Sody v. Sody

Moore, J., delivered the opinion of the Court. This is an appeal in a matrimonial action wherein the appellant husband challenges certain of the chancellor’s findings and orders relating to property, alimony and counsel fees. Perhaps the most significant issue arises out of the court’s determination that a former joint bank account of the parties was the sole property of the wife. The appellee, Phyllis L. Sody, was awarded a divorce a vinculo matrimonii in the Circuit Court for Baltimore County (Haile, J.) in a decree which also granted custody of a ⁶⁴⁶ minor child to the appellee but reserved for further hearing all matters relating to child support, alimony, counsel fees and division of jointly owned personal property.

After further evidentiary hearings, the court (Brannan, J.) made, inter alia, the following orders which are the subjects of this appeal: 1) That the proceeds withdrawn by appellee from the joint savings account of the parties prior to the filing of appellee's bill of complaint were the sole and separate property of appellee; 2) That the sum of $5 per week was to be paid as alimony by appellant to appellee to continue during the lives of the parties or until she should remarry; 3) That the sum of $2,500 be paid as'additional counsel fee to counsel for the appellee to be divided equally between the parties; 4) That the sum of $350 be paid by appellant to appellee, representing one-half of a private ' investigator’s fee paid by her; 5) That the sum of $836.48 be paid by appellant for automobile rental payments incurred by appellee from August 12, 1975, to October 21, 1975, the date of the hearing, when appellant disclosed the location of a 1973 Mercury Cougar automobile primarily used by appellee, but secreted by appellant. 1 The record discloses that the parties owned a residence in Baltimore County, as tenants by the entirety. It was valued by the wife in the sum of $45,000. They continued to live in it, without cohabitation, after the filing of the bill of complaint by the wife on June 26, 1974; the wife moved out on April 1,1975. 2 With respect to his financial condition, appellant testified ⁶⁴⁷ that he had been unemployed since February, 1975, drawing unemployment compensation in the amount of $99.00 per week. These payments had terminated by the time of trial.

He had previously been employed by Needlecraft Corporation of America as national sales manager, earning $27,500 per annum. He testified that he lost his job when the company was purchased by another corporation. Thereafter, he attempted several unsuccessful business ventures, including a loan company and a men’s cologne distributorship. At the time of trial, his only source of income was $384 per month representing installment payments from the sale of a corporation, Magnet Enterprises, which had owned a downtown Baltimore bar, operated by Mr. Sody.

The record reveals that the parties jointly held 75% of the stock of Magnet Enterprises prior to its sale, and that the remaining interest was owned by appellant’s mother. 3 Against these limited assets, appellant testified to monthly living expenses of $552. According to appellee’s testimony, she was employed as a real estate salesperson earning commissions of approximately $8500 in 1974 and $7500 in 1975. Previously, she worked part time for five years for the City of Baltimore. Mrs. Sody’s financial statement showed requirements of $1193.82 a month, without apportionment, for the support and maintenance of herself and the minor female child, Kelly, age 14.

Included in this assessment of needs was a $295 monthly payment under a mortgage of $24,000 on her residence, a townhouse which she had purchased for $50,000. (The $26,000 down payment was borrowed from her mother, to be repaid when convenient.) With respect to the joint bank account of the parties, the appellee testified as follows on direct examination: “Q Now, when you and your now ex-husband first had a parting of the ways did you — was there a joint bank account? A Yes. ⁶⁴⁸ Q Joint savings account? A Yes, there was.

Q Where was that account located? A It was located in Baltimore Federal Savings and Loan. Q Baltimore Federal Savings and Loan? A Yes.

Q And did you withdraw the money from that account? A I did. Q And where did you deposit that money? A In Yorkridge Federal.

Q And in whose name did you deposit it, that money? A My name. Q You have that bank book with you? A Yes, I do.

It is in that envelope. Q Now, I show you a savings account book, number 10546-5, Yorkridge Federal Savings and Loan Association, titled in the name of Phyllis Sody, and trust for self and Kelly Sody, joint owners, subject to the order of Phyllis Sody. Balance at death of either to belong to the survivor. And I ask you if you can identify this bank book?

A Yes, that’s mine. Q Alright. Now, the first deposit in this bank book is on June 12,1974? 4 A Right. Q In the amount of $9,423.91.

And additional deposit on June 13, 1974, the day after, of $150.00, starting out there with a full balance of $9,573.91, is that correct? A That’s correct. Q Now, you say this money came from a joint ⁶⁴⁹ account in the name of yourself and your husband from Baltimore Federal? A That’s correct.

Q Where did that money come from? A It was money that we had saved. Q Money that you had saved? A Right.

Q And any other specific sources in addition to money that you had saved? A Well, there was some money from Magnet Enterprises that was put into this bank account.” Appellee later testified that $2,300 of the total amount of the joint account represented the proceeds of a check drawn on the Magnet Enterprises checking account and deposited by her in the joint account at the request of appellant. Between the time the old account was closed out and the date of the hearings below, appellee had made withdrawals from the new account. These included: $300.00 — stereo set for son’s birthday 835.00 — to repair or replace an air conditioner compressor 250.00 — contact lenses for daughter, Kelly 1165.04 — legal fees 129.00 — car payment 100.00 — living expenses 700.00 — private investigator fees By the time of trial, the balance in the account was $4,093.04. 5 On cross-examination, Mrs. Sody gave the following testimony concerning her interest and that of Mr. Sody in the joint account: “Q Oh, well, are you saying then that half the bank account is your husband’s, or all of it is your husband’s, or what? ⁶⁵⁰ A Well - MR.

HENDLER [Appellee’s counsel]: Objection. THE COURT: Overruled. A Half of the bank account was supposedly his. MR.

CAHN [Appellant’s counsel]: Half of the bank account was supposedly his? A That’s correct. Q (By Mr. Cahn) But, you took it all? A That’s correct.” When Mr. Sody took the stand, his testimony concerning the account was limited to the following: “Q Alright.

Mr. Sody, there was some testimony about a bank account at Baltimore Federal Savings and Loan that was a joint account, you and your wife, is that correct? A That’s correct. Q That was monies put in from your earnings? A That’s correct.

Q Some monies went in from Magnet Enterprises,, is that correct? $2300? A $2300, that’s right. Q And have you ever gotten any money out of that joint account? In the last year and a half?

A I haven’t seen a penny of it.” As for the car rental of $836.48 ordered to be reimbursed by Mr. Sody, the wife testified that on August 12,1975, she reported to her insurance company that the 1973 Mercury Cougar was missing from the front of her house. The insurer permitted her rental fees for a 30-day period before reimbursing her for the loss. Shortly before the expiration of the 30 days, however, she learned, through her attorney, that the car had not been stolen, but that it had been taken by the appellant without his wife’s knowledge or permission. The insurance company then refused to pay for the car rental.

Mrs. Sody testified that she had to rent a car and that the total expense was $836.48. ⁶⁵¹ We will consider appellant’s assertions of error in the order presented. I Did the lower court properly declare the proceeds of the joint savings account to be the sole and separate property of the wife? The Maryland Code (1974), Courts and Judicial Proceedings, § 3-603 (b) provides: Determination or division of personal property. — A court granting a limited or absolute divorce may determine the ownership of personal property, other than chattels real, held, possessed, or claimed by a party to the divorce proceedings, and in accordance with that determination may: (1) Make a division of personal property between the parties; (2) Order a sale of personal property and a division of proceeds; or (3) Make any other disposition of personal property it deems proper, (formerly Code (1957), Art. 16, § 29). It is clear that a court of equity, sitting as a divorce court, does not have discretion to award the property of one spouse to the other.

Abell v. Abell, 12 Md. App. 99, 103 , 277 A. 2d 629 (1971). As stated in Joyce v. Joyce, 10 Md. App. 516, 522-23 , 276 A. 2d 692 (1970): “This statute does no more than to empower the court, in decreeing a divorce, to determine the ownership of the personal property of the parties and to apportion the property accordingly. Lopez v. Lopez, 206 Md. 509 . It confers no power to transfer the property of either spouse to the other, or otherwise to dispose of it.

And it is firmly established that a court of equity has no power, unless conferred by the legislature, to transfer the property of either spouse to the other, or otherwise to dispose of it.. . . Hall v. Hall, 180 Md. 353 . See ⁶⁵² Brucker v. Bensen, 209 Md. 247 ; Lickle v. Boone, 187 Md. 579 ; Gunter v. Gunter, 187 Md. 228 ; Elko v. Elko, 187 Md. 161 ; Dougherty v. Dougherty, 187 Md. 21 .” In Abell v. Abell, supra, this Court reversed the chancellor’s unequal distribution of personal property between husband and wife once a finding had been made that the property was jointly owned. Speaking for the Court, Judge Morton wrote, “[t]hus having found that the personal property was owned equally by the parties, the Chancellor was powerless to do anything more under the terms of [Art. 16] § 29 [now Cts. & Jud.

Pro., § 3-603 (b)] than to make an equal division between the parties of the jointly owned property....” 12 Md. App. at 104 . (Emphasis added.) See Gebhard v. Gebhard, 253 Md. 125 , 252 A. 2d 171 (1969). Appellant argues that the chancellor erred in awarding the proceeds of the Yorkridge Federal Savings & Loan Association savings account to his wife. It is his position that it was the duty of the chancellor to divide the account equally, “if not at the time of the removal of the funds by the appellee, at' least at the time that the matter was heard in CQurt.” The burden of proving an interest in the property is upon the spouse who asserts the affirmative of the issue.

Woodall v. Woodall, 16 Md. App. 17, 25 , 293 A. 2d 839 (1972). While the savings and loan association’s records and the original bank book were not offered in evidence, there was no. issue between the parties that the savings account was joint. Appellee herself testified that the money belonged to both parties in equal shares and was derived from mutual savings. The chancellor, however, apparently felt that since each joint owner had the legal authority to withdraw the entire amount, once the account was closed out by the wife, the husband’s interest was' divested.

In his opinion from the bench, he stated, in part: “And while there seems to be rather no Maryland case I can find on point, and while it seems at times very inequitable, it was a joint account subject to ⁶⁵³ the withdrawal of either one, there was no notice given to the bank of any problem, Mrs. Sody withdrew the funds and has used what she has expended to her family’s use and not to her own personal use. So I find that Mrs. Sody was entitled to withdraw the funds from the joint account, and she is entitled to keep the remaining balance of the proceeds.” Because the savings account was joint, the court was unquestionably correct in stating that Mrs. Sody was entitled to withdraw the funds. Such a right is conferred by statute. Maryland Code (1957, 1976 Repl.

Vol.), Art. 11, § 102. A bank is thus protected from any claim by one joint account owner when the other draws upon the account in whole or in part. See also Code (1957, 1973 Repl. Vol.), Art. 23, § 145.

The right to withdraw, however, is not dispositive of the husband’s claim that he is entitled to a one-half share in, at least, the balance on hand. Jones v. Hamilton, 211 Md. 371 , 127 A. 2d 519 (1956). In the case cited, Hammond, J. (later Chief Judge) presents a discursive analysis of Maryland case law pertaining to conflicting claims of co-owners, and of surviving owners of joint accounts where the co-owners are deceased.

In Jones , the sum of $10,000 had been deposited in a savings and loan association joint account in the names of a husband and wife, Sammie C. Elam and Sara F. Elam, “as joint tenants, with the right of survivorship, and not as tenants in common.” A few months after the account was opened, the husband notified the savings and loan association that none of the funds should be released to his wife because divorce proceedings were pending, and that the account should be kept intact until the outcome of the litigation. Thereafter, the wife presented the account book and made demand for the full sum on deposit. The bank refused. Within a few days, the wife died, intestate, and the husband made demand for payment of the funds as the surviving joint owner.

The bank thereupon filed a bill of interpleader. A short time thereafter, the husband was shot ⁶⁵⁴ and killed. The trial court was thus presented with the conflicting claims of the personal representatives of each. The husband’s administratrix pressed the claim earlier asserted by him that he took by survivorship.

The administratrix of the wife claimed the money on the ground that her intestate had duly presented the passbook and was entitled by that act to payment. The chancellor held that the possessor of the passbook was entitled to draw the money upon presentation of the book, that payment had been wrongfully refused, and that the conduct of the savings and loan association “created a chose in action in favor of Mrs. Elam against the bank.” The decree awarded the fund to the wife’s estate. The Court of Appeals remanded the cause, without affirmance or reversal, for further proceedings. Judge Hammond’s opinion makes clear that the reason for the remand was that the record was insufficient to make a determination of the fundamental issue involved namely: “The ownership of the fund and the actual intention of the owner or owners in following the course they did with regard to the creation of the account and the deposit of money.” 211 Md. at 381 .

Affirming the right of either to draw the money on demand, the Court pointed out that, as holder of the book, she was the owner of a chose in action as much before the demand as afterwards. The opinion then states: “In both cases the basic question is, as it still would have been if she had received the money on the day she demanded it, (although it might have had to be answered in a different form of action) — whose money was it originally, and by what right and in what capacity, as between her and her husband, did she withdraw and receive it.” (Emphasis added.) 211 Md. at 383 . In the course of Judge Hammond’s scholarly opinion it is disclosed that reliance was placed by the husband’s administratrix on cases from other jurisdictions following ⁶⁵⁵ what the court referred to as “the New York rule,” defined as follows: “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.” 211 Md. at 875 . The opinion also points out that a somewhat different view was taken in New Jersey and Massachusetts: “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 of the account is held by the withdrawer as agent or trustee of the other party.” 211 Md. at 375-76 .

In Jones , the effect of these decisions was felt not to require consideration for the reason that “this Court has decided many cases that have established the Maryland law in the matter of joint accounts.” 211 Md. at 276 . After a discussion of numerous