Kleinberg v. HellerKleinberg v. Heller
Concurrence Opinion
(concurring). Literally tens of thousands of our citizens are parties to joint savings accounts.
The Surrogate before whom this very case was tried suggested the following summary for remarks on this subject which he delivered months after his decision here: "Perhaps in no other area of the law governing distribution of decedent’s property has so much confusion arisen as in respect of the rules to apply to a joint bank account when one depositor has withdrawn funds without the consent of the other.” (Gelfand, Litigation in the Surrogate’s Court, NYLJ, May 10, 1974, p 1, col 3, quoting Matter of Kramer,
Before setting out my analysis, I believe it will be useful to state the pertinent facts. Decedent Jessie Lang died on March 31, 1972 at the age of 91. From October, 1963, when her
On August 31, 1970, 11 days after the aunt had moved to the home, the niece withdrew $1,094.90 from the account. In March, 1971, the account was closed when the niece withdrew its entire balance, $5,469.89. At the hearing before the Surrogate, she testified that the $1,094.90 had been withdrawn by bank check and paid to the home for the benefit of her aunt, a claim not borne out by the home’s records. She conceded that the $5,469.89 was transferred by her to an account in the name of her husband and herself. The closing withdrawal of the account was discovered only about a week before the aunt died, when an accountant preparing her tax return had occasion to check at her bank for the amount of interest the account had earned. The aunt’s estate demanded that the niece turn over to it the amount she withdrew in excess of half of the account. The Surrogate decreed that she was required to do so. The Appellate Division, by a divided court, held that she is not.
The phrase "joint tenancy”, when applied to joint bank accounts, has different meanings in different jurisdictions, depending in part on whether its creation and consequences are regulated by common-law principles alone or are subject to particular statutes as well. Such accounts were intended, among other things, to make it easier to effect the transfer of property without the strictures attached to testamentary dispositions. It was intended also to limit the need to comply with technical common law and statutory requisites for gifts, trusts, joint tenancies or contracts (see Inda v Inda,
In New York which was the first State to pass a law authorizing payment to the survivor of funds deposited in a joint account (L 1907, ch 247), the controlling legislation (Banking Law, § 675, formerly § 239, subd 3) ended up providing only some, not all, of the characteristics of such an account. One of these, created by the legislation itself, is that the opening of an account in the names of two people in facial form "to be paid or delivered to either, or the survivor of them” evinces an intention to create a "joint tenancy” (Banking Law, § 675, subd [b]), thereby placing the burden of refutation on anyone who challenges it. (Matter of Reardon, 25 AD2d 370.) That does not prevent a joint account from being attacked for fraud, undue influence or lack of capacity, all of which go to its inception, but the burden of proving such a claim still rests on the shoulders of whoever asserts it (Matter of Witter,
Also spelled out by the statute itself is a right of survivor-ship. Though such right is inchoate, some decisions, followed by the majority below, have talked of it in terms of absolute inviolability (Matter of Filfiley,
Experience indicates that most people who open such accounts, though lacking legal or business sophistication, do understand and intend some ultimate survivorship incident to a joint tenancy, at least with regard to funds remaining in such an account at the time of death. (Sadofski v Williams, 60 NJ 385; Matter of Imp, supra, p 914.) But they do not usually intend the perhaps more crucial fact that, from the moment of
Since half of the account was her property, the niece had the right and power to alienate it. For either tenant had the right, during the lifetime of the other, to effectuate such an alienation by withdrawing up to the full amount of her moiety Matter of Bricker [Krimer] v Krimer,
Recognition that such survivorship is destroyed is the product of case law. The statute itself makes no attempt to deal directly with such an event. (Matter of Bricker [Krimer] v Krimer,
It is also well established, again by judicial decree in the absence of statutory proviso, that, where a joint tenant withdraws more than his or her moiety, as was the case here, there is an absolute right in the other tenant, during the lifetime of both, to recover such excess. (Matter of Bricker [Krimer] v Krimer,
But suppose the aunt, during her lifetime, though reducing her claim against the niece to judgment, had not yet executed upon it or otherwise exercised a possessory right to the amount withdrawn? Should the result be any different? I think not. In Commrade v Commrade (
But that does not end the matter. The niece could successfully have resisted the turnover had the aunt consented to the withdrawal. In that event, she would have been acting in the aunt’s right; the aunt’s moiety would then, in effect, have to be regarded as withdrawn by the aunt herself. Such consent need not have been given in advance; it could have come by way of ratification. It need not have been express; it could have been implied. In short, agreement to the withdrawal could be found to have come about in any number of ways, though most often in such cases it is to be divined from circumstantial evidence of the intent of the one whose moiety was invaded. That intent, it should be made clear, however, speaks to the time of the invasion of the fund, not to the time of the creation of the account, though some of the relevant circumstances may very well be common to both events. Also while it is true that proof of intent may be rendered difficult by the dead man’s statute (CPLR 4519) and by the hearsay rules with respect to decedents’ out-of-court declarations (see Marrow v Moskowitz,
Thus, in Matter of Leisner (
In Matter of Kessler (
Other factors which, absent more direct proof, appear to be among those available for consideration in such cases to determine whether the excess withdrawer’s burden of proving consent has been met, are the duration, nature and closeness of the business, social or familial relationship between the tenants; the presence or absence of a habit of freely commingling their funds; significant revelations, if any, in the tenants’ testamentary dispositions; the generosity, or lack of it, manifested by the survivor in his other inter vivos dealings with the decedent; the amounts involved; the pattern of withdrawals; their purpose and timing; the age and physical and mental condition of each at the time of the withdrawal; the source of the funds; the circumstances in which possession of the bankbook came into the hands of the survivor at the time of the withdrawal; decedent’s ignorance or knowledge of the withdrawal and, if the latter, the length of time during which it existed; the protest or lack of protest against the withdrawal; the efforts, if any, to effect its return, considering of course, the absence or presence of opportunity to do so; and, highly important, whether the survivor was the donor.
There are those who prefer not to resort to such indices of agreement for the determination of such cases, favoring instead the supposed greater certainty of a rule under which inviolability of the right of survivorship to all funds withdrawn in excess of tenant’s own moiety is maintained by the legal fiction of regarding the withdrawal as though never made and, therefore, a nullity. (Matter of Filfiley,
It is even far from certain that a rule favoring survival of survivorship at all odds will bring greater certainty. It is more likely simply to shift the issue from a determination of intent at the time of withdrawal to whether a joint tenancy was ever intended in the first place. There is nothing academic about such an hypothesis. (Matter of Reardon,
Matter of Filfiley (
So tested, the case before us was not without its own factual texture. One of the two withdrawals involved had taken place when the aunt was 89, the other when she was 90. She did not appear to know of the latter one, which was by far the greater, until about a week before her death, when her accountant discovered it. That withdrawal was not shown to have been made in contemplation of death. In fact, it had been made about a year earlier. It was not made for the aunt’s benefit, but solely to create a new account for the niece and her husband. Significantly, the niece’s testimony before the Surrogate to the effect that the first withdrawal had been used to pay the nursing home for the benefit of the decedent did not find support in the information furnished by the home itself. It is also worth noting that the aunt’s will, under which she bequeathed substantial assets to charity and designated another relative’s husband as executor, made no mention of the niece at all.
These circumstances were sufficient for a factual determination as to whether the niece had sustained her burden of proof that the excess withdrawal was with the direct or implied
Order reversed, etc.
Notes
. "[TJhere are probably more savings accounts in joint or Totten form than in individual names * * * [tjhat the subject is of concern to lawyers is also evident from the litigation over such accounts”. (Sobel, Joint And Totten Savings Accounts, NYLJ, May 8, 1974, p 1, col 5.)
. Thus, it might be well if, by statute or banking regulation, a procedure to better inform depositors of these consequences was required to be employed at the time these accounts are opened. However, in view of the present absence of such requirement, the longstanding existence of the irrevocable moiety rule, and the fact that misunderstanding of it is not universal but it has been relied upon in the opening of many existing accounts, we ought not now cast doubt on the continued viability of the rule itself.
. "These accounts are regarded by people in modest circumstances as a poor man’s will.” (Matter of Edwards, 140 Ore 431, 436; see, also, Treat, Joint Bank Accounts: Poor Man’s Will or Everyman’s Snare, 112 Trusts and Estates 558.)
Lead Opinion
Order reversed, with costs, on the opinion by Surrogate Bertram R Gelfand, and matter remitted to the Appellate Division, First Department, for review of the facts (CPLR 5613).
Concur: Chief Judge Breitel and Judges Jasen, Gabrielli, Jones, Wachtler and Cooke. Judge Fuchsberg concurs in the following opinion.