Boehm v. Harrington

Liss, J., delivered the opinion of the Court. William J. Boehm, the appellant herein, was appointed by the Orphans’ Court for Anne Arundel County as special administrator of the estate of Annie Bell Brashears, deceased, to preserve the assets of her estate. Boehm, while acting as special representative, filed a petition in the Orphans’ Court for Anne Arundel County requesting that Alice Harrington, the appellee, be required to turn over to Boehm a certificate of deposit and a bank account representing funds originally owned by Annie Bell Brashears and deposited in the names of Mrs. Brashears and Mrs. Harrington. A hearing was held before the Orphans’ Court and by agreement Boehm filed a bill of complaint to determine the ownership of the accounts which were the subject of controversy.

The appellee filed an answer to the bill of complaint and the matter came on for hearing in the Circuit Court for Anne Arundel County. ³⁴⁷ The evidence produced before the trial judge disclosed that in 1978 Annie Bell Brashears was the owner of a savings account in the Annapolis Federal Savings & Loan Association which was held in the name of Mrs. Brashears and her sister, Hattie Fallen. Later that year, Mrs. Brashears caused Mrs. Fallen’s name to be removed from the savings account and the account was then listed in the names of Mrs. Brashears and Mrs. Harrington. On September 15,1978, the savings account in the Annapolis Federal Savings & Loan Association was closed and the funds withdrawn. A portion of the funds was deposited in a checking account at the Annapolis Banking & Trust Company.

The checking account was opened in the name of Alice M. Harrington and Annie Bell Brashears, subject to the order of either, balance at death of either to belong to the survivor. Mrs. Brashears could not write her name and her mark was accepted by the bank as her signature. On September 15, 1978, the Annapolis Banking & Trust Company issued a certificate of deposit in the name of Annie Bell Brashears and Alice M. Harrington in the amount of $10,000. The certificate provided that all interest payable quarterly was to be deposited in the checking account previously mentioned.

It was conceded, at trial, that all the funds in both the checking account and the certificate of deposit were originally the sole property of Mrs. Brashears. Mrs. Brashears died intestate in December of 1979. At the time of her death the principal assets of her estate were two homes, the checking account in the Annapolis bank and the certificate of deposit. The original certificate of deposit had been "rolled over” by the bank, and reissued in the same manner on September 21, 1979 in the amount of $10,600.

Both the personal representative and Mrs. Harrington claimed ownership of the balance remaining in the checking account and the certificate of deposit. It was conceded at trial that during the lifetime of Mrs. Brashears the checking account was used exclusively to provide funds for the medical expenses and maintenance of Mrs. Brashears and that after her death several checks were issued on this account by Mrs. Harrington which were not for this purpose. ³⁴⁸ The evidence before the trial judge established that Mrs. Brashears was uneducated, and illiterate and had relatively little knowledge of her business affairs. Until 1974 her husband had taken care of her business affairs and thereafter her attorney had taken over. In 1975 she underwent surgery resulting in the amputation of one of her feet.

Beginning in 1978 Mrs. Harrington had become her adviser and confidante in the management of her affairs. The trial court found that Mrs. Brashears had only minimal contact with her family in the last years of her life and that Mrs. Harrington had taken over a substantial portion of the responsibility for her care. There was testimony produced by the appellee that the deceased had praised Mrs. Harrington as a sister, without whom she could not have survived. There was testimony that Mrs. Harrington had left her sick husband to care for the needs of Mrs. Brashears.

The trial judge, after hearing all the witnesses and arguments of counsel, concluded that the checking account was an account of convenience established for the purpose of paying Mrs. Brashears’ obligations and that it was intended that upon her death the balance then remaining in the checking account was to be the property of Mrs. Brashears’ estate. The court further decided that the certificate of deposit was a gift inter vivos from Mrs. Brashears to Mrs. Harrington. A decree and order reflecting the trial court’s conclusions was issued on April 27,1982. Both the appellant and the appellee as cross-appellant were aggrieved by the court’s decree and each of them seasonably filed appeals in this proceeding.

The issues raised by the appeals are the following: 1. Did the trial court err in concluding that the checking account was an account of convenience and upon the death of Mrs. Brashears the balance remaining in the account was the property of the estate of Annie Bell Brashears? 2. Did the trial court err in concluding that the appellee was entitled to ownership of the certificate ³⁴⁹ of deposit because of an alleged gift inter vivos from Mrs. Brashears to Mrs. Harrington? 1. The trial judge made certain findings of fact which are amply supported by the record in this case.

He found that there was a confidential relationship between Mrs. Brashears and Mrs. Harrington. He also concluded that some twenty months before her death, Mrs. Brashears was "not senile or unable to take care of her own affairs at the time she created the checking account and certificate of deposit” and he had "no problem in concluding that Mrs. Brashears knew exactly what she was doing when she opened the accounts.” We shall initially consider the status of the checking account established by Mrs. Brashears. That account was deposited in the name of Mrs. Brashears and Mrs. Harrington as joint owners, in trust for one another, subject to the order of either, and the balance upon death to belong to the survivor. The creation of such a trust gives rise to a rebuttable presumption of its validity, and the burden is thrust upon the party seeking to rebut it.

Haller v. White, 228 Md. 505, 509-10 , 180 A.2d 689 (1962); Midler v. Shapiro, 33 Md. App. 264, 270 , 364 A.2d 99 (1976). When, however, a confidential relationship is shown to exist, as in the instant case, the burden shifts to the party seeking to uphold the validity of the trust and gift. It then becomes the duty of the donee to demonstrate that the donor understood the nature of the transaction and intended to make a gift. Tribull v. Tribull, 208 Md. 490, 507 , 119 A.2d 399 (1956).

The trial court concluded that based upon all the facts and circumstances the presumption of the validity of the gift was rebutted by the intention of the donor, Mrs. Brashears, to establish an account of convenience. In Shirk v. Suburban Trust Company, 248 Md. 114 , 235 A.2d 549 (1967), the Court of Appeals said: ³⁵⁰ The general rule is that the creation of a joint bank account in the form used here is a sufficient declaration of trust provided the presumption arising therefrom is neither rebutted nor explained. [Citations omitted]. But, as stated in Shook v. Shook, 213 Md. 603, 607 , 132 A.2d 460, 462 (1957) "[t]he entry may be explained and the intention indicated may be rebutted. It is always open to the executor or administrator [of the estate] of the decedent or the parties in interest to show that the purpose of the declaration of trust was not what it, in form, appeared to be.

The rebuttable presumption is that created by the execution of the transfer, and the burden of proof is on those seeking to rebut such presumption.” [Id., at 118-19]. In Haller v. White, supra, the Court of Appeals had before it an account similar to the account in this case which had been established primarily to supply the needs of the donor during her lifetime. In discussing the disposition of the remaining funds at the death of the donor, the Court stated: The appellant contends that Mrs. Poole delivered the money to Mrs. Haller and agreed to the opening of the account in the names of the two nieces as j oint owners, merely as a convenience and in order that they might withdraw funds for her benefit. The appellee agrees that the money was to be used for the "needs” of Mrs. Poole during her lifetime.

There is a sharp conflict in the testimony as to what was her intention in regard to the disposition of the balance remaining in the account at her death. Mrs. Haller contends that it was Mrs. Poole’s intention that the balance be paid to Mrs. Stallings; Mrs. White contends that it was her intention that it be divided between the two nieces. There is a third possibility that the balance might be payable to Mrs. Poole’s estate. The mere fact that the fund was to be used primarily for the needs of Mrs. Poole during her lifetime ³⁵¹ would not necessarily defeat or invalidate a gift inter vivos of the balance remaining at death. [Citations omitted].

The question is as to the disposition of the remainder interest. On this question we think the most significant fact is the form of the account which on its face creates a joint tenancy. [ 228 Md. at 510 ]. We have carefully reviewed the record extract in this case and are convinced that Mrs. Harrington has met her burden of establishing that the donor understood the nature of the transaction and intended to make a gift of the funds remaining in the checking account, at the donor’s death, to her. The fact that the trust and savings account form may be used to enable the payment of bills or for convenience of withdrawal does not necessarily limit the terms of the trust.

See Bierau v.