloy and Mrs. Glover were parties. The trier of fact is not required to accept the testimony of an interested witness. See Jones v. State, 308 Ark. 555, 826 S.W.2d 233 (1992). The trial court may also accept portions of the witnesses' testimony and reject other portions. White v. State, 39 Ark.App. 52, 837 S.W.2d 479 (1992). Mrs. Glover's testimony that she intended to put the money beyond the reach of her own creditors supports the trial judge's decision. On the evidence presented we cannot say the trial court's decision was clearly erroneous.

Affirmed.

MAYFIELD, COOPER and ROGERS, JJ., dissent.

ROBBINS, J., concurs.

ROBBINS, Judge, concurring.

I fully concur with the prevailing opinion because it is consistent with case precedent which we are obliged to follow.

While it would have been well if the trial court had found the facts specially and stated separately its conclusions of law on which it held that the two certificates of deposit were subject to garnishment, it was not required to do so in the absence of a request pursuant to Ark.R.Civ.P. 52(a). We must presume, therefore, that the trial court acted properly and made such findings of fact as were necessary to support its judgment. Morgan v. Stocks, 197 Ark. 368, 122 S.W.2d 953 (1938).

I think it helpful to clearly state what was not before the trial court. It was not a dispute between two joint tenants competing for the funds of a joint account as was present in Irvin v. Jones, 310 Ark. 114, 832 S.W.2d 827 (1992). The case before the trial court involved the right of a judgment creditor of only one of two joint tenants to reach the joint funds by garnishment.

While there are different theories and views as to how the playing field should be arranged where the participants are so aligned, a discussion should be unnecessary because our Supreme Court has previously addressed the matter and adopted a set of rules. See Hayden v. Gardner, 238 Ark. 351, 381 S.W.2d 752 (1964). In Hayden the Supreme Court held that "all of the joint bank account was prima facie subject to garnishment" by a judgment creditor of one of the joint tenants, and "the burden was on each joint depositor to show what portion of the funds he or she actually owned." "Prima facie" simply means a fact presumed to be true unless disproved by evidence to the contrary. Black's Law Dictionary 1189 (6th ed. 1990), see also Ragland v. Gulf Oil Corp., 288 Ark. 182, 185, 703 S.W.2d 449, 452 (1986) and Country Pride v. Holly, 3 Ark.App. 216, 219, 624 S.W.2d 443, 445 (1981). To paraphrase, the entire joint account is presumed to belong to the judgment debtor for purposes of garnishment, and the burden is on the joint tenants to prove to the contrary. In fact the funds may have derived wholly from the joint tenant who is not the judgment debtor, and there may never have been any intent by that joint tenant to make a gift of any portion of the funds to the judgment debtor, much less any delivery. However, the joint tenants have the burden of proving such.

Although the dissent would place the burden of proof on the garnishing creditor, this is not the law. Without the presumption that a joint account belongs to the judgment debtor for purposes of garnishment, the possibility of using joint accounts to frustrate and hinder the collection efforts of judgment creditors is obvious.

Here, we must assume that the trial court did not believe the testimony given by the joint tenants. See Morgan v. Stocks, supra. Consequently, appellant and the judgment debtor failed to meet their burden of proof to show that the funds represented by the two certificates of deposit did not belong to the judgment debtor.

For these reasons and those set forth in the prevailing opinion, the trial court's decision should be affirmed.

MAYFIELD, Judge, dissenting.

By a three to three vote, this court has affirmed the trial court's decision in this case. I cannot agree with the prevailing opinion because I think the decision appealed from is clearly contrary to the preponderance of the evidence, and our decision ignores the doctrine of stare decisis by refusing to follow the law as announced by the Arkansas Supreme Court.

The prevailing opinion allows two certificates of deposit purchased by a mother to be subjected to garnishment to pay a debt owed by the mother's daughter. Under the undisputed evidence, the mother, on the advice of an officer of the bank, had purchased these certificates in her name and the name of her daughter. Citing Hayden v. Gardner, 238 Ark. 351, 381 S.W.2d 752 (1964), the prevailing opinion in the instant case holds that the bank's obligation to the joint owners of the certificates was prima facie subject to garnishment. Then, in one giant leap, the opinion holds that because the bank's obligation was prima facie subject to garnishment "there is a presumption that the money is owned by the [daughter]."

I think this reasoning is flawed in two respects. First, what Hayden v. Gardner (which involved a joint bank account) actually said was that the joint bank account was prima facie subject to garnishment and "the burden was on each joint depositor to show what portion of the funds he or she actually owned." 238 Ark. at 354, 381 S.W.2d at 754. In the instant case the undisputed evidence is that the mother, Mrs. Glover, sold various items of personal property after her husband died and that she purchased several certificates of deposit with that money. Mrs. Glover has one son and two daughters. One of the daughters lives in Texas. Another daughter and the son live in Arkansas. The only testimony in the case came from the mother and the son and daughter who live in Arkansas. They...