Will and Estate of Strange, In re, 07-58715

• Decision Date: 13 September 1989
• Docket Number: No. 07-58715,07-58715
• Citation: 548 So.2d 1323
• Parties: In re WILL AND ESTATE OF Ernest Donald STRANGE, Deceased. William Morris STRANGE v. Tyna STRANGE, Executrix.
• Court: Mississippi Supreme Court

Page 1323

548 So.2d 1323

In re WILL AND ESTATE OF Ernest Donald STRANGE, Deceased.

William Morris STRANGE v. Tyna STRANGE, Executrix.

No. 07-58715.

Supreme Court of Mississippi.

Sept. 13, 1989.

T. Mark Sledge, Jackson, for appellant.

C.A. Henley, Jr., Jackson, for appellee.

Before ROY NOBLE LEE, C.J., and ANDERSON and BLASS, JJ.

ROY NOBLE LEE, Chief Justice, for the Court:

William Morris Strange has appealed from a judgment of the Chancery Court, First Judicial District, Hinds County, Mississippi, adjudicating that a purported joint account with Merrill Lynch created by Ernest Donald Strange in his lifetime in favor of William Morris Strange, his son, was the subject of an implied trust with William Morris Strange as trustee, and that the funds should be paid into the Estate of Ernest Donald Strange and distributed according to the provisions of his last will and testament, i.e., payment of claims and expenses and distribution of the residue to beneficiaries under the last will and testament of Mr. Strange.

Facts

Ernest Donald Strange was an attorney who had been employed as an Assistant U.S. Attorney for over twenty (20) years at the time of the events which are the subject of this appeal. He was married to Tyna Yates Strange, his third wife, and had three adult offspring by his first wife, i.e., Ernest Donald Strange, Jr., Carol Jean Strange Medlin, and William Morris Strange (Morris Strange).

On October 10, 1981, Strange opened a joint account with Merrill Lynch in his name and the name of his son Morris. ¹ Nine months after opening the joint account, on July 23, 1982, Don Strange executed a will which purported in Paragraph VI to dispose of the funds in the Merrill Lynch account:

I will, devise and bequeath to my wife, Tyna, and my son, William Morris Strange, and my daughter, Carol Jean Strange Medlin, to share and share alike, all savings and checking accounts that are in my name and all investments in my name and Morris' name at Merrill Lynch.

The parties agreed that, at all relevant times, Don Strange was fully capable of understanding the documents prepared and the transactions which occurred. Strange died on December 27, 1983. Tyna Strange, wife of the decedent, was named as executrix of her husband's will and she was assisted by Morris Strange in opening and administering the affairs of the estate. Shortly after the estate was opened, Morris Strange had the Merrill Lynch account changed to his name only and paid four thousand seven hundred fifty-one dollars ($4,751.00) (representing 1/3 of the value of the account), under the terms of Paragraph VI of the will, to Tyna Strange. He thought at the time that the law required him to give 1/3 of the value of the account to Tyna Strange and 1/3 to his sister, Carol Jean Strange Medlin.

Before distributing any money to his sister, he consulted a lawyer who advised that the money in the account belonged entirely to him because the account was set up in a joint tenancy with right of survivorship.

On March 25, 1985, Tyna Strange, executrix, filed a petition to pay all probated claims and other expenses, discharge executrix, and close the estate. The estate was insolvent and Tyna Strange requested the court to require that Morris Strange, Carol Jean Strange Medlin, and Tyna Strange, contribute equal sums to pay claims and costs of administration. Tyna Strange's testimony and appellate brief make it apparent that the Merrill Lynch account was the only funded account named in the will and that Tyna Strange wanted those funds put into the estate and wanted the bequests from the account abated proportionately as necessary to pay the claims and expenses of the estate.

Morris Strange answered Tyna Strange's petition denying responsibility for contributing funds and cross-claimed for reimbursement of the money he had paid to Tyna Strange from the account he held jointly with the decedent (or alternatively for "credit against any assessment of bills due and owning by the Estate.") Morris Strange's cross-claim asserted that the decedent had "opened a bond account at Merrill Lynch ... and established this account as a joint account with rights of survivorship with W. Morris Strange as evidenced by Exhibit "A" attached hereto." The exhibit was not included in the record on appeal. The case went to trial on May 22, 1987, in the Chancery Court of the First Judicial District of Hinds County.

There was no evidence adduced at trial to indicate that there was any lack of competence or legal capacity on the part of Strange at the time he set up the joint account. Nor was there any evidence (or even allegation) that his actions were the result of undue influence or duress. There was evidence that the marriage was turbulent and combative and that Strange had told Morris he was changing his will in response to pressure from his wife. Morris Strange testified that his father reported he had changed the will but that "it meant the same damn thing."

There was evidence that three other gifts were allowed to pass outside the estate: (1) insurance policies for $12,000 with Tyna Strange as beneficiary; (2) an insurance policy for $175,000 with the three children as beneficiaries; (3) a joint credit union account for $1,005.00 (not specifically named in the will) in the name of Tyna and Donald Strange, which Tyna withdrew and used to voluntarily retire some of the claims against the estate.

The chancellor entered judgment ordering the legatees under Paragraph VI of the will to pay the amount received from the Merrill Lynch account into the estate to be used for paying claims and expenses for administration of the estate. He ordered that any funds remaining after paying estate claims and expenses be divided equally in accordance with Paragraph VI of the will.

Law

The sole question on this appeal is whether or not the lower court committed reversible error in ruling that the joint account with rights of survivorship opened by the decedent, Ernest Donald Strange, in his name and that of his son, Morris Strange, was void due to the fact that the creation of the joint account did not meet the criteria for a valid inter vivos gift and thereby setting aside the creation of the joint account.

The parties have not cited, nor do we find, any Mississippi case dealing with the precise issue presented by this appeal, i.e., whether a testator can, by will, dispose of property which he placed, during his lifetime, in a validly created joint tenancy account with rights of survivorship. Joint accounts with survivorship provisions are widely relied upon as will substitutes along with other will substitutes such as life insurance, pension plans, etc. Therefore, the impact of today's decision is of great importance to the citizens of this state, as well as banking and commercial institutions.

The learned chancellor ruled that the question before him was whether the joint account created an inter vivos gift from Ernest Strange to Morris Strange, his son, or whether the decedent's will dated July 23, 1982, determined the ownership of said account. The chancellor based his decision on Carter v. State Mutual Federal Savings & Loan Ass'n, 498 So.2d 324 (Miss.1986). The chancellor stated in his opinion:

As stated in the Carter case, several requirements must be met in order to make a valid inter vivos gift, to-wit: (1) the donor must be competent to make the gift, (2) there must be a free and voluntary act by the donor with the intention to make a gift, (3) the gift must be complete with nothing left to be done, (4) there must be delivery by the donor and acceptance by the donee, and (5) the gift must be gratuitous and irrevocable. Going further, in defining delivery, the Supreme Court stated that to perfect delivery, the donor must surrender all dominion and interest in the property.

It is obvious that several of the above listed requirements had not been met, with emphasis being placed on the requirement of delivery and acceptance. Further emphasis is placed on the requirement that the gift must be gratuitous and irrevocable.

It is obvious to the Court that the Decedent continued to retain control over the account as would enable him to withdraw it for his own personal uses or purposes. By retaining such control, the transaction was ineffective as a gift and the deposit remained the property of the depositor.

This Court is unable to ascertain the Decedent's purpose in establishing the subject joint account, although it appears that he had done likewise using the same funds on previous occasions to establish one or more joint accounts bearing names other than that of Morris Strange. The fact that subsequent to the creation of this account, Decedent specificially made reference to the account in disposing of same in his will leads this Court to conclude that he never intended to comply with the above listed five requirements necessary to make a valid inter vivos gift.

Accordingly, this Court is of the opinion that an implied trust has been created, with Morris Strange acting as Trustee. The funds in question properly belong to the Estate of Donald Strange, Deceased, and a judgment will be entered ordering the Trustee, Morris Strange, to pay...