Wright v. Bloom

• Decision Date: 20 July 1994
• Docket Number: 93-735,Nos. 93-640,s. 93-640
• Citation: 635 N.E.2d 31,69 Ohio St.3d 596
• Parties: WRIGHT et al., Appellees, v. BLOOM et al., Appellants.
• Court: Ohio Supreme Court

Page 596

69 Ohio St.3d 596

635 N.E.2d 31

WRIGHT et al., Appellees, v. BLOOM et al., Appellants.

Nos. 93-640, 93-735.

Supreme Court of Ohio.

Submitted April 20, 1994.

Decided July 20, 1994.

SYLLABUS BY THE COURT

1. The survivorship rights under a joint and survivorship account of the co-party or co-parties to the sums remaining on deposit at the death of the depositor may not be defeated by extrinsic evidence that the decedent did not intend to create in such surviving party or parties a present interest in the account during the decedent's lifetime.

2. The opening of a joint and survivorship account in the absence of fraud, duress, undue influence or lack of capacity on the part of the decedent is conclusive evidence of his or her intention to transfer to the surviving party or parties a survivorship interest in the balance remaining in the account at his or her death. (In re Estate of Thompson [1981], 66 Ohio St.2d 433, 20 O.O.3d 371, 423 N.E.2d 90, paragraph two of the syllabus, overruled.)

3. The opening of a joint or alternative account without a provision for survivorship shall be conclusive evidence, in the absence of fraud or mistake, of the depositor's intention not to transfer a survivorship interest to the joint or alternative party or parties in the balance of funds contributed by such depositor remaining in the account at his or her death. Such funds shall belong in such case exclusively to the depositor's estate, subject only to claims arising under other rules of law. (Bauman v. Walter [1953], 160 Ohio St. 273, 52 O.O. 172, 116 N.E.2d 435, overruled in part).

This is an action to determine the disposition of the money remaining in three joint accounts following the death of the depositor.

William C. Bloom died testate on August 30, 1983. Prior to his death, William transferred his personal bank and credit union accounts into three joint accounts with his brother, appellant Raymond Bloom. The signature cards on two of the accounts recited that the account is owned jointly, or payable to either, with rights of survivorship. The signature card on the third account, with TransOhio Savings Bank, indicates only that it is governed by "Account Rules and Regulations," which were not made part of the record.

In his last will and testament, William bequeathed specific sums of money to each appellee--Louise Wright, Gary Wright and William Evans. Raymond was appointed executor of his deceased brother's estate. The three accounts were not included in the inventory of the estate; the money from one of the accounts was transferred into a joint and survivorship account in the names of Raymond and his wife, appellant Gloria Bloom. There were insufficient estate assets with which to satisfy the specific monetary bequests to appellees.

On June 5, 1991, appellees filed a complaint for declaratory judgment in the Summit County Court of Common Pleas, Probate Division. The complaint sought a determination that the funds remaining in the three joint accounts at William's death belonged to his estate. Thereafter, appellees filed a motion for summary judgment. They argued that the "joint accounts were created as a matter of convenience in handling William Bloom's business affairs; that Raymond Bloom did not contribute any of his own funds to the accounts, and was forbidden from taking any funds out of the accounts for his own use; that William Bloom retained possession of the passbooks for the accounts until his death; and that Raymond's interest in the accounts did not vest until the death of William C. Bloom. Thus, it is clear that William C. Bloom did not intend to create a present, vested interest in the joint accounts in Raymond Bloom at the time the joint accounts were opened. Therefore, * * * the funds comprising the joint accounts are properly assets of The Estate of William C. Bloom and should be included in the inventory of said Estate."

The probate court granted appellees' motion for summary judgment, finding that where "a survivorship interest has been demonstrated but no present interest has been shown, the estate, as a matter of law, is entitled to proceeds of a joint and survivorship account."

The court of appeals affirmed the judgment of the probate court. The court found that although William and Raymond Bloom established "joint * * * accounts with the right of survivorship in Raymond's name * * * there was clear and convincing evidence that William had no intent to transfer a present interest in the funds to Raymond." The cause is now before this court pursuant to the allowance of a motion to certify the record. (Case No. 93-640.) In a subsequent journal entry, the court of appeals certified the record in this case to this court- pursuant to Section 3(B)(4), Article IV of the Ohio Constitution for review and final determination, finding that its decision was in conflict with that pronounced by the Eighth District Court of Appeals in Corrigan v. Coughlin (1983), 11 Ohio App.3d 176, 11 OBR 268, 463 N.E.2d 1258. (Case No. 93-735.)

Young & McDowall, Dean A. Young and Laura K. McDowall, Akron, for appellants.

L. James Harkins, Akron, for appellees.

ALICE ROBIE RESNICK, Justice.

The question certified "is whether the creator of a joint and survivor account must intend to transfer a present interest as well as a survivorship interest in the account to the other party named on the account."

The question certified is a facet of a broader issue which this court has endeavored to resolve since the early part of this century: How to stabilize the relationships of parties to joint and survivorship accounts. The joint and survivorship account is generally utilized by owners of choses in action either for financial convenience during their lives or as a non-probate device to dispose of their property at death while retaining some measure of control during their lives. Over the years, the court has sought to provide a clear statement as to the formal requisites and concomitant legal ramifications of opening a joint and survivorship account, particularly in regard to survivorship rights. Recent cases have created a morass of unpredictability, often occasioned by ambiguous and conflicting results. Presently, the depositor cannot rest assured as to whether the funds remaining in the account at his death will immediately pass to the survivor. Identical survivorship language expressly set forth in one joint and survivorship account agreement may be adjudged sufficient to pass ownership to the survivor while found to be insufficient in another. This has led to resolution of this issue on a case-by-case basis involving protracted litigation, time, and great expense.

This court first recognized the validity of the joint and survivorship account in Cleveland Trust Co. v. Scobie (1926), 114 Ohio St. 241, 151 N.E. 373. It was explained that "[v]iewing the transaction as a testamentary disposition, it of course lacks the requisites of a valid will; and viewing it as a gift, it may be questioned whether the delivery essential to constitute a completed gift was present." Id. at 246, 151 N.E. at 375. The court elected to give legal identity to such an account on the basis of contract law principles.

" * * * [U]pon deposit of an account the bank is constituted a debtor, and when the depositor orders the bank to pay himself or another upon order of either party, notifies the second party of the completed transaction and secures her signature evidencing assent to the arrangement, he has created in the second party by contract a joint interest in his right to the deposit equal to his own." Id. at 253, 151 N.E. at 377.

Under this view, the determinative question "is not whether [the depositor] made a gift of the fund in specie, but whether he created in [the other party] a joint interest in the deposit equal to his own." Id. at 247, 151 N.E. at 375.

Such an interest was created by the account notwithstanding "that withdrawals and deposits were made only by [the depositor], and no deposits or withdrawals whatever were made by [the other party] during [the depositor's] life. In other words [the depositor] exercised control of the account up to the time of his death." Id. It was found that a joint equal interest was created by virtue of the fact that the account agreement authorizes the other party to "withdraw all or any part of the funds upon deposit at any time during [the depositor's] life." Id. at 248, 151 N.E. at 375. Thus, the depositor had created by contract a present joint interest in the other party equal to his own, notwithstanding that full enjoyment of the account funds were postponed until the depositor's death. Id. at 248, 251, 151 N.E. at 375, 376.

The question that remained after Scobie was whether the opening of the account in joint and survivorship form would be conclusive as to the rights of the surviving party to the balance of the funds remaining in the account upon the death of the depositor. The court held that in order for the surviving party to be entitled to the balance of the account upon the death of the depositor, the record must show "that the depositor intended to transfer to the person to whom he made the account jointly payable a present joint interest therein equal to his own." Id. at syllabus. It was unclear, however, what role, if any, the introduction of evidence extrinsic to the contract would play in determining the depositor's intent.

Subsequent to Scobie, the court continued to identify joint and survivorship accounts as contractual in nature. Our earlier cases recognized that upon the opening of such an account, the right of survivorship vests in the joint parties by virtue of contract and, when the creator dies, the surviving party or parties have a right to the balance remaining in the account to the exclusion of the decedent's estate. Sage v. Flueck (1937), 132 Ohio St. 377, 8 O.O. 183, 7 N.E.2d 802, paragraphs one and three of the syllabus. Such right, arising as...