O'Brien v. Biegger

I am unable to concur in the majority opinion and respectfully dissent therefrom.

The decree of the trial court states that by agreement of the parties the cause was "transferred to equity and to the equity side of the calendar for hearing, trial and determination by the court." The hearing in this court is, therefore, de novo. See In re Estate of Custer, 229 Iowa 1061, 295 N.W. 848, and cases there cited. The trial court ruled that the "claim of the defendant George A. Biegger, to the bank account * * * be and the same hereby is confirmed and established against any and all claims of the plaintiff."

Since the defendant, by pleading and stipulation, admitted that the $5,000, which was the source of the bank account, belonged to the decedent, he had the burden of proving ownership of the account. The fact that he had possession of the funds by a withdrawal did not lessen his burden. Malcor v. Johnson, 223 Iowa 644,273 N.W. 145; Roberts v. Morse, 190 Iowa 1344, 181 N.W. 678. Defendant concedes, and it is the law, that the mere fact that the deposit was one from which both could withdraw while they both lived and the survivor could withdraw after the death of one does not prove ownership of the account in the survivor. Sinift v. Sinift, 229 Iowa 56, 293 N.W. 841, and cases there cited. This would of course be true even though the survivor exercised his withdrawal rights.

The trial court in its written findings concluded "that it was the intention of Myrtle E. Biegger to create a right of survivorship in deposit number 1217 in whichever party survived the other * * *. * * * this conclusion is supported by the record under either the theory of gift inter vivos or under the theory that a contract was entered into between the parties named in the deposit and the Humboldt Trust Savings Bank." The pleaded defense theories of contract and gift inter vivos are not of particular importance, for the intent of Mrs. Biegger at the time she made this deposit is the controlling factor in the case. The theories of gift, contract, or joint tenancy with the right of survivorship are important only insofar as the proof establishing one of the theories might show decedent's intention relative to the deposit. We said in Sinift v. Sinift, supra, at page 62 of229 Iowa, page 844 of 293 N.W.: "* * * this intent is the polar star by which the court must be guided, and that it is a question of fact * * *."

The evidence of decedent's understanding and intentions with respect to the deposit consists largely of the testimony of two bank officials of the depository bank. These witnesses testified about an earlier deposit, No. 807, opened in 1936 in the name of "Mr. or Mrs. Geo. A. Biegger." This deposit was from Mr. Biegger's funds and the assistant cashier of the bank testified that at the time it was opened Mr. and Mrs. Biegger were at his window and that they "* * * asked in case it was put in the two names, as it ultimately transpired it was, if that would protect them in case of the death of either party and I assured them it would." Upon cross-examination the same witness testified with regard to account No. 807: "As I recall it, the matter was discussed whether or not the opening of the account or the deposit in the two names, ``Mr. or Mrs.' that in case one party passed away that the funds would automatically become the property of the other party"; that he told them it would be a joint account with the funds passing to the survivor; that they said that was the information they wanted.

The testimony with regard to account No. 807 becomes important because of what later transpired when the $5,000 deposit was made on April 26, 1940. This is the deposit in question and it is numbered 1217. On the date of this deposit Mr. and Mrs. Biegger were again in the bank, and the teller who waited upon them testified that they brought the passbook for account No. 807 and said they wanted to deposit $5,000 in that account; that he could not recall whether just one of them said that or both. The question arose as to the insurance coverage in excess of $5,000. He did not recall which of them asked the question, but he heard both of them discussing it and he referred them to the assistant cashier and after they talked to him they came back and completed the deposit. They said they wanted the account 1217 handled the same way, in regard to payment, as account 807, so in the event one died the account would go to the survivor:

"That this was specifically talked about, but witness does not remember which one said it. That it was witness' understanding, on the part of the bank, that on the death of either Mr. or Mrs. Biegger, the $5,000 account would be the property of the one surviving. That such was the bank's intention in receiving the account. That witness told them that would be the case."

The assistant cashier related what transpired when he was consulted upon the question relative to the insurance coverage if the $5,000 was deposited in account 807. He told them if they put the $5,000 in a new account labeled "Mrs. G.A. Biegger or G.A. Biegger" it probably would afford this extra protection. He stated that "they talked that over between themselves * * * in his presence * * * and that is what was done." He also testified, "That they said nothing in the witness' presence about the right of either to draw upon the account and nothing about the survivor, in event of death"; that account 807 contained a balance of $3,600 on April 26, 1940.

Mr. Biegger testified that the deposits in account 807 were from his money, and, over objection that he was incompetent under section 11257, he testified that he walked out of the bank on April 26, 1940, with the passbook for account 1217 and that it was his intention "that on and after April 26, 1940" either or both had the privilege of withdrawing at any and all times from account 1217, and "* * * that in the event of death it would go to the survivor, in either case," and that he had "the same intention as to both accounts." He further testified that when account 807 was opened, and at all times up to decedent's death, his intentions "were that it would always be hers, and not have to go through any legal court procedure or waste any time in getting the money, if it was needed * * *" in event he died before his wife. He was then asked the following question: "George, had it not been for your intention and understanding, on and after April 26, 1940, as to the rights of withdrawal and survivorship as you have testified here your intention was, concerning the ``Mrs. or Mr. G.A. Biegger' account, what is the fact as to whether or not you would from then on have made and maintained and carried as you did the other account 807?" To which question he answered: "I would have not."

Mrs. Carrie Young, defendant's sister, told of certain conversations with decedent wherein decedent stated in 1939 that "when she would get her father's estate, that she would put the same trust in her husband that he put in her, in her account." And that in the summer of 1940 decedent said "that things were arranged satisfactory to her and to George as to their account, or their money."

Plaintiff testified that he was appointed administrator of his mother's estate, and, over objection that he was incompetent under section 11257, he related two conversations with his mother relative to the disposition of her property upon her death. The first occurred when he and his mother were returning from his grandfather's funeral. He stated:

"I had been advised while there to ask her to make a will, when they come into an inheritance; and upon our return I spoke to her about it, and she said — Well, she said she would talk to George about it. And the other occasion was during the summer of 1940, after she had received her inheritance. I happened to be up there and I asked her if she had got all settled for the estate and she said she had, and I asked her if she had made any provision by will or anything, so if anything happened, and she said she had, and she said if anything would happen I would receive my two-thirds and George would be coming in for his one-third of the estate; and that is all that was said about it."

Plaintiff also testified that he lived with his mother until her marriage to defendant in 1929 or 1930, and that his mother had toward him the normal love and affection of a mother toward a child.

I. Upon this testimony defendant argues that a contract was proven and that it was the expressed intention in harmony with the contract that the two accounts were joint accounts payable to husband or wife, and upon the death of either the same became the sole property of the survivor by reason of the contract. Defendant argues the contract established by the evidence was that the defendant was to continue and maintain account 807 in consideration of the deposit of account 1217 being made in both names with the right of withdrawal and survivorship. I do not find such a contract established by the evidence. The testimony of the bank officials does not establish any contract. They do testify to certain actions and statements of Mr. and Mrs. Biegger at the time of deposit 1217 which might be consistent with the existence of the contract. But there must of necessity be some evidence that the oral contract was actually made. The defendant did not testify as to the existence of such an agreement with his wife. True, he states that it was his intention and understanding that each could withdraw from account 1217, and in the event of death it would go to the survivor, and that had it not been for his intention and understanding as to the rights of withdrawal and survivorship in account 1217, he would not have made, maintained, and carried account 807. This is no proof of an existing oral contract whereby he agreed to maintain account 807 and his wife agreed to deposit the $5,000 in a joint account with property rights in a survivor. Such evidence sounds in estoppel. The entire record shows a complete lack of any affirmative proof of the contract pleaded by the defendant as one of his theories of defense. Perhaps it would be difficult for defendant to prove the pleaded oral contract under section 11257, but difficulty of proof does not justify its total absence. Because I would hold the defendant has not maintained his burden of proving the contract, I refrain from discussing the contention of plaintiff that maintaining account 807 was in the nature of past consideration which would not support the contract.

II. Defendant argues that upon the whole record there is abundant testimony to show that decedent intended to pass ownership of the account to the survivor either on the theory of gift inter vivos or on the theory that she intended to create a joint tenancy with right of survivorship. Joint tenancy, although recognized in Iowa, is greatly disfavored. In Albright v. Winey,226 Iowa 222, 226, 284 N.W. 86, 88, we stated that there had been no departure from the rule (found in Hoffman v. Stigers, 28 Iowa 302) condemning "``joint tenancies, or at least their common-law incident — the right of survivorship.'" In re Estate of Winkler,232 Iowa 930, 5 N.W.2d 153, recognizes that there can be a joint tenancy in a bank account but the decision points out that joint tenancies are not favored. In the field of real-estate conveyances we find the courts have frequently stated that a conveyance to two persons will convey a tenancy in common unless a "contrary intention" is clearly manifested by the language used. In 14 Am. Jur. 82, 83, section 11, the comment is made that there is some difference of opinion as to whether a joint tenancy can be created by a grant by the owner to himself and another and the writer states:

"Other cases, however, take the view that a joint estate may be thus created where the intention to create it is clear."

In Hruby v. Wayman, 230 Iowa 653, 655, 298 N.W. 639, 640, we stated:

"The language used to express ``a contrary intention' [from tenancy in common] must clearly manifest such intention."

With respect to the evidence necessary to establish a gift inter vivos we need only say that it, too, must be clear and definite. In Bosserman v. Watson, 230 Iowa 627, 639,298 N.W. 804, 810, where the defendant sought to establish ownership of bonds by proof of a gift by decedent to him, we stated:

"The burden of proof was upon * * * the defendant, to prove that Milo Remington during his lifetime gave the bonds in question to her and it is incumbent on her to sustain this burden by clear, convincing, and satisfactory evidence."

See, also, Malcor v. Johnson, 223 Iowa 644, 273 N.W. 145; and 28 C.J. 676, section 82, where it is stated: "* * * it is held that gifts inter vivos are watched with caution by the courts, and that to sustain them the evidence must be clear and convincing * * *." [38 C.J.S. 869, section 67.]

As I have stated, the decedent's intent is controlling, no matter what theory of defense is pleaded. This intent to create a joint tenancy or execute a gift inter vivos must be established by clear, convincing, and satisfactory proof.

My examination of the record leads me to the conclusion that decedent intended that either she or her husband could withdraw all or any part of account 1217 and that after the death of one of them the survivor could withdraw all or any part of the balance of the account. As I have heretofore pointed out, this does not alone show an intent to pass the property interest in the account to the survivor. Defendant admits this, but points to the testimony of the teller of the bank, who testified that the Bieggers wanted account 1217 handled the same way as 807 and that he told them the account would be the property of the one surviving. Defendant also points to the evidence that he had possession of the passbook when they left the bank on April 26, 1940, and the passbook was left in the home when decedent went to California, where she died about a month later. All of this testimony is some evidence that decedent intended that ownership of the account would pass to her husband upon her death. But it is not very convincing in view of other facts and circumstances. The bank officials did little more than relate the provisions of section 9267 of the Code, which provides that bank deposits made in the name of two persons, payable to either, or payable to either or the survivor, can be paid to either whether the other be living or not. As we stated in Sinift v. Sinift, supra, at page 82 of229 Iowa, page 853 of 293 N.W.:

"* * * such legislation was enacted for the protection of banks with respect to the payment of the funds, and does not affect their title to the deposit, or determine the legal rights of the parties thereto as between themselves * * *."

The record shows that defendant played the leading part in the transaction of opening the account. There is some evidence from defendant's own witness that decedent did not consider she had any rights of ownership in account 807. Defendant's sister's testimony of the statement by decedent, "I see that you have access to your husband's account, the same as I do," and "* * * she said * * * when she would get her father's estate, that she would put the same trust in her husband that he put in her, in her account," tends to show that she felt account 807 was defendant's, and that she merely had withdrawal rights in his account which rights she was going to give him in her account. The inquiry of the Bieggers as to whether putting the account 807 in the two names would protect them in the event of the death of either party is consistent with a theory that they wanted to know if the one furnishing the money would be protected.

Upon the whole record I think the defendant has not, by the necessary clear, convincing, and satisfactory proof, sustained his burden of proving the decedent intended the property interest in the account to pass to him. This conclusion is supported by the fact that in the disposition of her property she would naturally recognize the claim of her son to some share of the property that came to her from the son's grandfather. Although the record does not clearly show the extent of her estate, it indicates that decedent owned no other property. It is undisputed that the husband paid the funeral expenses and expenses of her last illness out of his personal funds. To sustain the husband's contention, we must believe that this mother, who bore a natural affection of a mother for her son, intended to absolutely disinherit him. She was not in good health at the time she received this money from her father's estate. In Albright v. Winey, 226 Iowa 222, 228, 284 N.W. 86, 89, where we concluded the language of a conveyance was insufficient to create a joint tenancy, Justice Hamilton, speaking for the court, stated:

"The contention of appellant in this case furnishes a forcible illustration justifying the policy adopted in the State of Iowa disfavoring joint tenancies with right of survivorship. Mrs. Donahue had a husband and a son. It is almost inconceivable that she would undertake to barter away the inheritance of the natural objects of her bounty, her husband and son, taking a gambler's chance that she would survive her brother."

The son testified that his mother said in the summer of 1940, after the deposit was made, that in case anything would happen he would receive his two thirds and George would come in for one third. This testimony could mean that she intended the amount of the account would be disposed of under the statutes of descent as a part of her estate. It negatives an intention on her part to give the property right in the account to defendant.

III. Defendant argues and the majority opinion holds that the son was an incompetent witness who could not be examined with respect to the communication between the son and the deceased, under section 11257, Code of 1939. This section provides:

"No party to any action or proceeding, nor any person interested in the event thereof * * * shall be examined as a witness in regard to any personal transaction or communication between such witness and a person at the commencement of such examination deceased * * * against the executor, administrator, heir at law, next of kin, assignee, legatee, devisee, or survivor of such deceased person * * *."

Previous decisions of this court construing this statute have not allowed the exclusionary effect of the statute to pass beyond its literal language. Because the statute is partly based upon the long-discarded common-law doctrine that interest in the outcome of litigation should render a witness incompetent to testify, it should not have a broad interpretation. A witness should be excluded only when the exact wording of the statute demands it. See Curd v. Wissler, 120 Iowa 743, 746, 95 N.W. 266; In re Estate of La Grange, 191 Iowa 129, 132, 181 N.W. 807. See, also, Wigmore on Evidence, 2d Ed., section 578.

A reading of the statute raises the question of whether the prohibition reaches the situation where the administrator is the plaintiff or the motivating force in the litigation. The statements in some of our earlier cases indicate that the statute applies only when the action or proceeding is "against the executor, administrator, heir at law, next of kin, assignee, legatee, devisee, or survivor of such deceased person." It is stated in Shuman v. Supreme Lodge K. of H., 110 Iowa 480, 482,81 N.W. 717:

"Three elements must exist in order to exclude this testimony under the section mentioned: (1) The matter must be in the nature of a personal transaction or communication; (2) the witness must be a party to the suit, or interested in the event thereof; (3) the action must be against the executor, administrator, assignee, etc."

And in Owens v. Iowa County, 186 Iowa 408, 412, 169 N.W. 388,390, which was a suit for damages for death of plaintiff's intestate, evidence of a party plaintiff as to personal communications between the deceased and his wife was admitted. The opinion states:

"Section 4604 [section 11257, Code of 1939] is not applicable. The evidence was not offered in an action against, but in favor of the administrator."

Again it is stated in In re Estate of Choate, 195 Iowa 715,720, 192 N.W. 857, 859:

"* * * Were appellee and his wife competent witnesses, under section 4604 of the Code, to testify to the alleged oral agreement with testator? It seems to us that there can be no doubt upon this point. Appellee was the executor of the estate, and the proceeding is not, in the language of the statute, ``against the executor * * * or the assignee or guardian of such insane person or lunatic.'"

But in the earlier case of Leasman v. Nicholson, 59 Iowa 259,12 N.W. 270, 13 N.W. 289, it is held that the statute does not prohibit a witness introduced by the executor from testifying for the executor as to personal transactions between the witness and the deceased, even though the executor is defending against a note claim against the estate and the witness may be personally interested in the event of a suit. In a supplemental opinion in this case, at 59 Iowa 263, 13 N.W. 289, this court gave a somewhat fuller discussion of the question presented by the objection urged, and stated:

"The question presented is as to what the word ``against' used in the statute shows the relation between. The plaintiff insists that it shows the relation between the words ``actions' and ``proceeding' on the one hand, and the words ``executor,' ``assignee,' and ``guardian' on the other. According to his construction, the disqualification is not intended to apply in actions brought by an executor, assignor, or guardian, but only in actions brought against an executor, assignee or guardian; and in the latter, it applies as well where the witness is examined in behalf of the executor, etc., as against him. According to the construction which we adopt, the disqualification applies in both classes of cases, but only where the witness is examined against the executor. This construction is without question the more natural one, grammatically considered, and we see nothing in the reason or policy of the law that calls for the other."

Under the construction adopted in the Leasman case or the construction adopted in the Shuman case and followed in the Owens case and also in In re Choate's Estate, the testimony of the administrator would be admissible here unless the defendant is also a member of the protected class. Defendant is not an heir at law of decedent, but under the rule of French v. French, 84 Iowa 655,51 N.W. 145, 15 L.R.A. 300, he is the next of kin within the meaning of this statute. But he is not being sued as next of kin nor is he here basing any claim as next of kin and I would hold the objection is not available to him because of that classification.

We must next consider whether defendant is protected by reason of his being an assignee or survivor. Defendant asserts in pleading and argument that he is an assignee, but we have held that before the witness is incompetent, the objecting party must actually be an assignee of the deceased. In discussing who is an assignee under this statute, in the Shuman case it is stated, at page 482 of 110 Iowa, page 718 of 81 N.W.: "An assignment involves contractual relations." We have previously held that there was no evidence of a contract in this case. And in McAleer v. McNamara, 140 Iowa 112, 114, 117 N.W. 1122, 1123, it is stated:

"A mere allegation that such is the fact [that objecting party is an assignee] is not sufficient, nor is evidence tending to sustain such an allegation alone sufficient, to exclude the testimony of a witness on that particular issue, even though such testimony relate to personal communications and transactions between the witness and the deceased. Any other rule would permit a mere allegation in pleading to take the place of proof, and open the door for all kinds of fraud."

In the same opinion Justice Sherwin stated:

"In my judgment a mere donee should not be held to be an assignee within the intendment of this statute."

Upon the reasoning expressed in the foregoing cases I would hold that the defendant, under the record in this case, cannot claim protection by reason of his being an assignee. Of course, the same rule would apply to the claim of the defendant that he is the survivor. Survivor, as used in the statute, probably does include the survivor of a joint tenancy, but defendant can invoke the objection under the statute only if he is the survivor of a joint tenancy. Whether he is or not is the fact in issue in this case. He can claim no right to the protective objection in an action to determine whether or not he is in the class entitled to the objection. The right to object follows the determination that he is the surviving joint tenant but it does not precede it. Defendant had the burden of proving ownership of the account. To sustain his burden he pleads he is an assignee or the survivor of a joint tenancy. He is not, in the trial, on the issue thus tendered by him, aided by the protective objection which the statute gives to an assignee or survivor. It is my opinion that the defendant who had the burden of proving that he was an assignee or survivor of a joint tenancy could not, in this trial to determine those issues, object on the ground that he is an assignee or survivor and thus bar the testimony of the son as to personal communications with the deceased. I think the majority opinion overrules McAleer v. McNamara, supra.

I am somewhat fortified in my conclusion by the evident intent of the statute. The idea behind the statute is that the interest of the deceased person shall be protected. Because the deceased can no longer deny the claim of an adverse party, the law prevents the adverse party from telling his side of the story. This court said in the case of Blachly v. Newburn, 179 Iowa 790,801, 162 N.W. 36, 39:

"The basis of the rule is that, the dead man's mouth being closed, the law closes the mouth of him who seeks to assert a claim against the dead man's estate, in so far as, in the assertion of the claim, the proof may rest upon personal transactions or communications between him and the dead man."

As we have previously pointed out, the fact that defendant in this case exercised his withdrawal rights after decedent's death is not important. He is the one who is asserting a claim against the decedent's estate. The plaintiff is defending against that claim and making the defense that the deceased could make if she were living. I would reverse.

MILLER, J., joins in this dissent.