Wiggins v. Parson

• Decision Date: 02 February 1984
• Docket Number: Nos. 82-1008,82-1430,s. 82-1008
• Citation: 446 So.2d 169
• Parties: Josephine B. WIGGINS, etc., Appellant/Cross-Appellee, v. Olivia M. PARSON, Appellee, and Lillie H. Dudley and Lecil O. Howell, Appellees/Cross-Appellants.
• Court: Florida District Court of Appeals

Page 169

446 So.2d 169

Josephine B. WIGGINS, etc., Appellant/Cross-Appellee, v. Olivia M. PARSON, Appellee and Lillie H. Dudley and Lecil O. Howell, Appellees/Cross-Appellants.

Nos. 82-1008, 82-1430.

District Court of Appeal of Florida Fifth District.

Feb. 2, 1984.

Rehearing Denied March 6, 1984.

T. Michael Woods, Orlando, for appellant/cross-appellee.

Robert O. Marks, of Bornstein, Petree, Cooper & Marks, Orlando, for appellee Parson.

R. Barry Morgan, of Lawrence, Griffin & Landis, Orlando, for appellees/cross-appellants.

SHARP, Judge.

The issue in this case is whether the complete withdrawal of funds from a jointly-owned federal credit union account by one owner, who under the contract with the credit union ¹ and under our state's applicable law, ² had the right and the power to make withdrawals, terminated or severed the joint tenancy nature of the bank account so as to destroy the right of survivorship. The right of survivorship is an essential element of joint tenancy property. We think the better view is that a withdrawal and placement of the funds beyond the control of the other joint tenant in such a manner as to be inconsistent with continued joint possession and ownership severs the right of survivorship. The lower court ruled appellant failed to state a cause of action against appellees in this case because the claimant, Eva Broadhead, did not survive after the withdrawal was made. We reverse.

The pleadings disclose that in 1975 Effie Cooper used her funds to open a joint share account with right of survivorship in her name and her sister's, Eva Broadhead. In May of 1977 Cooper added the names of her sister, Olivia Parson and her brother, Lecil Howell. In November 1977, Cooper removed her name from the account, leaving as joint owners Parson, Howell, and Broadhead. Soon thereafter Parson withdrew all of the funds in the account and divided them into three equal parts. She kept one third and gave one third to Howell and one third to Lillie Dudley, another sister. There is no allegation Broadhead knew about the withdrawal, or that she agreed to the distribution of the funds to her siblings.

Cooper died in January 1978, and in July 1978, Broadhead died. The probate court administering Cooper's estate ruled that Cooper made a complete and valid gift to her siblings by opening the joint account and then removing her name from it. Appellant is Broadhead's personal representative, seeking to recover one third of the funds from Parson, Howell and Dudley. They admit they are currently holding the withdrawn funds.

This is a case of first impression in Florida, and we should look to other jurisdictions in determining how to best resolve it. The law on joint bank accounts is far from uniform, and as one judge described it, "the law relating to it has been in a state of morass, many of the cases which arise being treated very much on an ad hoc basis." ³

Some of the confusion in the case law arises from the fact that the key point in the decisions is whether there was a completed inter vivos gift of the joint interest in the bank account at the time the suit arose or before the joint owner died. ⁴ If it was a "convenience" account, or one where no inter vivos gift was intended, then the depositor-owner may withdraw the whole account and destroy the other joint owner's survivorship rights. See McGee v. St. Francois County Savings and Loan Association, 559 S.W.2d 184 (Mo.1977); Carroll v. Hahn, 498 S.W.2d 602 (Mo.App.1973). But if no present gift was intended, then the non-owner-depositor may not withdraw the whole of the account; and if he does so without the owner's consent, he is accountable or liable to the owner for all of the funds withdrawn. See Constance v. Constance, 366 So.2d 804 (Fla. 3d DCA), cert. denied, 376 So.2d 70 (Fla.1979). However, in this case it is clearly established that the owner-depositor of the credit union account, Cooper, made a completed inter vivos gift of the funds to her three siblings, Broadhead, Parson and Howell, when she removed her own name from the joint account in 1977.

Where there is a real joint tenancy account, and one joint tenant withdraws the full amount of the account or more than his moiety, and a death occurs before suit is brought to settle rights to the funds, the view espoused by most of the New York state courts is that the survivor takes all, whether the survivor happens to be the wrongful withdrawer, or the joint owner who did not withdraw the funds. ⁵ Other jurisdictions also follow this view. See Gatewood v. Griffin, 549 P.2d 829 (Okl.App.1976); State v. Gralewski's Estate, 176 Or. 448, 159 P.2d 211 (1945).

The rationale appears to be that one joint owner cannot rightfully withdraw more than his moiety, and if he does so, his act of withdrawal is a nullity, which does not destroy the right of survivorship. Will of Filfiley, 63 Misc.2d 824, 313 N.Y.S.2d 793 (N.Y.Surrogate's Ct.1970), aff'd, 43 A.D.2d 981, 353 N.Y.S.2d 400 (1974). Strangely, these same jurisdictions hold that a joint owner may withdraw his share and destroy the other's survivorship rights in it. ⁶

This view poses complications and problems. For example, if a joint tenant makes a series of withdrawals limited each time to his fractional interest, will he destroy the right of survivorship in the funds withdrawn? And, if survivorship continues in the funds, how far and how long does it stretch to reach the various funds and properties it may be later exchanged for or invested in? And in this case, will the survivor of the three original siblings, Parson or Howell, be able to claim the share of the account presently in Dudley's, Howell's or Parson's possession? It seems anomalous to say Broadhead lost her right to her share because she did not survive Parson and Howell, but Parson and Howell do not also hold their shares subject to the right of survivorship in the other. Finding a logical end to the floating right of survivorship is a problem with the New York rule.

A better view is that withdrawal of jointly-owned funds by a joint owner and placement of the funds in other persons' names, terminates the joint tenancy nature of the property and severs the right of survivorship as to the funds withdrawn. See Wright v. Commercial and Savings Bank, 51 Md.App. 398, 445 A.2d 30 (1982); Rose v. Hooper, 175 Neb. 645, 122 N.W.2d 753 (1963); In Re Estate of Ogier, 175 Neb. 883, 125 N.W.2d 68 (1963); Goc v. Goc, 134 N.J.Eq. 61, 33 A.2d 870 (1943); Hoffman v. Vetter, 117 Ohio App. 233, 24 Ohio Ops.2d, 192 N.E.2d 249 (1961); In Re Estate of Beniger, 449 Pa. 373, 296 A.2d 773 (1972); In Re Estate of Carson, 431 Pa. 311, 245 A.2d 859 (1968); Austin v. Summers, 237 S.C. 613, 118 S.E.2d 684 (1961). The withdrawing joint tenant is liable and accountable to the other joint owner for that person's share, but the intervening death of either does not alter the outcome. See Goc; In Re Manfredini's Estate, 13 N.J.Super. 258, 80 A.2d 445 (1951).

The rationale for the view that withdrawal severs the right of survivorship is patterned after the common law rules worked out for joint ownership of real property, although admittedly they are not strictly and fully applicable to intangibles such as a bank account. In the context of real property interests, there is nothing sacrosanct about the right of survivorship in joint tenancy. The act of one joint owner may, without the other's consent, transform the ownership from joint tenancy to tenancy in common, thereby destroying the survivorship component. 48A C.J.S. Joint Tenancy §§ 16, 17, 18 (1981).

An act which destroys one of the unities of the joint ownership is generally held to transform the ownership to tenancy in common. ⁷ In the context of joint accounts the withdrawal of all or some funds from the joint account, and the placement of such funds in an account in different names or in other property the other joint owner has no power or right of control over, destroys the unity of time, title, possession and interest. In Re Estate of Ogier. That is what happened in this case. The withdrawal severed the joint tenancy ownership of the account and transformed it into funds owned as tenants in common. See In Re Estate of Carson; Goc. Thereafter, survivorship was irrelevant in determining Broadhead's right to her moiety.

Although we have no direct Florida precedent to follow in this case regarding severance of the joint tenancy nature of a joint account upon withdrawal by one joint owner, the joint tenancy analysis is consistent with the case law in this state. Ownership of joint bank accounts with the right of survivorship is viewed as a kind of joint tenancy property interest. See Spark v. Canny, 88 So.2d 307 (Fla.1956); Crawford v. McGraw, 61 So.2d 484 (Fla.1952); Graham v. Ducote Federal Credit Union, 213 So.2d 603 (Fla. 1st DCA 1968); Maier v. Bean, 189 So.2d 380 (Fla. 2d DCA 1966). Where one joint tenant has the right and power, under the applicable statute and the contract documents which establish the account, to withdraw all or part of the funds, and it is established that there was a true joint ownership, Florida appellate decisions have held that severance and destruction of the right of survivorship occurs.

In Cape Coral Bank v. Kinney, 321 So.2d 597 (Fla. 2d DCA 1975), Mrs. Arrowood and Mrs. Kinney opened a joint ownership bank account, with right of survivorship. Mrs. Arrowood's guardian sought to withdraw the funds, and the federal savings and loan association tendered the funds into the court registry. Then Mrs. Arrowood died. The court held that the withdrawal severed Mrs. Kinney's survivorship rights. This case was modified by a later opinion which held that a guardian of an incompetent had no right or power to withdraw joint bank account funds unless they are needed to care for the ward. Drozinski v. Straub, 383 So.2d 301 (Fla. 2d DCA 1980). However, Drozinski has no bearing on this case because any of the siblings had the right...