Appeal from the Circuit Court of St. Clair County; the Hon.
Thomas P. O'Donnell, Judge, presiding.
JUSTICE JONES DELIVERED THE OPINION OF THE COURT:
This action was brought by plaintiffs Walter Paskas (Paskas) and his wife, Agnes, to recover a sum of $14,293.60 which they allege defendant Illini Federal Savings & Loan Association (Illini) wrongfully paid out to Julian Baltakis, a joint depositor with plaintiffs in a joint savings account at Illini. Also named as defendants are the estate of Julian Baltakis and Anne Skikas, the latter of whom was named as a joint tenant with Baltakis in a new account opened with the funds in question. A counterclaim was filed by Illini pursuant to section 26.2 of the Civil Practice Act (Ill. Rev. Stat. 1979, ch. 110, par. 26.2) in which it tendered the disputed sum to the court and disclaimed any interest in the funds except as to usual bank charges and attorney fees. The trial court found that defendant Anne Skikas was entitled to the proceeds of the joint account with Baltakis and ordered that plaintiffs take nothing from the suit. The court further found against Illini on its counterclaim. Plaintiffs appeal and Illini cross-appeals from this judgment. We affirm.
On September 8, 1970, plaintiff Paskas opened a savings account with Illini with a deposit of $20. This account was changed to a joint savings account on September 17, 1970, when Paskas added the name of his uncle, Julian Baltakis, as joint tenant with right of survivorship. At that time, Baltakis deposited $3,000 which was to be used to pay his burial expenses. Paskas and his uncle signed a signature card creating the joint account and received a passbook, which Paskas retained in his possession.
The passbook contained the following "information" about the account:
"1. ADDITIONS AND WITHDRAWALS — * * * Passbook must be presented for withdrawal.
3. LOSS OR DESTRUCTION OF PASSBOOK — Please notify us without delay if this book is lost, stolen, or destroyed. A new book will be issued after an affidavit is executed by all the owners of the account." (Emphasis added.)
The signature card stated in pertinent part: "A specimen of our signatures appears above and you are hereby authorized to act without further inquiry in accordance with writings bearing any one of such signatures. If only one signature is required, the Association may pay without liability for such payment to any one or to the survivors at any time."
The parties subsequently made three substantial deposits into the account: $2,100 from a joint checking account of Paskas and his wife, $9,496.14 from a savings account in the name of Julian Baltakis and his sister (Paskas' mother), and $2,135.35 from the sale of property jointly held by Paskas and his uncle. Various amounts were withdrawn and used to pay taxes on and maintain family rental property, to build a fence around Paskas' sister's house when his uncle went to live there, and to buy a hearing aid for the uncle.
Paskas testified that during this time there was never any discussion as to who put money into the account. "It was a family affair. Whoever wanted it put it in." Paskas, however, maintained exclusive possession of the passbook and handled all transactions regarding the account. Paskas' social security number was on the account, and he received all statements of interest earnings and reported this income on his individual tax returns. On March 26, 1976, Paskas had his wife's name added to the account.
In a letter dated March 29, 1976, Julian Baltakis, through his attorney, requested that Paskas surrender the passbook to him for purposes of making changes in the account. Baltakis cited as reasons for his request that (1) the account did not carry his social security number and he (Baltakis) did not receive any of the records pertaining to earnings; (2) he did not authorize certain recent withdrawals from the account; and (3) he did not authorize the inclusion of Paskas' wife on the account. In April 1976, Baltakis withdrew the funds from the joint account by means of an indemnification agreement signed by himself. The agreement stated that "said account represents savings of the undersigned * * * [and] WALTER M. PASKAS and AGNES D. PASKAS have not contributed any part whatsoever toward said proceeds[;] * * * the names of WALTER M. PASKAS and AGNES D. PASKAS were placed on said account for convenience purposes only * * * [and] the undersigned desires to withdraw said account and make other arrangements with regard thereto, and does not have the passbook pertaining thereto." The $14,293.63 which was then in the account was placed in a second joint savings account with Baltakis' niece (Paskas' sister), Anne Skikas. Baltakis died in March 1978 and Anne Skikas claimed the proceeds of the account by reason of her status as surviving joint tenant. Paskas testified that he first became aware of the withdrawal in January 1977 when he received from Illini and Internal Revenue Service Form #1099 which indicated that the account balance was "0."
On appeal from the judgment for defendant Skikas, plaintiffs contend that the trial court erred in finding that Illini breached no conditions precedent in allowing Baltakis to withdraw funds from the joint account without presenting the passbook. They further contend that Illini misrepresented to Paskas its policy concerning withdrawals without a passbook and that Illini failed in its fiduciary duty to advise Paskas whether the signature card or the terminology appearing in the back of the passbook controlled withdrawals from the account. Finally, plaintiffs assert that defendant Skikas should not be allowed to benefit from the wrongful acts of her uncle and that the court should thus impose a trust in their favor on the proceeds of the account.
• 1, 2 It is well established in Illinois that an agreement creating a joint account governs the rights of the parties thereto (Speasl v. National Bank (1962), 37 Ill. App.2d 384, 186 N.E.2d 84; In re Estate of Gubala (1967), 81 Ill. App.2d 378, 225 N.E.2d 646; In re Estate of Macak (1973), 14 Ill. App.3d 261, 302 N.E.2d 436), and such an agreement will not be limited by internal rules of the bank which have been printed in the passbook. (Speasl v. National Bank.) Plaintiffs contend that presentation of the passbook was a condition precedent to withdrawal from the account and that Illini thus breached its contractual duties by paying funds to Baltakis in the absence of the passbook. Illini's payment, however, was consistent with the parties' agreement as contained in the signature card wherein Illini was authorized to pay out funds from the account "in accordance with writings bearing any one of [the depositors'] signatures." This situation is virtually identical to that addressed in Speasl v. National Bank, where the court stated:
"[T]he joint depositors saw fit to enter into an express agreement with defendants [bank] under which the latter was authorized to pay the deposit to either plaintiff or her mother. The permission or authority thus granted was not limited so as to be effective only when the passbook was presented by one of the depositors. Whatever the rules and regulations of defendant may have provided with reference to production of the passbook when a depositor withdrew money, it did not deprive the parties of the right to expressly agree as to the conditions under which their joint deposit might be paid out by the defendant. Such right was exercised by the joint depositors and the defendant bank." 37 Ill. App.2d 384, 389, 186 N.E.2d 86, 87.
In this case, as in Speasl v. National Bank, the signature card agreement was within the purview of section 2(a) of "An Act to revise the law in relation to joint rights and obligations" (Ill. ...