Nichols v. Wray

• Citation: 925 S.W.2d 785,325 Ark. 326
• Decision Date: 15 July 1996
• Docket Number: No. 95-1093,95-1093
• Parties: Dr. Patsy NICHOLS and Mary Alice Bell, Appellants, v. Shirley Bell WRAY, Appellee.
• Court: Supreme Court of Arkansas

Page 785

925 S.W.2d 785

325 Ark. 326

Dr. Patsy NICHOLS and Mary Alice Bell, Appellants, v. Shirley Bell WRAY, Appellee.

No. 95-1093.

Supreme Court of Arkansas.

July 15, 1996.

Davis & Goldie by Steven B. Davis, Harrison, for appellants.

James D. Sprott, Harrison, for appellee.

NEWBERN, Justice.

The late Eppa Sisco had three daughters, Dr. Patsy Nichols, Mary Alice Bell, and Shirley Bell Wray. Ms. Sisco's will purported to divide her estate equally among the daughters, and there was evidence that she expressed that intention often. After her husband's death, Ms. Sisco altered certificates of deposit by placing Ms. Wray's name on them as joint owner with the right of survivorship. Ms. Bell and Dr. Nichols sought reformation of the certificates or the imposition of a constructive trust for their benefit. The Chancellor did not rule on the reformation request and declined to impose a constructive trust, citing Ark.Code Ann. § 23-32-1005 (Repl.1994), as interpreted by Hall v. Superior Fed. Bank, 303 Ark. 125, 794 S.W.2d 611 (1990), which makes the terms of the certificates conclusive on the issue of the intent of the depositor. We are asked to overrule the Hall case, and we decline to do so.

The Chancellor did impose a constructive trust for the benefit of Dr. Nichols and Ms. Bell upon one parcel of land Ms. Sisco conveyed to Ms. Wray. That resulted from his finding that it was Ms. Sisco's intention to convey the land to Ms. Wray and thus avoid losing the property in the event she had to enter a nursing home and not to make a gift of it to Ms. Wray. Ms. Wray cross-appeals that part of the decision, and we affirm on cross-appeal.

In 1979, Ms. Sisco and her husband offered Ms. Wray a one-acre tract of land in exchange for her agreement to take care of them. She agreed, and the land was deeded to her. In 1983, they gave her another tract for the construction of a garage. Neither Dr. Nichols nor Ms. Bell objected to either of these gifts of real estate, and the Chancellor, finding that the transactions were intended as gifts, concluded there were no circumstances warranting the imposition of a constructive trust upon those properties.

In 1985, Mr. Sisco died. Ms. Sisco executed new signature cards on certificates of deposit naming Ms. Wray as Joint Tenant in place of Mr. Sisco. Over Ms. Wray's objection, Dr. Nichols testified that her mother told her Ms. Wray was included on the certificates because a bank employee said a "local person" was needed on the accounts. Both Dr. Nichols and Ms. Bell testified they were aware that Ms. Wray's name was on the accounts, and that they trusted her "judgment" regarding those funds. The Chancellor, as noted above, declined, on the basis of the Hall case, to consider any evidence of Ms. Sisco's intent regarding the certificates other than the documents themselves.

The next transaction occurred in January 1991, when Ms. Sisco deeded pasture land to Ms. Wray for the purpose of "squaring up" her property. The land was rented to farmers as pasture, and Ms. Wray collected the rent. The Chancellor did not find evidence sufficient to impose a constructive trust on that property.

The property upon which the Chancellor did impose a constructive trust was the last of the real estate transactions between Ms. Wray and Ms. Sisco in which Ms. Sisco, in 1994, conveyed the property on which her residence was located.

1. The CDs

The Chancellor's order stated that § 23-32-1005(2)(C) and the Hall case precluded him from considering, with respect to the certificates of deposit, the evidence presented by witnesses who testified that Ms. Sisco intended her three daughters to share equally in her estate. His order states:

As regards the joint accounts, there is no evidence of fraud, undue influence or misrepresentation or any other abuse of the familial trust which existed between the mother and the defendant [Ms. Wray], nor proof of a request from the defendant that the money be given to her. The daughter [Ms. Wray] is a natural object of the deceased's bounty and a person who had, for many years, lived next door and taken care of the deceased's needs to a greater extent than the other children, who lived elsewhere.

The order does not address the request that the certificates of deposit be reformed. The burden of obtaining a ruling upon that requested remedy was upon Ms. Nichols and Ms. Bell. As the Chancellor did not address it, and no objection was made to his failure to address it, we cannot say he erred in not reforming the instruments. Barnes v. Pearson Termite and Pest Control, Inc., 266 Ark. 635, 587 S.W.2d 823 (1979).

We note in passing that the mistake urged as a basis for reformation was allegedly between the bank and Ms. Sisco as to whether a "local person" had to be named joint tenant. We have not seen a case in which a person who is not a party to a contract has been allowed to obtain reformation of it. It has been held that one who is not a party may not obtain reformation. Shelter Mut. Ins. Co. v. LittleJim, 927 F.2d 1132 (10th Cir.1991). Cf. Hunt v. Century Indem. Co., 58 R.I. 336, 192 A. 799 (1937).

Section 23-32-1005(1)(A) addresses instances in which "a deposit has been made or a certificate of deposit purchased in the names of two (2) or more persons and in form to be paid to any of the persons so named, or the survivors of them." It is followed by subsection (2)(A) which states "the account or certificate of deposit ... shall be the property of those persons as joint tenants with right of survivorship," and then subsection (2)(C) which provides, in pertinent part:

(C) The opening of the account or the purchase of the certificate of deposit in this form shall be conclusive evidence in any action or proceeding to which ... the surviving party is a party of the intention of all of the parties to the account or certificate of deposit to vest title to the account or certificate of deposit, and the additions thereto, in such survivor.

In the Hall case we were confronted with a dispute over joint accounts held by a decedent and survivor in a bank and in a brokerage firm. There was strong evidence that the survivor's name was on the accounts only to assist the decedent and that she recognized her obligation to hold the proceeds for the beneficiaries named in the decedent's will. After pointing out that "We have not previously addressed the underlying question of whether in the absence of fraud, extrinsic evidence will be allowed to reflect the intent of the parties in establishing joint accounts with right of survivorship," we interpreted the statute as follows:

We find that the language of Ark.Code Ann. § 23-32-1005(2)(A) and (C) is clear; the opening of the account in the name of two or more persons designated as joint tenants or as joint tenants with right of survivorship "shall be conclusive evidence in any action or proceeding to which ... the surviving party is a party of the intention of all of the parties to the account...to vest title to the account...in such survivor." (Our emphasis.) The first rule to be applied in statutory construction is to give the words in the statute their usual and ordinary meaning. If there is no ambiguity we give a statute effect just as it reads. Pledger v. Ethyl Corp., 299 Ark. 100, 771 S.W.2d 24 (1989).

The statute declares that the establishment of the account as joint tenants provides conclusive evidence of the intention of all parties. The signature card for the Superior Federal account provided that Dorothy Edwards and Virginia Hall held the account as joint tenants with right of survivorship. Moreover, the signature card suffices to provide written designation to the bank that the account is held in joint tenancy. Therefore, the trial court erred in considering extrinsic evidence as to Dorothy Edwards' intent, and the funds in the account belong to ...