Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 85 C 499-James B. Parsons, Judge.
Before CUMMINS, Chief Judge, and POSNER and EASTERBROOK, Circuit Judges.*fn*
The plaintiff, Joann Wood, married Jeffrey S. Prentice on April 8, 1984, and 11 days later they established with the defendant, Jack Carl Associates, Inc., an account for trading commodities futures. Both spouses signed the agreement in the place for customer signatures. A few days later Joann Wood deposited $70,000 of her own money in the account; her husband made no deposited. Jack Carl Associates acknowledged the deposit in a statement of account addressed to "Jeff and Joann Prentice." A few days later Prentice wrote Jack Carl that "For tax purposes-my trading acct....should be in my name only.... However, for right of survivorship, ... my wife should receive the acct." This letter was written without the knowledge of his wife. Jack Carl Associates changed the name on the account as directed. The next month, at Prentice's direction, Jack Carl Associates made two disbursements to Prentice, one for $20,000 and the other for $50,000, thus emptying the account. Joann Wood was not notified. Prentice later absconded with the money. Joann Wood obtained both a judgment for the full amount against Prentice and an annulment of the marriage, but, the judgment being uncollectable, she brought this diversity suit for $70,000 against Jack Carl Associates. The suit charges conversion, and points out that nowhere in the customer agreement is there authorization either to change the name of the account or to pay money out of it without the authorization of all the customers who signed the agreement. The district court, however, dismissed the complaint for failure to state a cause of action, and Mrs. Wood has appealed.
The district court reasoned as follows. At common law, Joann and Jeffrey would be joint tenants, and each therefore would have an undivided right over the whole account and could withdraw the whole thing; and no statute has altered the common law. Her argument rather is that the statute made her and her husband tenants in common rather than joint tenants, so that their rights in the account were in proportion to their contributions-which means she owned the whole thing.
The statute, Ill. Rev. Stat. ch. 76, P 2, provides that unless there is a "writing expressing an intention to create a joint tenancy in personal property with the right of survivorship"-and no one construes the customer agreement to be such a writing-"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," with certain exceptions, of which only one is relevant here, in subparagraph (c):
When shares of stock, bonds, or other evidences of indebtedness or of interest are or have been issued in the joint names of two or more persons or their survivors by corporations, including [state and federal savings and loan associations and credit unions], all payments on account thereof made then or thereafter, redemption, repurchase or withdrawal value or price, accumulations thereon, credits to, profits, dividends, or other rights thereon or accruing thereto may be paid or delivered in whole or in part to any of such persons whether the other person or persons be living or not, and when an agreement permitting such payment or delivery is signed by all said persons at the time when the shares of stock, bonds or evidences of indebtedness or of interest were issued or thereafter, the payment or delivery to any such person, to whom any such payment or any such delivery of rights is made, shall be a valid and sufficient release and discharge of any such corporation for the payment or delivery so made....
There is no reported decision construing this provision in a respect pertinent to this case, no published legislative history, and no similarly worded statute in any other state.
The absence of the usual aids to statutory interpretation would be no problem if the statute were clear, but it is not. The problem comes from the words "and when" which introduce the last clause of subparagraph (c). The language before those words, which was the language that the district judge relied on in dismissing the complaint, states as clearly as words can do that when a bank or other financial institution such as a commodities broker issues an evidence of indebtedness in the names of two persons jointly, as it did here when it acknowledged receipt of Mrs. Wood's money, it can thereafter pay all or part of the money to either of the persons named on the demand of that person. There is no statutory authorization to change names on the account, and this could make a difference in another case; but, for reasons which will appear, we shall not have to explore this issue in this case.
Mrs. Wood argues that the first half of subparagraph (c) merely authorizes payment subject to whatever liabilities to the joint owner such payment might impose. But this cannot be right. The laws of nature, not the laws of man, determine the physical capacity of jack Carl Associates to issue a check to a joint account beneficiary; the only purpose of the statute can be to make that issuance a lawful act. The clause that follows "and when," however, makes payment to one of the beneficiaries operate as a release or discharge of the bank's liability to the other beneficiaries, provided the agreement establishing the account (or some later agreement) authorized payment to one beneficiary without the consent of the other(s), and the agreement here did not. Thus the statute is inconsistent. First it authorizes payment to one joint owner without any formalities, and in the next breath it authorizes the same thing if there is an express writing to that effect
The statute dates back to 1917. Originally it read:
That if partition be not made between joint tenants, the parts of those who die first shall not accrue to the survivors, ... provided that when a deposit in any bank or trust company... has been made or shall hereafter be made in the names of two or more persons, payable to them, jointly or severally evidenced by a writing signed by them when the account is opened, 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; When an agreement permitting such payment is signed by all said persons at the time the account is opened or thereafter and the receipt or acquittance of the person so paid shall be valid and sufficient discharge from all parties to the bank for any payments so made.
1917 Ill. Laws 557-58. This is not a very happily drafted statute, to say the least; in particular there is no main clause to which the subordinate clause introduced by "When" relates. This grammatical confusion can be eliminated, however, simply by moving "and" from before "the receipt" to before "When"; and that is what the legislature did two years later. See 1919 Ill. Laws 634. subparagraph (c) of the current statute differs from the 1919 version (so far as material here) only in deleting "payable to them, jointly or severally" in the first clause; it is enough that the account was opened in more than one name.
The idea behind the original statute was evidently to permit a joint tenancy in a bank account provided the depositors had expressly authorized payment to any of them (hence "payable to them, jointly or severally"-we assume the comma was meant to go after "severally" rather than after "them," as "jointly or severally evidenced" makes no sense); the ungrammatical fragment following the semi-colon was designed to emphasize this requirement. Later the legislators discovered that the fragment didn't parse. But in correcting their grammar by moving the word "and" they replaced grammatical with semantic confusion, reinforced by the deletion of "payable to them, jointly or severally" which, though probably motivated simply by the felt redundancy of these ...