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In Re Estate of Habel

OCTOBER 9, 1967.

IN THE MATTER OF THE ESTATE OF HOWARD R. HABEL, DECEASED, DEFENDANT-APPELLEE,

v.

IN RE PETITION OF RALPH HILGERS AND RAYMOND HILGERS, PETITIONERS-APPELLANTS.



Appeal from the Circuit Court of Cook County, Probate Division; the Hon. JOHN PAVLIK, Judge, presiding. Reversed and remanded with directions.

MR. PRESIDING JUSTICE MURPHY DELIVERED THE OPINION OF THE COURT.

Petitioners, Ralph Hilgers and Raymond Hilgers, appeal from an order of the Probate Division of the Circuit Court, which denied their petition to be declared the owners of stock which stood in the name of the decedent at the time of his death. Petitioners claim that the decedent purchased the stock with funds which came from their grandmother as a gift to them.

Howard R. Habel, the maternal uncle of the petitioners, died on March 27, 1965, leaving a will dated May 12, 1961, which was admitted to probate. Petitioner Raymond Hilgers and Frank F. Pipal were named as coexecutors. Included in the inventoried assets of the estate were 200 shares of Standard Kollsman common stock. The instant petition alleged that the decedent purchased this stock with funds which came from a joint savings account which stood in the name of their grandmother and the decedent (her son), with instructions from the grandmother to the decedent to deliver the proceeds of the account to the petitioners. At the hearing of the petition, the estate was represented by Gregory A. Gelderman as "special administrator." The evidence of petitioners consisted of the testimony of Ethel Hilgers, sister of the decedent and mother of the petitioners, and Raymond Hilgers, and a number of exhibits. No evidence was offered on behalf of the estate. The court entered an order denying and dismissing the petition.

Raymond Hilgers testified that after the death of the decedent, he went to decedent's home and among decedent's papers he found five savings account books (Exhibits 1 to 5) and a document in decedent's handwriting (Exhibit 6), all of which were received in evidence.

The savings account books (Exhibits 1 to 5) were: No. 1, a Bell Savings and Loan Association account established July 1, 1959, in the name of "Florence A. Habel or Howard Habel," balance $8,000; No. 2, a Bell Savings account established March 1, 1962, in the name of "Howard R. Habel," balance $8,000; No. 3, a Belmont-Central Savings and Loan Association account established April 25, 1957, in the name of "Florence Habel and/or Howard R. Habel," balance $6,502.50; No. 4, a Belmont-Central savings account No. 31860, established February 23, 1962, in the name of "Howard Habel or Raymond Hilgers," initial deposit being $2,250; No. 5, a Belmont-Central Savings account No. 31861, established February 23, 1962, in the name of "Howard Habel or Ralph Hilgers," with the initial deposit being $2,250. Exhibit 6 was a document in the handwriting of the decedent, dated November 15, 1963. It itemized decedent's assets and included as item 6 "Stocks in Standard Kollsman." At the end of the list of assets was the following declaration in the handwriting of the decedent: "The Standard Kollsman and H.M. Bulsby Stock are to go to Ray and Ralph (Used Grandma's Money to Purchase)."

Mrs. Ethel Hilgers testified that she was a sister of the decedent and the mother of the two petitioners, Raymond and Ralph. At the time of the death of her mother (January 30, 1962), there was a savings account in the Bell Savings and Loan Association in the name of "Florence A. Habel or Howard Habel, as joint tenants with the right of survivorship," (Exhibit 1), and a savings account in the Belmont-Central Savings and Loan Association in the name of "Florence Habel and/or Howard R. Habel," (Exhibit 3). The money deposited in both accounts was her mother's money.

Mrs. Hilgers further testified that in February 1962, shortly after her mother's death, her brother, Howard Habel, came to her and told her he had the two bank books and he was going to do "as she [his mother] said he should do. He said: the money in the Bell Savings was to go to his use as long as he lived. The money in the Belmont Bank was to go to the boys and paying of her funeral expenses. At that time we went to the bank and he put the money in the boys' names. I went with him at the time that he opened up the accounts at the Belmont Bank. The accounts were opened in both his and each one of the boys' names. I was present when this was done. Petitioners' exhibits 4 and 5 for identification are the books that were given to me at that time." Some time later he said the money could make more on something other than bank interest, and he suggested buying "Standard Kollsman stock," where one of her sons was employed. She stated petitioners' Exhibit 6 was in her brother's handwriting and bore his signature.

On cross-examination, Mrs. Hilgers testified she never discussed money matters with her mother, and "I knew she had money in both those savings accounts, but my brother came to me and he told me what her wishes were, after she passed away." As to the Belmont-Central bank account, her brother said "that money was for the boys and to pay the funeral expenses, and some other expenses like headstones and things like that," and that is what the account was used for. She was present when the two joint accounts were opened for her sons, and the books "were kept in Howard's possession," and were in his possession when he died. He told her "he was buying Standard Kolls, the boys' share of it." The stock was in his name and in an account at a broker's office, which was never changed over. She did not know why it was not changed over to the boys, and "he left that note in with his belongings that it was the boys'."

Also received in evidence was a photostatic copy of the stock record of Howard R. Habel with Dean Witter and Co. This statement shows the purchase of 200 shares of Standard Kollsman stock on June 8, 1962, at a price of $21 per share, at a total cost, including commission, of $4,256. A payment of $4,256 was received on June 11, 1962. Exhibits 4 and 5, the Belmont-Central joint account books of the decedent and the petitioners, show withdrawals of $2,031.80 from each of the accounts on June 30, 1962, a total of $4,063.60. The statement shows the 200 shares were delivered under date of June 22, 1962.

Petitioners contend that the money deposited on February 23, 1962, in the Belmont-Central Savings and Loan Association accounts was a gift to them by their grandmother, and that the Standard Kollsman stock was purchased with money that came from these accounts, and a resulting trust of the stock arose in their favor.

The special administrator contends that the petitioners failed to show by clear and convincing evidence that their grandmother, Florence Habel, made a gift to them of the funds on deposit in said joint account, in the names of herself and son, Howard Habel; that failing to do so, Howard Habel could not become a trustee of the funds for the petitioners; that the 200 shares of stock in Standard Kollsman purchased by Howard Habel on June 8, 1962, belonged to him during his lifetime and became a part of his estate upon his death, and that the trial court was correct in so holding.

After considering the theories and supporting authorities offered by both sides, we believe the guidelines to be used are found in the "joint account" and "resulting trust" pronouncements of our Supreme Court.

As to "joint accounts," in Murgic v. Granite City Trust & Savings Bank, 31 Ill.2d 587, 202 N.E.2d 470 (1964), it is said (p 590):

"It is implicit in Wubbena that a prima facie presumption of donative intent exists where the proof shows that the making of the deposit and the execution of the contract is in conformity with the statute. As we stated in recognizing the increased use of joint tenancy accounts and legislative relaxation of rules pertaining to them: `Public policy would seem to require the adoption by the courts of a more liberal and practical view of these common transactions.' (Frey v. Wubbena, 26 Ill.2d 62, 66.) The legislative policy to treat the joint account as a useful technique for transferring intangibles dictates that the estate or other person claiming against the survivor should have the burden of disproving intent on the part of the decedent, and the degree of proof required to void the presumption should be clear and convincing. This would add certainty to the law and at the same time protect a depositor's estate where the joint account was created without donative intent, for example where the account was opened for the convenience of the depositor as in Schneider. To hold that a lesser degree is required or that the burden shifted would tend to make every joint ...


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