Jones, Adm. v. Hamilton, Adm.

³⁷³ Hammond, J., delivered the opinion of the Court. The personal representatives of a husband appeal from a decree awarding a fund put in court on interpleader by a Federal Savings and Loan Association, that had been in the joint names of the husband and wife, to personal representatives of the wife. On September 10, 1954, there was deposited in the First Federal Savings and Loan Association of Laurel $10,000 in an account in the names of Sammie C. Elam and Sarah F. Elam, his wife. A savings account book was given to the depositors, bearing their names, the account number and the deposit.

The savings account book on the outside cover bore the legend “Always bring this book with you”; each inside page contained the warning “Always bring or mail this book with each transaction”; and on the last page was the admonition “This book must accompany all transactions”. On March 22, 1955, there was delivered to the Savings and Loan Association a signature card signed by Sammie C. Elam and Sarah F. Elam, which under the heading “Joint Savings Account” bore the following legend: “The undersigned hereby apply for a savings account in the FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF LAUREL, LAUREL, MD. in the joint names of the undersigned as joint tenants, with the right of survivorship, and not as tenants in common. Specimens of the signatures of the undersigned are shown below and the Association is hereby authorized to act without further inquiry in accordance with writings bearing either such signature; it being understood and agreed that any one of the undersigned who shall first act shall have power to act in all matters related to the membership and any account in said Association held by the undersigned, whether the other person or persons named in the account be living or not. The withdrawal or redemption value of any such account or other rights relating thereto may be paid or delivered in whole or in part to any one of the undersigned, who shall first act, and such payment or delivery or a receipt or acquittance signed by any one of the undersigned shall be a valid and sufficient release and discharge of said Association.” ³⁷⁴ Sometime before June 13, 1955, Sammie C. Elam notified the Savings and Loan Association that none of the funds in the account should be released to his wife, Sarah F. Elam, because there was pending litigation looking to a separation or divorce, and that the account should be kept intact until the outcome of the litigation.

On June 13, 1955, Mrs. Elam presented the book and made demand for the payment to her of the amount on deposit. A few days later, Mrs. Elam died intestate. Sammie C. Elam then demanded that the Association pay him the funds as survivor. The Association, having paid neither the wife nor the husband after notice of their marital differences and litigation between them, filed a bill of interpleader, praying that Sammie C. Elam, on the one hand, and the personal representatives of Sarah F. Elam, on the other, be brought into court to “interplead and adjust their several demands and claims between themselves”, the Association saying that it was willing that the amount in the account “should be paid to such party as shall be entitled thereto.” Sammie C. Elam answered the bill of interpleader and claimed the fund as the surviving depositor.

Shortly thereafter, he was shot and killed, and his administratrix reiterated in her answer the claim that he took by survivorship. The answer of the administratrix of Sarah F. Elam claimed the money because “her intestate duly presented the account passbook at said Association’s office, during business hours, to an officer or duly authorized agent of said Association and demanded that payment be made to her of the funds on deposit as aforesaid, which payment was refused.” Each side made a motion for a summary decree and the case was submitted on stipulation of the parties that the facts set forth in the original bill of interpleader, the material parts of which we have recited, were to be taken as true, that the savings account book and the copies of the signature card and by-laws of the Savings and Loan Association be considered as evidence and, finally, that at the time Sarah F. Elam presented the book to the Association and made demand for the funds on deposit, the Association refused payment thereof, “and its Secretary-Treasurer stated that there was a domestic controversy 'between the parties of which they were ³⁷⁵ on notice.” The only parts of the charter and by-laws which might be material to the question at issue are: Sec. 6 of the charter, which provides that “Upon receipt of a written request from any holder of a savings account of the association for the withdrawal from such account of all or any part of the withdrawal value thereof the association shall within 30 days pay the amount requested”; and paragraph 9 of the by-laws, providing that there shall be delivered “to each person upon the initial payment on his savings account in the association an account book or other written evidence of such account.” The chancellor held that the possessor of the passbook was entitled to draw the money upon presentation of the book and demand on the Association, and that payment having been wrongfully refused when “the Association was under legal obligation to pay”, this conduct “created a chose in action in favor of Mrs. Elam against the bank.” On this finding, the decree awarded the fund to the wife’s estate. Appellant urges upon us that there was a valid joint tenancy in the bank account, that none of the unities of such a tenancy had been severed at the time of Mrs. Elam’s death, and that therefore Mr. Elam was entitled to the fund as the survivor. Appellant goes further and says that even if Mrs. Elam’s demand be considered the equivalent of delivery of the fund to her, as the chancellor treated it, nevertheless, Mr. Elam’s right of survivorship was not defeated.

Reliance is placed on out-of-state cases following what might be called the New York rule. New York courts hold that where one joint tenant withdraws all of the money in a joint bank account and redeposits it in his or her own name, or otherwise appropriates it, co-tenancy is not thereby terminated and the interest of each depositor remains as it was in actuality within the terms and limits of the joint tenancy when the funds stood to their joint account. See O’Connor v. Dunnigan, 143 N. Y. S. 373, affirmed without opinion by the Court of Appeals of New York, 107 N. E. 1082 ; State v. Gralewski’s Estate (Ore.), 159 P. 2d 211 , and cases cited therein. There are New Jersey and Massachusetts cases that take the view that withdrawal of the funds by one joint tenant severs the tenancy and makes the owners tenants in common, so that one-half ³⁷⁶ of the account is held by the withdrawer as agent or trustee of the other party.

We need not consider the effect of these decisions since this Court has decided many cases that have established the Maryland law in the matter of joint accounts. In Gorman v. Gorman, 87 Md. 338 , the account was in the name of T and M, her niece, “joint owners; payable to the order of either, or the survivor.” T died and M claimed the fund. It was urged upon the Court that there were three parties to a complete and valid written contract' — the Bank and T and M and that the testimony showed that the Bank deliberately used this form so there would be survivorship without administration in the Orphans’ Court, knowing that this was impossible without joint ownership. It was claimed that all this was explained to T and M and agreed to by them.

The Court said that the money in the account originally belonged to T and answered the contention “that the words ‘joint owners’ mean exactly what they imply”, by saying “But the question before us is not as to the meaning of the word ‘owners,’ or the words ‘joint owners’ in themselves and apart from the connection in which they are used in the entry in the bank-book. And while we may admit that these words have an ascertained legal meaning in themselves, yet we entirely agree * * * that they are not used here in the definite legal sense imputed to them by the appellant.” The Court went on: “And whatever may be the meaning and legal effect of the words ‘joint owners’ generally, we think it impossible to give them the broad signification claimed for them * * *, and with the controlling fact admitted, that Theresa always held possession of the bank-book. * * * we cannot close our eyes to all the other evidence in this case and give effect alone to two words in the entry.” In Whalen v. Milholland, 89 Md. 199, 202, 203 , the Court said: “But much stress was laid on the words ‘joint owners,’ which were subsequently stamped on the pass-book. Of themselves these two words, as we said in Gorman v. Gorman, supra, are not sufficient in a deposit made in a Savings Bank, to transfer title to the fund — that is, they are not sufficient to convert the fund from being the property of the person to ³⁷⁷ whom it belongs into the property of the original owner and another individual. Whatever their technical import may be when employed in other instruments, they cannot operate to vest an ownership to the extent of one-half of the fund in some one else, when, under the terms and according to the legal effect of the very paper in which they are used, the depositor retains such a dominion over the fund deposited that he may at any moment withdraw the whole of it. * * * Always bearing in mind that the fund belonged to only one of the parties named as joint owners, and that you are searching for evidence tending to show a gift of that fund, or of a part of it, to a person who confessedly in the first instance owned none of it, the control retained over the whole of it by the original owner under the very terms of the deposit which he makes, is of great significance in repelling any inference that he intended to part with his ownership in any way whatever.

Particularly is this so when the original owner retains possession of the pass-book and when the deposit is made in a Savings Bank, by the rules of which the book must be produced before the deposit can be withdrawn.” The Court went on to point out that there would be an effective gift of the money on deposit under certain circumstances, saying: “Where, however, it appears that the original owner purposely deposited the fund to his and another’s credit as joint owners, retaining the pass-book so as to continue his dominion over the money; a distinct, unequivocal delivery of the book to the other person named as co-owner, with the intention to part with the ownership and to make an irrevocable gift of the fund and an acceptance of it by the donee, would pass the whole interest therein to the donee, because there would then be no inconsistency between the legal effect of the entry on the book, and the right in which the donee of the book could claim the deposit, and there would no longer be a locus penitentiae in the original owner. Every element of a perfected gift would then be present.” It was noted, however, that if the intent was to make the purported donee of the book an agent, and delivery of the book was to him in his capacity as agent, the result would be otherwise because title to the deposit would not pass. ³⁷⁸ The second Milholland case, which is found in 89 Md. 212 , under the title of Milholland v. Whalen, immediately following the first Milholland case, just discussed, crystallized the law on savings bank deposits and marked the roadway for the future. It was reiterated that a valid trust of personal property may be created by parol declaration that the declarant holds the property as trustee for another. The Court held that where Miss O’Neill deposited her money in a savings bank “in trust” for herself and her sister, Mrs. Whalen, “joint owners, subject to the order of either; the balance at the death of either to belong to the survivor” and the entry was made at the direction of Miss O’Neill and carried out her intention, the balance on deposit at Miss O’Neill’s death passed to Mrs. Whalen as beneficiary of the trust, even though the depositor retained the passbook and made withdrawals from time to time.

Since this decision, most savings accounts have been in the trust form but litigation nevertheless has been abundant. Many decisions of this Court after the Milholland case — and occasional decisions before — have made the law to be what the summary in Bierau v. Bohemian Bldg., etc., Ass’n, 205 Md. 456, 461-465 , from the cases cited therein, says it is: “* * * the usual entry ‘A in trust for A and B, joint owners, balance at the death of either to belong to the survivor’ is, unexplained, a sufficient declaration of trust, since it indicates an intention to establish the trust, but this may be rebutted. The mere use