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In Re Estate of Baxter

OPINION FILED NOVEMBER 30, 1973.

IN RE ESTATE OF AMOS P. BAXTER, DECEASED. — (THE SECOND NATIONAL BANK OF DANVILLE, ADMR., APPELLEE,

v.

FRANK BREWER ET AL., APPELLANTS.)



Appeal from the Circuit Court of Vermilion County; the Hon. Paul M. Wright, Judge, presiding.

MR. JUSTICE DAVIS DELIVERED THE OPINION OF THE COURT:

Rehearing denied January 29, 1974.

The Second National Bank of Danville, Illinois, administrator with will annexed of the estate of Amos P. Baxter, deceased, petitioner herein, brought this action pursuant to section 183 of the Probate Act (Ill. Rev. Stat. 1967, ch. 3, par. 183). The issue involved is whether or not a bank certificate of deposit, registered "Amos Baxter or Frank Brewer or Carrie Brewer as joint tenants with right of survivorship," was on the death of Amos Baxter, the property of Frank and Carrie Brewer, the surviving joint tenants, respondents herein, or the property of the estate of the decedent, Amos P. Baxter. The certificate of deposit was in the following form:

The trial court held that the bank certificate of deposit was the property of the estate and ordered the surviving joint tenants to deliver the certificate of deposit to the administrator. The appellate court affirmed (9 Ill. App.3d 92) and we allowed petition for leave to appeal. Both the trial and appellate courts treated the certificate of deposit as an ordinary bank deposit and held that, in the absence of an agreement in writing signed by the prospective joint tenants, no joint tenancy was created. Both courts held that the transaction was controlled by subsection (a) of section 2 of the Act in relation to Joint Rights and Obligations (Ill. Rev. Stat. 1967, ch. 76, par. 2(a)). In deciding the issue before us, consideration must be given not only to subsection (a), but also to the introductory paragraph of section 2 and to subsection (b). Section 2 of the Act in relation to Joint Rights and Obligations (Ill. Rev. Stat. 1967, ch. 76, par. 2(a)(b)) provides as follows:

"2. Except as to executors and trustees, and except also where by will or other instrument in writing expressing an intention to create a joint tenancy in personal property with the right of survivorship, the right or incident of survivorship as between joint tenants or owners of personal property is hereby abolished, and all such joint tenancies or ownerships shall, to all intents and purposes, be deemed tenancies in common; provided, that the foregoing shall not be deemed to impair or affect the rights, privileges and immunities, as set forth in the following provisos, (a), (b), (c) and (d):

(a) When a deposit in any bank or trust company transacting business in this State has been made or shall hereafter be made in the names of two or more persons payable to them when the account is opened or thereafter, such deposit or any part thereof or any interest or dividend thereon may be paid to any one of said persons whether the other or others be living or not, and when an agreement permitting such payment is signed by all said persons at the time the account is opened or thereafter the receipt or acquittance of the person so paid shall be valid and sufficient discharge from all parties to the bank for any payment so made;

(b) When shares of stock, bonds or other evidences of indebtedness or of interest are or have been issued or registered by any corporation, association or other entity in the names of two or more persons as joint tenants with the right of survivorship, such corporation, association or other entity and their respective transfer agents may, upon the death of any one of such registered owners, transfer said shares of stock, bonds, or other evidences of indebtedness or of interest to or upon the order of the survivor or survivors of such registered owners, without inquiry into the existence, validity or effect of any such will or other instrument in writing or the right of such survivor or survivors to receive the property, and without liability to any other person whomsoever who might claim an interest in or a right to receive all or a portion of the property so transferred." (Emphasis ours.)

Subsection (b) does not require an agreement to be signed to create a joint tenancy in shares of stock, bonds or "other evidences of indebtedness or of interest" when shares of stock or "other evidences of indebtedness or of interest" have been issued or registered by any corporation, association or entity in the names of two or more persons as joint tenants with the right of survivorship, and it further provides for the payment of such interest to the survivor or survivors of such joint tenants without liability. We find the certificate of deposit to be an "other [evidence] of indebtedness or of interest" and that the clause "or other evidences of indebtedness", as used in subsection (b), is sufficiently broad to include a certificate of deposit.

The certificate of deposit in the Rankin State Bank, Rankin, Illinois, was prepared by Margaret Hendricks, an employee of the bank, at the direction of Melvin Symmonds, an officer of the bank. Melvin Symmonds directed the registration upon being advised by Amos Baxter that he wanted to be sure the certificate of deposit was registered in such manner that it would pass to Frank Brewer and Carrie Brewer at his death. No separate signature card regarding the certificate of deposit was signed. Baxter gave the certificate of deposit to Frank Brewer and Carrie Brewer, who placed it in their safety deposit box for safekeeping.

The trial court held, as a matter of law, that the failure to sign an agreement frustrated the creation of a joint tenancy, that the certificate of deposit was a "deposit" and fell within the purview of subsection (a) of section 2 requiring a signed agreement by all parties. The court did not find a failure of donative intent or delivery, but specifically held that: "In the absence of a joint tenancy agreement signed by the depositors, the bank was not authorized to pay the proceeds in the deposit to the survivors and under those circumstances the actual issuance of a certificate of deposit in joint tenancy has no underlying res and is a nullity." (Emphasis added.)

The introductory paragraph of section 2 of the Act in relation to Joint Rights and Obligations provides that except by will or other instrument in writing expressing an intention to create a joint tenancy in personal property with the right of survivorship, the right of survivorship as between joint tenants or owners of personal property is hereby abolished and all such joint tenancies shall be deemed tenancies in common; provided that the foregoing shall not be deemed to impair or affect the rights, privileges and immunities, as set forth in the provisos (a), (b) and (c).

In the case at bar, the certificate of deposit was an "other instrument in writing" which not only adequately expressed an intention to create a joint tenancy in personal property, but also did in fact create a joint tenancy with right of survivorship as between the joint tenants therein named. Thus, the certificate of deposit is not a deposit within the provisions of subsection (a) of section 2, but rather falls within the proviso (b) as "other evidences of indebtedness or of interest" not requiring an agreement to be signed by all parties to create a joint tenancy, and also comes within the exception specified in the introductory paragraph of section 2.

In Frey v. Wubbena (1962), 26 Ill.2d 62, at pages 67 and 68 this court stated:

"A careful study of the first portion of proviso (a) of section 2 would seem to indicate that it is broad enough to authorize creation of joint tenancy in bank accounts by issuing a passbook in the names of the depositors as joint tenants without the execution of an agreement signed by the parties in accordance with the latter portion of the proviso. However, it was held in Doubler v. Doubler, 412 Ill. 597, that it is necessary that such an agreement be signed by the parties in order to create rights of ...


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