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Bauer v. Crummy

Decided: July 6, 1970.

JOSEPHINE BAUER AND JEROME J. HARZ, EXECUTORS OF THE ESTATE OF JOSEPHINE HARZ, DEC'D., PLAINTIFFS-APPELLANTS,
v.
ANDREW B. CRUMMY AND JOSEPH R. PURCELL, EXECUTORS AND TRUSTEES OF THE ESTATE OF FRANK J. HARZ, DEC'D, DEFENDANTS-RESPONDENTS



For reversal and remandment -- Chief Justice Weintraub and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. For affirmance -- None. The opinion of the court was delivered by Weintraub, C.J.

Weintraub

This case involves a bank account in the name of a mother and her son, payable to either or the survivor. The mother, Josephine Harz, predeceased the son, Frank. The son died a few months later. The mother's executors brought this action to recover the balance of the account as of the time of her death. On motion, the trial court found the complaint did not state a claim for relief and gave judgment for the son's executors. The Appellate Division affirmed in an unreported opinion. We granted plaintiffs' petition for certification. 54 N.J. 498 (1969).

The matter having been decided on a motion, the allegations of the complaint must be accepted as true and viewed most favorably for plaintiffs. The complaint alleged that the moneys deposited were and remained the property of the mother; that the account was opened on February 2, 1956 for the express purpose and on the express agreement with the son that the account be the depository of her funds and

"that the only interest and function of the said Frank J. Harz in relation to the said deposit account would be and continue to be custodial, so as to enable him to take care of the depositing of the aforesaid moneys * * * and so as to enable him to make withdrawals for her therefrom as she would from time to time direct." The complaint continued that the "purpose and design of the said Josephine in opening the said account in the manner aforesaid with the said Frank J. Harz was for a convenience to herself and to supply a need occasioned by her advancing years and inactivity, respecting the deposit of her income * * * and her making withdrawals * * * to satisfy her requirements therefor"; that the son knew all of this, and that notwithstanding the "statement in the extremest of fine print" in the bank's form purporting to create an immediate joint tenancy with right of survivorship, the son knew the mother "at no time intended that the said * * * joint account was or should ever become a joint account with right of survivorship" in him.

The complaint then alleged that notwithstanding the foregoing, the son "did frequently without cause fail and refuse to comply with the understood and agreed purpose of the said joint account as aforesaid, and did frequently so fail and refuse to comply with the requests of the said Josephine for the withdrawal by him for her and in her behalf of moneys from the said account to satisfy her need and desire therefor." As a result, the complaint charges, the mother in September 1963 opened other bank accounts into which she deposited her income.

The complaint further revealed the will of the mother, which we are advised was executed on June 12, 1963, some seven years after the account in question was opened, purported to dispose of the moneys in the account in these words:

Sixth -- I do give, devise and bequeath all the rest, residue and remainder of my estate, of every kind and description and wheresoever the same may be situate, including moneys on deposit in any bank belonging to me, whether in my name alone, or in my name with that of my son Frank Harz, which money belongs to me, to my daughters

Margaret Maak, Josephine Bauer, and my sons Jerome Harz, Harold Harz and Carlton Harz, and my grandchildren Oriele and Eugene Harz, the two children of my deceased son Eugene Harz, to be divided equally among them. The two children of my deceased son Eugene Harz, to have divided between them the one equal share their father would have received had he survived me.

The complaint alleged the will added:

Eighth -- I have made no further provision under this my will for my son, Frank Harz, not because of any lack of affection for him, but because he has sufficient means of his own.

The trial court held the complaint failed to set forth any basis to overcome the terms of the printed card the mother and son signed when the account was opened. The parties did not consider the further question whether the last will and testament of the mother controlled the disposition of the bank account. We called for argument upon that question.

I

We will consider first whether a depositor's last will and testament may control the disposition of an account notwithstanding the provision in the terms of the account providing for the right of survivorship in another person. The defendants say the will cannot control, and this because of the statute dealing with joint accounts, N.J.S.A. 17:9A-218.

If in fact a joint tenancy with its right of survivorship came into being during the mother's lifetime, of course her last will and testament could not affect the preexisting right of the son to become the sole owner upon her death. Straut v. Hollinger, 139 N.J. Eq. 206, 208 (Ch. 1947); 20 Am Jur. 2d, Cotenancy and Joint Ownership, ยง 3, p. 95. Thus one question is whether the cited statute was intended to constitute the depositor and the donee such joint tenants despite the actual intent of a depositor that title shall remain exclusively in the depositor during the depositor's lifetime,

or whether the statute was intended only to empower the depositor to provide for a gift to the surviving donee effective upon the depositor's death. If the statute was thus intended to permit a gift to take effect upon the depositor's death, then the next question is whether the statute denies to the depositor the power to dispose of that account by a last will and testament notwithstanding that his title to the account was sole and exclusive during his lifetime and hence would, absent a statutory bar, be disposable by his last will and testament.

The answers to these questions emerge from the history of the subject. That history was fully recounted in Howard Savings Institution v. Kielb, 38 N.J. 186 (1962), and Ward v. Marine National Bank, 38 N.J. 132 (1962). We will summarize it for present purposes.

There had been a need for some simple technique whereby the owner of a bank account could retain the sole right to the moneys during his lifetime and yet accomplish a gift of the balance remaining on his death to someone designated on the account to receive it. Conventional legal thinking stood in the way, for a transaction of that kind did not fit into the long established law of wills or the rules relating to gifts. The survivorship provision was testamentary in quality, but the account was not executed with the statutory formalities required of a will. Nor did the transaction come within the concept of a gift causa mortis because the account was not created in the face of impending death. The conventional concept of a gift inter vivos was unsuited because it would lead to an immediate joint tenancy with an equal right of enjoyment in the donee whereas the depositor wanted to be the sole owner as long as he lived. Thus, if the depositor did not intend to part at once with his sole title and enjoyment, ...


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