Robison v. Fickle, 2--1273A278

• Decision Date: 26 January 1976
• Docket Number: No. 2--1273A278,2--1273A278
• Court: Indiana Appellate Court
• Parties: , 18 UCC Rep.Serv. 1044 Martha E. ROBISON et al., Appellants, v. Frank C. FICKLE, as Executor of the Last Will and Testament of Lucy L. Wilson, Deceased, Appellee, and Frank C. Fickle et al., Appellees.

Page 824

340 N.E.2d 824

167 Ind.App. 651, 18 UCC Rep.Serv. 1044

Martha E. ROBISON et al., Appellants, v. Frank C. FICKLE, as Executor of the Last Will and Testament of Lucy L. Wilson, Deceased, Appellee and Frank C. Fickle et al., Appellees.

No. 2--1273A278.

Court of Appeals of Indiana, Second District.

Jan. 26, 1976.

Rehearing Denied Feb. 23, 1976.

Robert S. Justice, Logansport, for appellants.

Noel, Noel & Williams O'Mahoney, Mahoney, Simmons & Fleming, Kokomo, Davis & Davis, St. Louis, Mo., for appellees.

SULLIVAN, Judge.

The issues upon appeal concern conflicting ownership claims to certain intangible personal property held by decedent Lucy L. Wilson (Lucy) jointly with her niece Cynthia, and nephew Robert, respectively. The residuary legatees (hereinafter collectively, Robison) under decedent's will make claim to the property and the surviving joint tenants assert ownership of the property bearing their respective names. The property consists of 3896 shares of common Capital Stock of the General Motors Corporation, certificates of deposit issued by Union Bank and Trust Co. of Kokomo totalling $40,000.00 and a savings account in First Federal Savings and Loan Assn. of Kokomo totalling $118.75.

The Executor of Lucy's estate filed a declaratory judgment action seeking to resolve the conflicting ownership claims. The court entered summary judgment in favor of Cynthia and Robert, thereby upholding their respective claims as surviving joint tenants, and accompanied it with a comprehensive and scholarly opinion.

The issue which is dispositive may be broadly stated as follows:

(1) Whether there was a genuine issue as to a material fact so as to preclude the proper entry of a summary judgment.

In creating the broad issue, we are obliged to address ourselves to the component issues of law which the court below sought to resolve by its summary judgment, i.e., the nature of the interest held by Cynthia and Robert in the intangible personalty at the time of their Aunt Lucy's death, and various factors alleged by the residuary legatees to present a genuine issue as to the fact of Lucy's intent with respect to the property involved.

A recitation of the facts surrounding creation of the joint interests in the intangibles is necessary to place the material issues in perspective.

Lucy, a resident of Kokomo, died testate on January 14, 1972. Prior thereto, on August 5, 1971, Lucy instructed Union Bank & Trust Co. to reissue ¹ certain certificates of deposit, originally issued in her sole name, to decedent or Cynthia ($20,000) and to decedent or Robert ($20,000). The certificates bore the following words: 'as joint tenants with right of survivorship and not as tenants in common.' Decedent retained sole possession of the certificates. Robert and Cynthia were unaware of the transaction until after Lucy's death.

On January 7, 1970 and October 10, 1971, Lucy created three joint savings accounts with Cynthia at First Federal Savings and Loan Association of Kokomo. Cynthia executed the signature cards, as did Lucy. The signature cards bore the following language:

'It is agreed by the signatory parties with each other and by the parties with you that any funds placed in or added to the account by one of the parties, are and shall be conclusively intended to be a gift and delivery at that time of such funds to the other signatory party or parties to the extent of his or their pro rata interest in the account.'

Cynthia made no deposits or withdrawals. On the date of decedent's death, two of the accounts were exhausted. The remaining account had a balance of $118.75.

On December 3, 1971, at Lucy's direction, 3896 shares of General Motors common stock previously held in Lucy's sole name were reissued in the names of Lucy and Robert (2000 shares) and Lucy and Cynthia (1896 shares). Following the names on the face of the stock certificates was the abbreviation 'JT TEN', defined by printing upon the certificate as 'joint tenants with right of survivorship and not as tenants in common'. Lucy retained sole physical possession of the stock certificates. Robert and Cynthia were unaware of the transfer until following Lucy's death.

Lucy executed her last will on December 21, 1971. The provisions of the will disposed of her estate in a manner not inconsistent with her prior actions.

Upon appeal, the residuary legatees (Robison) assert that a material issue of fact existed. The question as presented is whether the court correctly found, as a matter of law, that Lucy had the requisite donative intent. More specifically, Robison asserts the following acts or statements as indicative of a non-donative intent and that certain other factors serve to defeat the claimed interests of Cynthia and Robert:

(1) Cynthia and Robert had no knowledge of the creation of joint tenancies in the certificates of deposit or in the General Motors stock until after Lucy's death.

(2) Lucy retained sole control of the property during her lifetime, keeping them in her safety deposit box.

(3) Lucy collected the income from such property during her lifetime.

(4) The provisions of the 'Uniform Stock Transfer Act' with respect to delivery were not met in Lucy's attempt to create a joint tenancy in General Motors' stock.

(5) The four unities of time, title, interest and possession requisite to valid creation of a joint tenancy are not all present, particularly as to the certificates of deposit since the names of Cynthia and Robert were merely added to already existing certificates.

(6) Lucy stated in creating the joint tenancies in the certificates of deposit that 'she wished (them) issued in such a way that upon her death they would be payable to her niece and nephew . . ..' The residuary legatees contend that such was an invalid substitute for a testamentary disposition.

I

PAROL EVIDENCE IMPLICATIONS OF IN RE ESTATE OF FANNING NOT

APPLICABLE WHEN DONATIVE INTENT IS FIXED BY CLEAR

WORDS, INTENTIONALLY USED, AND NOT

SUBJECT TO MORE THAN ONE

REASONABLE INTERPRETATION

At the outset, it is necessary to state in the light of the law as presently extant, that the dispositive issue as posed by the parties is not completely adequate for resolution of this cause.

Following the briefing and oral argument of this appeal, the Indiana Supreme Court in Seavey v. Fanning (In re Estate of Fanning) (1975), Ind., 333 N.E.2d 80 adopted the earlier opinion of the Court of Appeals which held that bank certificates of deposit issued in joint names 'payable to either of them with the right of survivorship and not as tenants in common' created a third party beneficiary contract. The court specifically rejected the delivery requirement essential to the 'gift' theory of Zehr v. Daykin (1972), 153 Ind.App. 537, 288 N.E.2d 174, as a basis for determining the validity of the claim of a surviving joint owner. In so doing, however, the Court stated:

'The intent of the donor-creditor is of paramount importance in a third party beneficiary contract. Voelkel v. Tohulka (1957), 236 Ind. 588, 141 N.E.2d 344. This unique contractual device, which has experienced considerable difficulty fitting into the common law theoretical molds, may serve several intentions. One intent may be to avoid any probation of the donor-creditor's estate. A second intent for the device might be for only temporary use during illness or absence from the State. A third intent may be to use the device as a security.

'Without an expression to the contrary, the third party donee-beneficiary contract creates a rebuttable presumption that the usual rights incident to jointly owned property with the right of survivorship was intended. Miles v. Hanten (1969), 83 S.D. 635, 164 N.W.2d 601. Also see I.C. 1971, 28--1--20--1, supra, and I.C. 1971, 28--4--4--2 (Burns Code Ed.). The burden of proof is upon the party two wishes to show a contrary intent from that expressed in the third party beneficiary contract.' 333 N.E.2d at 84--85.

The contract theory adopted in Fanning, supra, effectively eliminates the requirement of a delivery required under the gift theory. It is not an over-simplification to say, however, that 'the transaction is, in reality, a gift and that the contract is the substitute for delivery.' Kepner, The Joint & Survivorship Bank Account, 41 Cal.L.Rev. 596, 604. Fanning, does not, therefore obviate the necessity that the donor's intent be established. That donative intent is presumptively established by the use of words disclosing a joint tenancy relationship as opposed to a tenancy in common. This is not to say that a contestant may not, in some instances, offer evidence of the circumstances surrounding the creation of the joint tenancy in an attempt to rebut the presumption of intent. Yet, where the words of the contract are clear and unambiguous it would seem otherwise. Thus parol evidence concerning donative intent as arguably contemplated by Fanning, should be admitted only when the terms of the contract permit a reasonable construction which negatives the donative intent and the intent to create a right of survivorship in the entirety of the property. See Myers v. Maris (1975), Ind.App., 326 N.E.2d 577, 581; Fort Wayne Bank Building, Inc. v. Bank Building & Equipment Corp. of America (1974), Ind.App., 309 N.E.2d 464, 467.

The intention of the parties to a contract is always vital to an understanding of that contract and of the relationships and rights created. However, as stated in City of Indianapolis v. Kingsbury (1884), 101 Ind. 200, 213:

'. . . the intention to which Courts give heed is not an intention hidden in the mind of the landowner, but an intention manifested by his acts. It is the intention which finds expression in conduct and not that which is secreted in the heart of the owner, that the law regards. Acts indicate the intention, and upon the intention clearly expressed by open acts and visible conduct the public and individual citizens may act.'

Thus does the law hold one to...