613 N.E.2d 686 | Ohio Ct. App. | 1992
Defendants-appellants, certain heirs-at-law of decedent Wilhelmina S. Kinsey, appeal from a judgment of the Franklin County Court of Common Pleas, Probate Division, finding in favor of defendants-appellees, the designated beneficiaries of various of decedent's payable on death ("POD") accounts in the action of plaintiffs-appellees for a declaratory judgment as to the proper disposition of the proceeds of those accounts.
Prior to 1984, decedent entered into contractual relationships with three financial institutions, Ohio State Federal Savings Loan Association (known later as "Citizens Federal Savings Loan Association of Dayton"), Buckeye Federal Savings Loan Association, and Dollar Savings Association (now known as "TransOhio Bank") (hereinafter "Citizens," "Buckeye," and "TransOhio," respectively), by which ten certificates of deposit ("CD's") and one savings account were established. The CD's were set up to repeatedly and automatically renew unless the depositor directed otherwise. The savings account was an ongoing relationship of indefinite duration. By way of signature cards, decedent made each of these CD's and the account payable upon her death to one of two corporate beneficiaries, the Slaymaker-Kinsey Memorial Scholarship Trust Fund of the Alpha Xi Delta Corporation, or the Slaymaker-Kinsey Memorial Scholarship Trust Fund of the Alpha Xi Delta Building Corporation (hereinafter collectively "the beneficiaries").1
On May 17, 1989, decedent died. On October 15, 1990, the co-executors of decedent's estate brought a declaratory judgment action seeking a determination of the proper disposition of the proceeds of the various POD accounts in light of the law following this court's decision in Powell v. City Natl. Bank Trust Co. (1981),
On November 21, 1991, the probate court rendered its decision, finding that decedent's beneficiary designations were valid, and that the beneficiaries were entitled to the proceeds of the accounts. The heirs-at-law, appellants herein, appeal, stating the following assignments of error: *825
"The trial court erred to the prejudice of appellants when it found that from the date of the original enactment of R.C.
"The trial court erred to the prejudice of appellants when it found that new contracts were formed each time the certificates of deposit containing POD designations rolled over.
"The trial court erred to the prejudice of appellants when it found that the savings account at Citizens Federal Savings and Loan Association should be treated as the certificates of deposit were treated."
The issue of the effect of decedent's designation of artificial persons as beneficiaries of her POD accounts is governed primarily by R.C.
From its original enactment in 1961 until its amendment in 1984, R.C.
"A natural person * * *, referred to in sections
Similarly, R.C.
"When a * * * deposit * * * is made, in any bank, building and loan or savings and loan association, * * * payable to the owner during his lifetime, *826 and to another on his death, such * * * deposit * * * may be paid to the owner during his lifetime, and on his death such * * * deposit * * * may be paid to the designated beneficiary * * *."
In 1981, this court addressed the issue of permissible beneficiaries under R.C.
"A natural person * * *, referred to in sections
As amended, the law permits artificial persons to be named beneficiaries of POD accounts. The new language does not indicate that it was intended to operate retrospectively.
In reviewing the foregoing, the trial court concluded that the amendment to R.C.
Despite language in the amendment's legislative summary indicating that it was intended to "clarify" the law, the amendment changed the law. R.C.
Further, since the statute lacks language indicating that it is intended to operate retrospectively, R.C.
The trial court's second independent basis for upholding the validity of the named beneficiaries was contract theory. Specifically, the trial court held that each time one of the CD's automatically renewed, a new contract, governed by the law as it existed at the time of the renewal, was formed. Since each of the CD's in this case has been automatically renewed at least once since 1984, the court concluded that these accounts are governed by amended R.C.
The trial court rested its determination on State ex rel.Preston v. Ferguson (1960),
The original agreements creating the CD's herein provided that they would run for a definite term, ranging in duration from one hundred eighty-two days to forty-eight months. A renewal provision in each provided that upon the expiration of the initial term, the CD's would automatically renew for successive additional terms of a duration equal to the initial term, unless the depositor took certain enumerated steps to prevent the renewal. Despite appellants' unsupported arguments to the contrary, these agreements are within the scope ofFerguson. See, also, Benson v. Rosler (1985),
Appellants' third assignment of error asserts that the trial court erred in treating the POD savings account in the same manner in which it treated the CD-based POD accounts. While decedent's POD accounts consisted of ten CD's, it included a single savings account. Although the trial court treated all eleven POD accounts as CD's, the savings account, unlike the CD's, contained no renewal provision and was governed throughout its existence by the original contract between the decedent and the financial institution.
Generally, if a contract or contractual provision is rendered a nullity through the operation of a statute, the repeal of the statute will not revive the ineffective contract or provision unless the repealing Act expressly provides for such retrospective effect. Nichols v. Poulson (1834),
While the decedent did not expressly redesignate the original beneficiary following the amendment of R.C.
Through her failure to change beneficiaries, decedent reaffirmed her original choice of beneficiary for the savings account, and thereby brought the designation within the purview of amended R.C.
Having overruled all three of appellants' assignments of error, we affirm the judgment of the trial court.
Judgment affirmed.
JOHN C. YOUNG, P.J., and BOWMAN, J., concur.
To the extent R.C.