Williams v. Mallory

• Decision Date: 29 November 1978
• Docket Number: No. 76-455-E,76-455-E
• Citation: 284 Or. 397,587 P.2d 85
• Parties: Chester Emory WILLIAMS, Co-Personal Representative of the Estate of Charlotta C. Williams, Deceased, Respondent, v. Christine Williams MALLORY, Co-Personal Representative of the Estate of Charlotta C. Williams, Deceased, Appellant. ; SC 25460.
• Court: Oregon Supreme Court

Page 85

587 P.2d 85

284 Or. 397

Chester Emory WILLIAMS, Co-Personal Representative of the Estate of Charlotta C. Williams, Deceased, Respondent, v. Christine Williams MALLORY, Co-Personal Representative of

the Estate of Charlotta C. Williams, Deceased, Appellant.

No. 76-455-E; SC 25460.

Supreme Court of Oregon, Department 2.

Argued and Submitted Sept. 13, 1978.

Decided Nov. 29, 1978.

Gerald R. Pullen, Portland, argued the cause and filed a brief for appellant.

Robert D. Puckett, of Proctor & Puckett, Klamath Falls, argued the cause and filed a brief for respondent.

Before DENECKE, C. J., and TONGUE, BRYSON and LINDE, JJ.

BRYSON, Justice.

Plaintiff Chester Williams and defendant Christine Mallory are son and daughter of the deceased, Charlotta C. Williams, who died testate on May 11, 1975. The parties here are co-personal representatives of their mother's estate. Plaintiff brought this declaratory judgment proceeding to determine the interests of the parties in certain assets of the deceased.

The trial court decreed, inter alia,

"1. That the Savings Account No. 38927 with First Federal Savings and Loan Association of Klamath Falls, Oregon, wherein Charlotta C. Williams and Christine W. Mallory were named as joint depositors, is an asset of said estate."

Defendant Christine appeals only from the above portion of the decree. At the time of argument, both parties stated that the case was one in equity and was so tried. We agree and review de novo.

Plaintiff contends the funds in the savings and loan account are an asset of the estate through which he would receive one-half of the savings account under the terms of his mother's will.

Defendant contends the savings and loan account was established by the deceased mother and defendant as a joint tenancy with right of survivorship and not as tenants in common and, therefore, the funds in the account are hers as the survivor.

The deposit agreement was signed by Charlotta C. Williams and Christine W. Mallory on January 2, 1973, and provided:

"Williams, Charlotta C., or

Mallory, Christine W.

* * * as joint tenants with right of survivorship and not as tenants in common, and not as tenants by the entirety, the undersigned hereby apply for a savings account in

First Federal Savings and Loan Association of Klamath Falls

and for the issuance of evidence thereof in their joint names as aforesaid. You are directed to act pursuant to any one or more of the joint tenants' signatures, shown below, in any manner in connection with this account and, without limiting the generality of the foregoing, to pay, without any liability for such payment, to any one or the survivor or survivors at any time. This account may be pledged in whole or in part as security for any loan made by you to one or more of the undersigned. Any such pledge shall not operate to sever or terminate either in whole or in part the joint tenancy estate and relationship reflected in or established by this contract. 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 any one of the parties Are and shall be conclusively intended to be a gift and delivery at any time of such funds to the other signatory party or parties * * *. " (Emphasis in original.)

Before considering the facts of this case, it is necessary to discuss the law applicable to rights of survivorship in joint savings accounts. ¹ In the landmark case of Greenwood v. Beeson, 253 Or. 318, 454 P.2d 633 (1969), we agreed with the criticism that the law of joint savings accounts did not adequately reflect the intent of those who use the device and decided that we should "cut a new path in this field of the law." 253 Or. at 321-22, 454 P.2d at 635. Under the facts of Greenwood, the only issue raised was which party was entitled to the survivorship account while the donee and donor depositor were both living. In Greenwood we concluded that ordinarily the donor does not intend the donee to have a Present beneficial interest in the account, but a similar result is not required with respect to a Survivorship provision in the account. In other words, in Greenwood both signators to the joint account were living at the time of the litigation. In the case at bar, Charlotta C. Williams, deceased, deposited all of the funds to the account but was deceased at the time this litigation was filed.

We recognized in Greenwood v. Beeson, supra at 323-24, 454 P.2d at 636, that

" * * * the provision for a right of survivorship would, in most instances, express the intent of the parties. * * * Evidence should be freely admissible to show what the parties intended * * *. * * * (W)hen all of the funds in the account are deposited by only one of the signatories the recitation in the deposit agreement that the account is 'jointly owned' should not be treated as conclusively establishing the intent of the parties * * *."

Therefore, the depository agreement is evidence of the intent of the parties. To the same effect, See Allen v. Allen, 275 Or. 471, 478, 551 P.2d 459 (1976); Holbrook v. Hendricks' Estate, 175 Or. 159, 168, 152 P.2d 573 (1944).

In Greenwood v. Beeson, supra, we relied heavily on an article by Professor Richard Wellman on the legal problems created by joint savings accounts. Wellman, The Joint and Survivor Account in Michigan Progress Through Confusion, 63 Mich.L.Rev. 629 (1965). Wellman discusses the problem in the present case and stated the following on the issue before us:

"The opinions reflect the view that people who use joint and survivorship accounts usually intend the survivorship benefits they express. When such an account is intact at the donor depositor's death, the estate of the donor, if unable to show fraud, undue influence, or lack of capacity, will probably not prevail if all it can show is that a reason other than to confer benefits at death attended the opening of the account. Probably it must Also be shown that it would have been capricious or highly unusual for the decedent to have wanted the death benefits to go to the survivor in light of the decedent's circumstances, the pattern of his family relationships, and the terms of his other testamentary directions." (Emphasis in original.) Id. at 645-46.

There is no contention of fraud, undue influence or lack of capacity in the case at bar.

We believe that Professor Wellman's construction is sound and applicable to the facts in the case at bar. Therefore, we look to the evidence to find the intent of the parties at the time the account was established, and plaintiff has the burden of proving that the money in the joint savings account passed to the estate of Charlotta, as alleged in his complaint.

The evidence discloses that the deceased's husband, and father of the two parties to this proceeding, passed away in 1937, when all of the parties resided in Denver, Colorado. He had accumulated some real property and the deceased, Charlotta, took over and successfully operated their holdings. She was of strong character with an active and good mind for business. The deceased successfully managed the real estate and other assets of her husband and increased the value considerably. Her mind was sound until the time of her death. In 1966 deceased was badly injured and was afraid to live alone. She then moved to Klamath Falls and stayed with her daughter, the defendant. She conducted all of her business in Denver through her attorney of some years, Nathan H. Creamer, whose deposition was received in evidence. In 1972 deceased became upset when her son, plaintiff, was sued for divorce by his second wife, by whom he had three children. The son was preparing to marry a third woman who had three children by a previous marriage. At this time she decided to sell her corporate shares and mutual fund shares and transfer her liquid assets to Oregon. Her real property holdings were retained in Denver.

The best direct evidence of the deceased's intent in establishing the joint savings and loan account with right of survivorship in her daughter was provided by Richard Shuck, an accountant and tax consultant in Klamath Falls. Deceased had first met Mr. Shuck some time in 1960 and came to him for advice in June of 1971, after the divorce of Chester from his second wife. Shuck testified:

"A. She (decedent) says, 'How should I change my will to protect my grandchildren that my son has abandoned.'

" * * *.

"A. * * * Now, from her daughter, these grandchildren she knew were going to be well taken care of. * * * She told me that her son had abandoned her grandchildren in Denver. She wanted this property protected. * * * 'How should I make my will to protect where this money is going?' I told her, 'You do not have to change your will.' "

Shuck then explained to decedent that she could accomplish the desired result by using a survivorship savings account.

Decedent told Mr. Shuck she would talk the problem over with her lawyer in Denver, Colorado, Mr. Creamer. On January 2, 1973, the decedent opened the joint and survivor savings account with defendant, Christine, as above referred to.

At this approximate time the deceased and her two children had decided to construct a new commercial building on property deceased owned in Denver. The son, plaintiff, refused to sign any papers that would obligate him to repay for the loan necessary for the construction of the new building. The savings account involved here was used as security for a loan that defendant received from the First Federal Savings and Loan Association in Klamath Falls, the proceeds of which were used to pay for the construction of the new building in Denver, but the joint savings account here involved was not used to repay Christine's loan. The record shows that she made the monthly payments from income she received from real estate holdings her mother had given her. The plaintiff brother also received monthly payments from real property given him by...