Wood's Estate, Matter of

• Decision Date: 24 January 1976
• Docket Number: No. 47812,47812
• Citation: 218 Kan. 630,545 P.2d 307
• Parties: In the Matter of the ESTATE of James B. WOOD, Deceased. Robert V. WOOD et al., Appellants, v. Robert DAVIES, Individually and as Executor of the Estate of James B. Wood, Deceased, Appellee.
• Court: Kansas Supreme Court

Page 307

545 P.2d 307

218 Kan. 630

In the Matter of the ESTATE of James B. WOOD, Deceased.

Robert V. WOOD et al., Appellants, v. Robert DAVIES, Individually and as Executor of the Estate of

James B. Wood, Deceased, Appellee.

No. 47812.

Supreme Court of Kansas.

Jan. 24, 1976.

Syllabus by the Court

1. K.S.A. 58-501 provides that real or personal property granted or devised to two or more persons including a grant or devise to a husband and wife shall create in them a tenancy in common with respect to such property unless the language used in such grant or devise makes it clear that a joint tenancy was intended to be created.

2. In establishing a joint tenancy the all-important factor is the clarity with which the intent of the grantor is expressed at the time the transaction is initiated.

3. Where the 'magic' words used to create a joint tenancy are missing, and the written language used in the contract is uncertain or ambiguous as to whether joint ownership was intended, extrinsic evidence relating to the facts and circumstances existing prior to and contemporaneously with the execution of the written instrument is admissible in order to clarify the intention of the grantor at the time the written instrument was executed.

4. Where a surviving joint tenant has no knowledge of the creation of a joint tenancy estate, the surviving joint tenant is held to be a donee beneficiary resulting from the contract between grantor and the bank. Acceptance by the donee beneficiary is presumed.

5. Where ownership of three certificates of deposit is challenged, the record is examined on appeal and it is held: There was sufficient competent evidence to warrant the trial court's finding that the intent of the grantor was established with sufficient clarity to create a joint tenancy in the ownership of the three certificates of deposit.

Milo M. Unruh, of Arn, Mullins, Unruh, Kuhn & Wilson, Wichita, argued the cause and was on the brief for appellants.

Kerry E. McQueen, Liberal, argued the cause, and Michael P. Dreiling, Liberal, was with him on the brief for appellee.

SCHROEDER, Justice:

The question presented by this appeal is whether the trial court properly determined that three certificates of deposit, the subject of this action, were owned in joint tenancy.

The decedent, James B. 'Pete' Wood, left five surviving heirs and residuary legatees (plaintiffs-appellants) who brought this action against Robert Davies (defendant-appellee), individually and as executor of the estate of James B. Wood.

The decedent in his lifetime banked with the First National Bank of Liberal, Kansas, and at the time of his death in August of 1972 left three certificates of deposit in the bank, each carrying substantially the following legend:

'NAME James B. Wood or Robert Davies ADDRESS 715 N. Sherman, Liberal, Ks. HEREINAFTER REFERRED TO AS OWNER HAS DEPOSITIED IN THIS BANK Five thousand and 00/100 _ _ DOLLARS $5,000.00 Payable to said owner, or, if more than one, to either or any of said owners or the survivor or survivors upon presentation and surrender of this certificate properly endorsed. . . .'

These three CDs, issued in February 1971 and January 1972, were apparently reissues of previously matured CDs originally purchased by the decedent with his own funds. When the decedent first purchased the CDs, bank personnel pursuant to their general policy, explained that either party could cash the CDs or would own them after one party pre-deceased the other, which the decedent gruffly acknowledged he understood. When the CDs in question were reissued, the decedent and bank personnel had no conversation concerning the ownership of these CDs because it was customary to rewrite a CD the same way it was originally written.

The decedent, James B. Wood, was a rancher, a former Deputy United States Marshal, and a non-practicing attorney. Mr. Wood was well-known to the bank officers and personnel as a person with legal training. Robert Davies was a close family friend. The decedent and Davies had a checking account in their joint names, which was inventoried by Davies as an asset of the decedent's estate. Davies indicated he had an understanding with the decedent that the joint checking account was only for the decedent's convenience and conveyed no interest to Davies. Interest from the CDs was placed in this checking account but notice, 'interest advice' as it was called, was sent only to the decedent. At the time of the decedent's death the CDs were in the bank vault because the decedent had said he would be fiddling with them from time to time. However, Robert Davies further testified that the night the decedent and he discussed wills the decedent 'told me that I was taken care of down at the bank.' No specific disposition of these CDs is made in the decedent's will dated June 13, 1972.

The trial court excluded as irrelevant evidence from Russell Stoddard, president of the First National Bank of Liberal, concerning the bank's intention when it used the language quoted from the CDs. The appellee proffered evidence that it was the bank's intention, on advice from their counsel, to create a joint tenancy with right of survivorship by the use of the language employed on the CDs.

To create a joint tenancy K.S.A. 58-501 must be satisfied. It reads:

'Real or personal property granted or devised to two or more persons including a grant or devise to a husband and wife shall create in them a tenancy in common with respect to such property unless the language used in such grant or devise makes it clear that a joint tenancy was intended to be created . . .. Where joint tenancy is intended as above provided it may be created by:

'(a) Transfer to persons as joint tenants from an owner or a joint owner to himself and one or more persons as joint tenants;

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'. . . The provisions of this act shall apply to all estates in joint tenancy in either real or personal property heretofore or hereafter created . . ..'

In establishing a joint tenancy the all-important factor is the clarity with which the intent of the grnator is expressed at the time the transaction is initiated. (In re Estate of Matthews, 208 Kan. 492, 506, 493 P.2d 555; Winsor v. Powell, 209 Kan. 292, 299, 497 P.2d 292; and Pace v. First National Bank of Osawatomie, Kansas, 404 F.2d 52, 54 (10th Cir. 1968).) (See also, Annot., 43 A.L.R.3d 971, 989, § 4 (1972).)

Here the language employed in the CDs does not clearly establish a joint tenancy by using the 'magic' words 'as joint tnenants with right of survivorship, and not as tenants in common.' (In re Estate of Smith, 199 Kan. 89, 91, 93, 427 P.2d 443; Edwards v. Ledford, 201 Kan. 518, 524, 441 P.2d 834; Agrelius v. Mohesky, 208 Kan. 790, 792, 494 P.2d 1095; Johnson v. Capitol Federal Savings & Loan Assoc., 215 Kan. 286, 290, 524 P.2d 1127; and Eastman, Administrator v. Mendrick, 218 Kan 78, 542 P.2d 347. Standing alone, various phrases involving words of survivorship have consistently failed to clearly establish a joint tenancy under the case law. (In re Estate of Swingle, 178 Kan. 529, 530, 289 P.2d 778; Riggs v. Snell, 186 Kan. 355, 359, 350 P.2d 54, reh. denied, 186 Kan. 725, 352 P.2d 1056; Miller v. Higgins, 188 Kan. 736, 737, 366 P.2d 257; and In re Estate of Johnson, 202 Kan. 684, 695, 452 P.2d 286, modified, 203 Kan. 262, 452 P.2d 286.)

The language in this case appears to come from K.S.A. 9-1205, the Kansas banking statute, dealing with deposits and survivors. This statute reads:

'Deposits may be made in the names of two or more persons, including minors, payable to either or any of them, or payable to either or any of the survivors or the sole survivors, and such deposits or any part thereof or any interest thereon, may be paid to or on order of any of said persons whether the other or others be living or not; and the receipt, order, or acquittance of the person so paid shall be valid and sufficient release and discharge to the bank for any payment so made.'

Previous cases emphasize this statute is for the bank's protection in paying on 'joint' accounts. K.S.A. 9-1205 and its predecessors have nothing to do with the ownership of the funds as between two persons alleged to be joint tenants. (Malone v. Sullivan, 136 Kan. 193, 14 P.2d 647; Spark v. Brown, 167 Kan. 159, 163, 205 P.2d 938; Miller v. Higgins, supra at 739, 366 P.2d 257; Edwards v. Ledford, supra at 526, 441 P.2d 834; and Bowen, Administrator v. Hathaway, 202 Kan. 107, 113, 446 P.2d 723.)

Contract principles are controlling in joint tenancy cases. (In re Estate of Smith, supra at 93, 427 P.2d 443; In re Estate of Matthews, supra at 506, 493 P.2d 555; Winsor v. Powell, supra at 299, 497 P.2d 292; and Eastman, Administrator v. Mendrick, supra (Syl. 3).) Where, as here, the 'magic' words used to create a joint tenancy are missing, and the written language used in the contract is uncertain or ambiguous, extrinsic evidence is admissible to establish the intention of the parties. (Edwards v. Ledford, supra at 526, 441 P.2d 834; and In re Estate of Johnson, supra at 697, 452 P.2d 286.) (See also, Annot., 33 A.L.R.2d 569 (1954) and Annot., 42 A.L.R.2d 600 (1955).) Other jurisdictions concur and admit parol evidence when faced with ambiguous language concerning the ownership of certificates of deposit. (In re Estate of Fulk, 136 Ohio St. 233, 24 N.E.2d 1020 (1940); and Hendricks v. Grant County Bank, 379 P.2d 693 (Okla.1963).)

In admitting parol evidence the inquiry should be confined to the facts and circumstances existing prior to and contemporaneously with the execution of the contracts, since it is only the intention of the depositor at the time of the creation of the account that is material. (Simonich, Executrix v. Wilt, 197 Kan. 417, 424, 417 P.2d 139; and In re Estate of Matthews, supra at 503, 493 P.2d 555.)

After a thorough review of the record we cannot say the trial court erred in finding joint tenancy ownership of the certificates of deposit...