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Graves v. Graves

SEPTEMBER 5, 1963.

PAUL E. GRAVES, PLAINTIFF-APPELLANT,

v.

RAE E. GRAVES, OTTO GRAVES, JR., THE CITY NATIONAL BANK, A NATIONAL BANKING ASSOCIATION, CHICAGO HEIGHTS SAVINGS & LOAN ASSOCIATION, A CORPORATION, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Kankakee County; the Hon. VICTOR N. CARDOSI, Judge, presiding. Reversed and remanded.

CROW, PJ.

This is a suit in equity brought by the plaintiff, Paul E. Graves, against his brother, Rae E. Graves, a defendant, and others, to determine the ownership of certain joint tenancy building and loan accounts which were in the names of Otto H. Graves, their father, and Paul E. Graves and Rae E. Graves, the sons, not as tenants in common but as joint tenants, with the right of survivorship, at the death of the father, Otto H. Graves, on August 28, 1959. After the death of the father the defendant Rae E. Graves, without the knowledge or consent of the plaintiff, withdrew all of the funds and deposited part of them in his own name in a bank account at the defendant bank, and part of them in another building and loan account in his and another brother's name, Otto Graves, Jr., a defendant, in the defendant savings and loan association. The plaintiff seeks a determination that he is the equitable owner of one-half of the funds so withdrawn from the joint accounts without his consent and deposited in the individual name of the defendant Rae E. Graves or in the names of Rae and the other brother Otto, Jr. The trial court entered a Decree, September 28, 1962, in favor of the defendants, holding that the funds so withdrawn by Rae E. Graves from the joint tenancy accounts were the sole and exclusive property of that joint tenant.

The theory of the plaintiff is that the accounts were established by properly executed joint tenancy agreements in the names of the father, Otto H., and the two sons, Paul E. and Rae E. Graves. Prima facie, on the death of Otto H., the accounts passed to the surviving joint tenants, Paul E. and Rae E., in equal shares. When Rae E. Graves appropriated the entire property, without the knowledge or consent of Paul E. Graves, Rae E. is responsible and liable to Paul E. for one half of the accounts, as between the parties.

The theory of the defendants is that the money in the building and loan accounts was the joint property of the father, Otto Graves, deceased, and his son, the defendant Rae E. Graves. There was no intent on the part of either of such owners to make a gift to the plaintiff, Paul E. Graves, of a present interest in either of the accounts. Consequently, the defendant Rae E. Graves had a legal right to withdraw the funds.

On March 1, 1954, a joint tenancy building and loan account, No. 657, was opened in the Chicago Heights Federal Savings and Loan Association, Chicago Heights, Illinois, in the names of Otto H. Graves, Rae E. Graves, and Paul E. Graves, not as tenants in common but as joint tenants, by a deposit of $7,000. A proper joint tenancy agreement was executed by those parties on the signature card of the building and loan association.

On June 3, 1954, Otto H. Graves withdrew the money from that account and placed it in an account in the same building and loan association in the name of Rae E. Graves, individually. At that time Otto H. Graves was having some domestic problem with his wife. This culminated in a divorce April 30, 1956.

On September 7, 1956, Otto H. Graves had his son, Rae E. Graves, go to the building and loan association and have this building and loan account again placed in joint tenancy in the names of Otto H. Graves, Rae E. Graves, and Paul E. Graves, as joint tenants, with the right of survivorship, and not as tenants in common. This account was designated as No. 666. The account remained in joint tenancy in the names of the father Otto H. Graves, and the two sons, Rae E. Graves, and Paul E. Graves, until after the death of the father, August 28, 1959, and at that time was in the amount of $4,000.

Another joint tenancy account was opened at the Kankakee Federal Savings and Loan Association, Kankakee, Illinois, in the names of Otto H. Graves, Rae E. Graves, and Paul E. Graves, as joint tenants, with the right of survivorship, No. 31070, in the amount of $5,000 on October 5, 1956. On July 3, 1959 an additional $5,000 was deposited in this account, making the total amount of the account $10,000. It remained in joint tenancy in those three names until the death of Otto H. Graves and at the time of his death was in the amount of $10,000.

Another joint tenancy account was opened at Kankakee Federal Savings and Loan Association in the three names, Otto H., Rae E. and Paul E. Graves, as joint tenants, with the right of survivorship, No. 69700, July 7, 1958, with an initial deposit of $3000, and at the time of the decease of Otto H. Graves, the amount thereof was $1105. It had also remained in the three names as joint tenants from its establishment until the decease of Otto H. Graves.

After the decease of the father, the plaintiff Paul E. Graves and the defendant Rae E. Graves, on October 22, 1959, went to the Kankakee etc. Association and signed agreements and signature cards to open a new joint tenancy account in the names of Paul and Rae, as joint tenants, with the right of survivorship, for $10,000 and $1105 (the amounts respectively then in the foregoing accounts No. 31070 and 69700). Later that same day, however, the defendant Rae, alone, withdrew the whole $11,105 and deposited it in an account in his own name only in the defendant City National Bank. Two days later the defendant Rae, alone, at the Chicago Heights etc. Association, withdrew the $4,000 balance in the joint tenancy account there, No. 666, foregoing, and opened another account for that at the same association in his and his other brother, Otto, Jr.'s names, as joint tenants.

The applications and agreements entered into March 1, 1954 and September 7, 1956 between Otto H. Graves, Rae E. Graves, and Paul E. Graves, with the Chicago Heights etc. Association, purporting to be signed by all of those parties, are in evidence, as well as the similar agreements of the parties of October 5, 1956 and July 7, 1958 with the Kankakee etc. Association. In them Rae E. Graves, Otto H. Graves, and Paul E. Graves deposited the respective moneys as joint tenants, with the right of survivorship. The September 7, 1956 agreement further recites, inter alia: "It is agreed by the signatory parties with each other and by the parties with you (Chicago Heights etc. Association), that any funds placed in or added to the account by any one of the parties is and shall be conclusively intended to be a gift at that time of such funds to the other signatory party or parties to the extent of his or their pro rata interest in the account." That identical language appears in the similar applications and agreements of those parties upon the opening of the other accounts on October 5, 1956 and July 7, 1958, with the Kankakee etc. Association.

The father, Otto H. Graves, conducted a threshing and custom farm work business. Rae and Paul, as they grew up, helped in the business. Paul married and moved away from home. Rae was not married and remained at the father's home. At times Rae worked with his father. He also had other employment. Sometimes, when aiding the father, the customer paid Rae, but Rae always turned over to his father any moneys so received. Rae contributed no capital to the business of his father. No name such as Otto Graves and Sons was used in the business. There would not have been more than two years in a recent period of years (since about 1952, apparently) that Rae was not regularly employed full time elsewhere than in his father's business. When so employed elsewhere he only did extra work for his father. The father had saved his money, used what he needed for living expenses for himself and Rae, and opened these building and loan accounts with such surplus funds as he had accumulated. There is no evidence of any partnership agreement of any kind, oral or written, between the father and his son, the defendant Rae E. Graves. There is no evidence of any income tax returns indicating any partnership, or any income to Rae from the business. Rae said that throughout his recollection his father was working for himself. The father had earlier put approximately $15,000 in currency from savings of his business in the coal bin in his basement of his home, and the defendant Rae E. Graves had got after him for that. The money was then taken to the building and loan associations, for deposit. When they deposited the money they were told that whoever had the passbook could draw the money. The father and Rae kept the passbooks. The plaintiff, Paul E. Graves, never had possession thereof. Rae drew some money out during his father's lifetime. According to Rae, the father did not say that Paul could withdraw any money. The plaintiff, Paul E. Graves, testified that he did not deposit any of his own money in any of the accounts. The defendant Rae E. Graves testified that he turned over certain money to his father, but the amount thereof was not established, and he never himself took any of that money to the building and loan associations for deposit in the saving accounts, although Rae was sometimes with his father when the father made deposits in the savings accounts. Rae did not know whether any of his earnings from his other regular employments were put into any of these savings accounts. Rae said the money he gave his father at various times was put in the father's billfold and Rae did not know what his father did with it then.

At the time of the original creation, March 1, 1954, of the first joint tenancy account, No. 657, at Chicago etc. Association, the joint rights and obligations statute, Ill Rev Stats 1953, c 76, § 2, had abolished the right or incident of survivorship as between joint tenants or owners of personal property, but had expressly excepted instances, inter alia, where an instrument in writing expressed an intention to create a joint tenancy in personal property with the right of survivorship, and had also provided that the abolition of the right or incident of survivorship should not impair or affect the rights, privileges, and immunities, inter alia, as to shares or evidence of interest issued in the joint names of two or more persons or their survivors by savings and loan associations, and when an agreement permitting payments on account thereof or delivery thereof to any of such persons was signed by all such persons at the time when the shares or evidence of interest were issued the payment or delivery to any such person was to be a valid and sufficient release and discharge of the association. And at that time a special statute relating to savings and loan associations, Ill Rev Stats 1953, c 32, § 255f, particularly provided, inter alia, that any savings and loan association may issue shares, share accounts, or accounts in the joint names of two or more persons or their survivor.

At the time of the creation, September 7, 1956, of the next joint tenancy account, No. 666, at that association, and at the time of the creation, October 5, 1956, of the joint tenancy account, No. 31070, at the Kankakee etc. Association, the same statutes, so far as relevant, were in effect: ...


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