Matthew v. Moncrief

• Decision Date: 08 February 1943
• Docket Number: No. 8023.,8023.
• Citation: 135 F.2d 645
• Parties: MATTHEW et al. v. MONCRIEF et al.
• Court: U.S. Court of Appeals — District of Columbia Circuit

135 F.2d 645 (1943)

MATTHEW et al. v.MONCRIEF et al.

No. 8023.

United States Court of Appeals for the District of Columbia.

Decided February 8, 1943.

Mr. James Sherier, of Washington, D. C., submitted the case on the brief for appellants.

Messrs. Walter M. Bastian and Albert F. Adams, both of Washington, D. C., submitted the case on the brief for appellees.

Before GRONER, Chief Justice, and MILLER and VINSON, Associate Justices.

VINSON, Associate Justice.

This appeal pertains to a survivor's right in the proceeds of a joint savings account.The appellants, as brothers and sisters and heirs-at-law of Mary J. Davidson, deceased, instituted a suit to establish a trust in certain funds on deposit with the appelleePerpetual Building Association in the name of the appelleeLaura F. Moncrief, surviving owner of a joint savings account in the name of herself and the decedent.The appellees filed a motion to dismiss the complaint alleging, inter alia, that it contained no allegations entitling the appellants to relief.It is for us to determine the validity of the order of the District Court dismissing the complaint.

The complaint, in substance, was as follows: For some years, Mary J. Davidson had a large account on deposit with the Perpetual Building Association in the District of Columbia.On June 16, 1937, with an account approximating $7,260.00, she determined that her health would no longer permit her accustomed visits to the Building Association to draw on this fund.In consequence of her condition, she deemed it necessary to make provision for the periodic withdrawal of these funds by someone else.Having confidence in her sister Laura, the appellee, she selected her for this purpose, and the two women went together to the office of the Building Association.The Building Association supplied a printed form of joint account which was executed by each of them.The form contained a provision that Mary's account should belong to both Mary and appelleeas joint owners, subject to the order of either, with the balance at the death of either to the survivor.Although both women signed the instrument, it was understood between them at the time that the arrangement was only as a convenience to Mary, and that the appellee was to make withdrawals only as and when requested by Mary, and nothing more.Appellee so understood the purpose of the agreement and agreed to respect and perform Mary's wishes; she realized that the words of the joint account did not express the true intention of the parties.About six weeks thereafter Mary died.Her estate was duly probated in the District of Columbia.The account was not disposed of by her will.Eleven days after Mary's death, appellee converted the fund to her own use by having the account transferred to her name.As heirs-at-law of Mary, appellants contend that they are entitled to an equitable interest in the fund, which appellee has refused to share with them.

We do not consider that the allegations tending to indicate an incapacity in Mary J. Davidson to execute the joint account agreement are sufficient to present a valid issue.

The issue may be stated in this way: When two persons, whom we shall call the donor and the donee-survivor (whether or not their relationship always justifies this terminology), both sign a deposit card which purports to create a joint account subject to the demands of either, and upon the death of either to the survivor, may the written intention of the parties as expressed in that instrument be altered or destroyed by parol evidence except upon the grounds of fraud or mistake?

Although the donee-survivor's rights have been the subject of considerable controversy and conflicting decisions in other jurisdictions, the precise question has not been previously presented to this court.¹We feel compelled, therefore, to align the District of Columbia with those jurisdictions whose ratio decidendi we consider more consonant with logic, sound principle, and good public policy.

In giving careful study to a rather complete list of decisions, a reflective, analytical, and reconciliatory approach has convinced us that the lack of judicial harmony is largely superficial.This specious inconsistency results from a failure to differentiate the decisions factually.We find the following inquiries essential to a proper analysis:

I.Was the account created by the mere addition of the name of the donee to the deposit card, or was there also included written language which expressed an intention to create a joint account;

II.Was the deposit card or agreement establishing the joint account signed by the donor only, or by both donor and donee;

III.Did the instrument contain a survivorship clause;

IV.Were the donee-survivor's rights attacked on the basis (1) that the necessary mechanics to effectuate a completed gift were lacking, or (2) that there was no intention in the donor to create a joint interest or a gift, i.e., that the arrangement was merely one of convenience.

We have found eleven cases where the right of the donor's personal representative² to the fund has been upheld to the exclusion of the donee-survivor for the reason that the account was made only as an arrangement of convenience, as is the principal contention of the appellants here.Applying the criteria of the preceding paragraph, however, we note that in only one of these eleven decisions was the deposit card or the agreement establishing the joint account signed by the donee-survivor.³In this instance, the card contained neither language of joint account nor a survivorship clause.Ten decisions were concerned with deposit cards or arrangements for joint control which had been signed only by the donor.In seven of these ten cases, the accounts were created by the mere addition of the name of the donee to the account without the inclusion of any written words indicating a purpose to institute a joint account;⁴ only one deposit card contained a clause of survivorship.⁵Of the three remaining cases where the deposit card was signed by the donor only, the deposit cards did contain language of joint account, but one case is obviously distinguishable, as the bequest therein was testamentary and ineffective to pass any interest to the donee.⁶The remaining two cases reflect the law of a single jurisdiction, Maryland, which might be listed as an exception.In upholding the right of the donor's representative, however, the court was confronted, in both these cases, with extenuating circumstances such as the complete retention of the passbook by the donor in his lifetime, which was considered by the court as controlling, and a consistent practice in the donor, in creating his many accounts, to add an additional name for convenience,⁷ or the fact that the donor had previously erased the name of another, whom he had added as joint owner, to substitute the name of the donee.⁸

We feel, therefore, that these eleven authorities, while appearing to support the appellants' arguments, are really distinguishable on their facts from the instant case.The admission of parol evidence under the circumstances present in those decisions may very well have been permissible.The mere appending of the name of the donee to the account, without words expressing or showing an intention to create in that donee a joint interest or ownership, may not be an act of that unequivocal character which excludes extrinsic explanation.The donor may not have expressed his intention with that conclusiveness and unambiguity which preclude parol provisioning.

On the other side of the ledger, we have found twenty cases⁹ which have upheld the right of the donee-survivor to the fund.A generalization regarding the facts upon which these decisions were based stands in marked contrast with the factual description of the cases in the opposing column.Written words showing an intention to create a joint account were present in all but three of the cases,¹⁰ and a survivorship clause was included in all but five of the deposit arrangements.¹¹In only five of these twenty cases did both the donor and donee fail to sign the deposit card or the agreement establishing the joint account.¹²We think it highly significant that we could discover no case wherein both parties had signed an instrument which contained language of joint account and a survivorship clause, where the right of the donee-survivor to the fund was denied.In fact, to repeat ourselves, we have been able to find but one case in which both parties had signed the agreement of deposit where the right of the donee-survivor has been denied, and in that instance, the deposit card contained neither a survivorship clause nor words of joint account.¹³Thus, while the existence of a deposit card with language of joint account, and including a survivorship clause, and signed by both donor and donee, is not essential in order to obtain a ruling favorable to the donee-survivor, the presence of all of these factors makes that outcome more certain, just as the absence of one or more of them may render the donor's acts less equivocal and subject his written purpose to parol modification.

Although the allegation that the account might have been established only as an arrangement of convenience was considered in but three¹⁴ of the twenty cases holding for the donee-survivor, the forceful and final language employed in the opinions of the other cases made the absence of any such specific allegation immaterial.In many of these decisions, the expressed rationale has been that the deposit card is a contract or novation between the bank and both depositors, and that the donee-survivor takes not only as donee, but under the binding agreement negotiated between the bank and himself.¹⁵In other cases the transfer has been treated simply as a gift.¹⁶Under either view, however, the courts have agreed that the question of the intention of the donor is material, but they have held that when...