Xo. 84-417 IN THE SUPIQEMECOURT OF THE STATE OF MONTANA 1985

UNIVERSITY OF MONTANA, Plaintiff

### and Respondent,

MARK COE, TAMERLY D. COE 

### and JORDON COE, Defendants 

### and Appellants.

PEAL FROM: DistrictCourtof the FourthJudicial District, 

### Inand for the Countyof Missoula, The Honorable

### John S. Henson, 

### Judge presiding.

COUNSEL OF RECORD:

ForAppellant: Terry

### Wallace argued, 

### Missoula, Montana

ForRespondent: Morales & Volinkaty; 

### JulioK. Morales argued, Missoula, Montana

Submitted: May 2, 1985 Decided: August 5, 1985

Filed: 

## Rut; .' 

## 1985

Clerk

### Mr. Justice John Conway Harrison delivered the Opinion of the Court.
This is an appeal from the judgment of the District Court of the Fourth Judicial District of the State of Montana, County of Missoula, the Honorable John S. Henson presiding. This case involves an execution on a bank account to recover student loans under the National Direct Student Loan Program. The appellant,Mark D. Coe, a formerMontana University student, took out a series of student loans under the National Direct Student Loan Program, amounting to $6,437.30. For these loans he was required to sign, through the University, 

### a promissory note pursuant to the National Direct Student Loan Program of the United States. He defaulted on the loans and when later requested, made only one payment of $20. The University, respondent herein, brought suit and obtained 

### a partial summary judgment in the sum of $6,437.30. Through one of several executions, the University levied against the joint savings account of Mark Coe at the First Bank-Western Montana, Missoula. The savings account

was in the name of "Tammerly or Mark D. Coe" which at the time of execution had a 

### balance of $3,179.23. Tammerly Coe requested the Bank not to release the funds, claiming that the funds did not belong to Mark Coe, but rather belonged to her and to Jordan Coe, brother to Tammerly and Mark. Pursuant to agreement of counsel, and a stipulation fi1ed

### , plus to avoid the cost of an interpleader by the bank, the funds were deposited with the District Court. A second stipulation was filed to allow intervention by Tammerly Coe and Jordon Coe.Tammerly Coe and her brother, Jordan contend that they deposited themoney inthebank and that theirbrother, Mark, deposited no funds whatsoever. However, one of the exhibits presented tothe District Court was a copy of the signature card of theaccount which listedthe names of Tammerly Coe or 

### Mark 

### D.. Coe, along with their addresses, which stated that Mark was "the owner of 

### a joint savings account with his sister." Jordan Coe did not sign this account, nor does his

name appear on the signature card though he claims he owns $2,000 of the funds in the account. Jordan alleges he gave that amount to Tammerly for safe keeping on his behalf. Tammerly claims the remainder of the funds, less the $2,000 deposited by her brother Jordan, belong toher and thatMark Coe, aspreviously noted, never made a deposit. One basic issue and three sub-issues arepresented for our consideration. Listed asthe basic issue 

### is: (1) Whether thecourt erred indeclaring allthe funds in a joint checking account are subject to execution on a judgment against one joint tenant. Listed asthethree sub-issues are the following: (2) What portion of a joint checking account, if any, 

### is subject to execution on a judgment against one who has signed a signaturecard? 

### (3) Was intent of the co-tenants of a joint checking account a factor indetermining a creditor's right toexecute

a judgment against one co-tenant? (4) What, if any, interests of co-tenants in 

### a joint checking account are subjecttoprotection? As noted inthe respondent's brief this case 

### isone of first impression addressing the question of whether a joint bank account 

### is subject to execution on a judgment againstonly one joint depositor, and if so, towhat extent. The District Court after having examined statutory case law in Montana and elsewhere, as 

### well as the equitable arguments raised, concluded that under the present fact the entire account was subjecttoexecution. The appellants argue that the District Court erred for two reasons. The first reason was that the sole issue that the courtwas todecide, as 

### set forthinthe stipulation, was who owned the money in the account. Based upon that determination, the court was to decide what amount was subject to execution. Appellants allege the affidavit was not supposed to address the issue of intent, as counsel had stipulated. They further allege that the only issue, the only burden that these depositors had, was toshow who owned the money in the account. Tarnrnerly and Jordan submitted an affidavit that 

### set forth whose money was in the account, which theUniversity failed torefute. The second reason was that appellantswere never given

an opportunity to argue the issue of intent. The court looked to the argument outside the stipulation of counsel, which appellants contend constituted error. They claim, under the circumstances of this case, the issue of the judgment creditor's rights to funds in the joint account

never hinged on the issueof intent. We find that the first two issues are the controlling issues in this case. These two issues can be properly restated whether this 

### is a joint tenancy account with right of survivorship, orwhether it 

### is a tenancy in common. Both the appellants and the respondent rely on previous case law in Montana that addresses issues involving joint bank accounts regarding rights of inheritance and inheritance

### taxes. Malek v. Patten (Mont. 1984), 678 P.2d 201, 41 St.Rep. 305; Anderson v. Baker (Mont. 1982), 641 P.2d 1035, 39 St-Rep. 273; In the Matter of Sinclair (Mont. 1982), 640 P.2d 918, 39 St.Rep. 331; Casagranda v. Donahue (1978), 178 Mont. 479, 585 P.2d 1286; Pattersonv. Halterman (1973),161 Mont. 278, 505 P.2d 905; State Board of Equalization v. Cole

(1948), 122 Mont. 9, 195 P.2d 989; In Re Sullivan's Estate (1941),112Mont. 519, 118 P.2d 383. Appellants direct our attention to cases outside this jurisdiction, claiming this particular set of circumstances has not previously been answered by Montana case law. Purma

v. Stark (Kan. 1978), 585 P.2d 991; Walnut Valley State Bank

v. Stova11 (Kan. 1978), 574 P.2d 1382; Yakima Adjustment Services v. Durand (Wash.App. 1981), 622 P.2d 408. Appellants argue these out of state jurisdictional cases state the majority rule. 

### We find that the Montana rule set forth in our case law as to joint tenancy and tenancy in common, represents a more reliable manner of determining questions concerning the ownership of joint accounts. As Justice Sheehy very ably noted in this Court's opinion in Casaqranda v. Donahue, supra, that rule was set forth and reiterated in Ludwig v. Montana Bank & 

### Trust Co. (1939)

## , 109 Mont. 477, 98 P.2d 377, wherein this Court quoted with approval from Hill v. Badeljy (Ca.App. 1930), 290 

### P. 637 at 640: "The question involved in cases of this character is the intention of the parties

# .. . and when such intention is evidenced by a written agreement, as was done in the case at bar, this question of intention ceases to be an issue, and the Courts are bound by the written agreement

# . . . Furthermore

# .

# .

# .parol evidence is not admissible to change the terms of the legal effect of such a written instrument where it is in norespect uncertain orambiguous.'' 98 P.2d at389. In our most recent case, Malek v. Patten, supra, this Court again reasserted that 

### it "preferred" the Montana rule even though the donee/joint owner never signed the signature card. In Montana's cases involving third parties, one joint

owner 

### is truly an owner with an unquestionable right to withdraw the entire funds. It

### isonlywhere onejoint tenant seeks to take advantage of the other without third party rights being affected, that this Court has allowed evidence beyond the joint account signature card and 

### its legal consequences. In the instant case such third party rights are the primary consideration and therefore no extrinsicevidencewas admissible. Mark Coe, Tammerly Coe and Jordan Coe alladmit in their affidavit that Mark was an owner of the joint account. The second issue considerswhether the joint account 

### is distinguished from a traditionalcommon law fractional share, and a creditor of one depositor can execute on the whole account. The statutesthat control inthismatter cover the property and ownership thereof and ownership of joint bank accoun.ts inMontana. That section, 70-1-101, MCA, provides

as follows: "Property defined--ownership. The ownership of 

### a thing 

### is the right of one ormore persons topossess and use 

### it to the exclusion of others. In this code, the thing of which theremay be ownership 

### is calledproperty." Section 32-1-442, MCA, concerning ownership of joint bank accounts inMontana, provides inpertinent part: "When a deposit has been made or shall hereafterbe made inany bank transacting business in this state in the names oftwo ormore persons, payable toeitheror payable toeitherorthe survivor, orany survivor, such deposit, or any part thereof, or any interest or dividend thereon, may be paid to any of said persons whether the other or others be livingornot

# .

# .. " Section 70-1-306, MCA, provides: "Ownership by several persons--types. The ownership of property by several persons 

### iseitherof: 

### "(1)joint interests; 

### "(2) partnership interests; "(3) interests incommon." Aspreviously noted inconsideration of thecontrolling issues in thiscase, numbers 1and 2, thequestion 

### iswhether this 

### is a joint account under our statutory and case law, or

a tenancy incommon with no survivor. This Court inIvins

### v. Hardy (1947), 120 Mont. 35, 179 P.2d 745, held that a tenancy in common 

### is created whenever the instrument bringing an estate of two or more persons into existence does not specifically state that the estate created 

### is other than a "tenancy in common." The facts situation concerning the signing of the signature card in Casagranda v. Donahue, supra, and the facts situation in this case are different. The card signed in the joint account in Casagranda specifically said: "The undersigned hereby open 

### an account in your bank asjoint tenants and not 

### as tenants incommon, and, upon thedeathof either or any of us, allmonies then in this account shall be paid to the survivor or survivors as his, her, or their individual property. All monies hereafter deposited inthisaccount shall likewise be joint tenants and not tenants in common. You are hereby directed to honor checks or orders on this account signed by either or any of us, or survivors of eitherorany of us."Under that facts situation inCasagranda, 

### we held that the savings account became the individual property of respondent upon thedecedent's death. Right of survivorship, which 

### is an essential characteristic of any joint tenancy, cannot be defeated by the executrix of defendant's estate, and any attempt to satisfy the general devises in a 

### will. In the case at bar the signature card signed by Tammerly D. Coe orMark D. Coe noted: "The signature of each person authorized to sign on this account appears on the reverse side of this card and signifies agreement that the account 

### is subject to all applicable rules of this bank now existing or hereafter adopted. I acknowledge receipt 

### of a copy of the Bank's Rules and Regulations Governing Bank Accounts." The reverse side of the signature card had the following notated atthebottom: "The undersigned depositor, whose bank account 

### isdescribed on thereverse side, hereby appoints the person(s) whose specimen signature

### (s) appears above, agent

### (s)of the undersigned with respect to said bank account with the authority specified in the Bank's posted General Rules and Regulations Governing Bank Accounts. l1 We find thatthemajor distinguishingcharacteristic of

a joint tenancy asopposed toa tenancy in common 

### is a right of the survivor of each of the co-tenants. We hold, under the facts of this case, that this 

### is a tenancy in common and that the creditor, University of Montana, 

### is entitled to one-half, not the total amount levied against the account currently being held by the Clerk of the Court of the Fourth Judicial District. Ha.ving decided the first two issues which are controlling, 

### it 

### is unnecessary to consider the remaining issues presented by the respondent, that being whether appellants had failed to establish an intent not to make

### Mark Coe an owner and whether equitable considerations favor the 

### appellants. The 

### judgment of 

### the District Court is modified and remanded with direction to 

### comply with the provisions of this opinion.

### Mr. Justice Frank B. Morrison,Jr., dissenting: I 

### respectfully dissent from what I 

### find to be a 

### bewildering rationale in themajority opinion. In stating the facts, themajority notes: "Through one of several executions, the University levied against the joint savings account of Mark Coe at the First Bank-Western Montana,Missoula." With little explanation, the majority concludes its opinion by finding that the account is not a joint account, but rather a tenancy in common. Apparently, the majority's conclusion rests upon the fact that the signature card did not contain a clear designation of ownership,nor was there a reference to survivorship; therefore, the Court deems the funds in the account to be held by the account designees as tenants in common rather than joint tenants. This is a case of first impression in Montana. In Casagranda v. Donahue (1978), 178 Mont. 479, 585 P.2d 1286, relying on State Board of Equalization v. Cole (1948), 122 Mont. 9, 

### 195 P.2d 989,this Court held that where depositors sign a 

### signature card containingan agreement that the deposit is payable to one of the co-depositors or the survivor, the question of donative intent is settled and the funds in the account are a joint tenancy. However, inboth Casagranda and Cole, one of the people whose names appeared on the signature card had died. This Court made an exception to that rule in Anderson v. Baker (1981), 196 Mont. 494, 641 P.2d 1035. 

### In Anderson, the donor/depositorattempted in her lifetime to divest the alleged joint tenant of any interest in the account. This Court held that the donor/depositorhad exclusive ownership of the funds in the joint account and that the signature card was not conclusive underMontana law. The distinguishing feature from Casaqranda and Cole was thatthe donor/depositor was alive and donative intent was assertainable. In the case at bar, there 

### is no agreement for these funds to be owned in any certain manner. Therefore, the question of ownershipmust remain open. The unrefuted facts inthis case show that the funds in the account 

### were owned by Tammerly Coe and Jordan Coe. Mark Coe, under factswhich arenot contested, had no ownership in the funds. 

### it should be noted that a bank account itself can be held ina differentownership than the fundsdeposited inthe account. Two lawyers may have a joint account aspartners and deposit a client'smoney in the account. Those monies do not automatically become the property of the named account

owners. It 

### istrue that, asbetween thebank and thedepositors, thebank 

### iswithout liabilitywhen 

### it releases funds to those named an the account. However, if the funds in the account belong to another, the account owners must hold the money in trust for the rightfulownpr. 

### In O'Hair 

### v. O'Hair (Ariz. 1973), 508 P.2d 66, the Arizona courtdealtwith a similarquestion. Under the facts of that case, thecourtwas involved indetermining ownership of $150,000 deposited by husband in husband and wife's joint bank account. The court stated: "While asbetween thebank and thedepositor the contract of deposit 

### is conclusive, the 

### mere form of the bank account 

### is not regarded as sufficient to establish the intent of the depositor togive another a joint interest inor ownership of the deposit. Bolton v. Bolton, 306 111. 473, 138 N.E. 158 (1923); Ball v. Forbes, 314 Mass. 200, 49 N.E.2d 898 (1943); Hodgins 

### v. Zabel, 7 Misc.2d 484, 166 N.Y.S.2d 135 (Sup.Ct. 1.957); IndustrialTrust Co. 

### v. Taylor, 69 R.I. 62, 

### 30 A.2d 853 (1943)

# . As the court said in Cashman v. Mason, 72 F.Supp. 487, 492 (D.Minn. 1947):

### "'Joint accounts are a common method of handling funds in a bank as between husband and wife and others for mutual convenience and economy, but without necessarily intending to bestow any present interest in the fund on the one who is joined for the convenience of the ownerof 

### themoneys deposited.' 

### "

## '[TI

### he intention of the depositor is controlling.' McNabb v. Fisher, supra, 38 Ariz. at 295, 299 

### P. at 681." 508 P.2d at 68. Unfortunately, the precedent of 

### this case is incredibly far-reaching and will effectuate absurd results. Despite actual evidence of 

### ownership including the intent of depositors, funds in a bank account are joint tenancy funds if the accountprovides for survivorshipand tenancy in common funds if 

### the account is silent as to survivorship. Under the authority of this case, the ownership of all funds will be automatically transferred to reflect the ownershipdesignated

on the account itself. Although the majority opinion is not clear as to what disposition occurred in the District Court, the fact is 

### that the DistrictCourt allowed executionupon all of the funds in the joint bank account. I would reverse and remand with directions to dismiss.

### Mr. Justice Fred J. Weber dissents as follows: I 

### respectfully dissent from themajority opinion. While this dissent adds no authority, 

### I trust itwill help to raise questions not yet answered 

### by the majority opinion and Justice Morrison's dissent. For clarity in the discussion, following is Exhibit 6,

### the signature card for this account:

r!

CIV /LfS 

### A4 Stata ~&?hone No 7aJ

## - =.\- SoclaiSecur~ty or 5-

### 31

## . ( 

# .. 3 P~J~CCUD~IIO~ Taxpayer Ident. No 7 LJ or Employer First

### Bank(N.A.)-WesternMonlanaMlssoula Ylt.oula, Uontaru69807 Membar FlntBankSyncem

Savln~l0SpeClllSevlngs 0Check~ng Specla1Checklng Con~merclal0T~me Certlficetaa., 0Psnnerrnip 

### uUnlformGilttoM~nora 0Indtvldual 0Soc~ety orOrganizat~on 63Jo~nl 0Truatee CJ MulllpleTrustee I.

Onicer'r Inltlrlr 

## - 2.2-10s

Slpneturar raqulredonallchecksorwllhdrewala I I POWEROf ATTORNEY



### In a 

### number of the decisions of this Court discussing bank accounts, the account cards indicated an express intention to create a joint tenancy with right of survivorship. The foregoing only indicates an intent to establish a "Joint"account. Ttle undersloned deposllor. whose bank aCCOUnl Is de¶crlbad on reverse slda, hereby apuolnts (ha peraon(aJrhoaerpeclmenaignatureIaJapPaars above, aganl(rJoflhaundarrlgnedwllh raapectto rald 

### , bankrccounlw~lh Ihaeuthorlly @pecll~ad IntnaBank'@PostadGanrrrlRularand RagulallonaQovarnlnp 8ankAccounU. 

## cySection 32-1-442, MCA, in substance provides thatwhen a deposit 

### is made payable to either of two persons, such depositmay be paid toeitherof suchpersons, whether 1-iving

or not. As a result, from the Bank's standpoint, this account 

### is treated as a joint tenancy with right of survivorship. Incontrast, 

### S 70-1-307, MCA, insubstance provides that

a joint tenancy 

### is one owned by several persons in equal. sharesby a titlecreated by a singletransferwhen expressly declared in the transfer to be a joint tenancy. The signature card does not contain a declaration of intent to create a joint tenancy. In a similar manner, § 70-1-314 in substance provides that every interest created in favor of several persons 

### is an interest in common unless declared in 

### its creation to be a joint interest as provided in § 70-1-307, MCA. These code sections suggest that the account inquestion should be classed asa tenancy incommon. However, in Marshall 

### v. Minlschmidt (1966)

### , 148 Mont. 263, 419 P.2d 486, this Court concluded that a brand with an "or" designation established a joint tenancy. Following 

### is the form of ownership and conclusion of theCourt: "The ownershipof thebrand asof December 7, 1954, was inthe name of 'Wm. L. orEtta M. Minlschmidt or Vern Field 

# . . . Then, on July 10, 1958, during the deceased's last il lness, the brand was transferred to the names of 'Wm. L. or Etta M. Minlschmidt

# .. .'

"The recorded brand signifies a joint 

### interest in thebrand, the severalpersons having equal shares. Section 67-308, R.C.M. 1947. [Now 

### S 70-1-307, MCA. ] I' Marshall was subsequently followed by this Court in First Westside Nat'

### 1 Bank v. Llera, Tynes & Fisher (1978)

## , 176 Mont. 481, 580 P.2d 100. There the Court concluded that following Marshall, in Montana an ownership document showing 

### title in two or more persons "and/orV has the effect of creating a joint tenancy estate with right of survivorship. This applied to personal property, not real estate. TheCourt then considered the nature of the interest of a joint tenant injoint tenancy property and referred towhat 

### isnow 

### S 70-1-307, MCA, to conclude that the effect of the statute 

### is toinclude allof the incidents of a joint tenancy estate atcommon law. The Court then stated: "Thus, accepting the 'and/or1 

### title as having created a joint tenancy in this case, the legal result 

### is that Allen R. Llera owned an equal share in the automobile, and the right of survivorship with hismother." The foregoing caseshave not been overruled. Based on the foregoing authority, I conclude that 

### we must class the present bank account as a joint tenancy bank account, with each of the two account holders having allof the rightsof joint tenantswith.rightof survivorship. Our next consideration 

### is the effect of the levy of execution upon the interest of Mark D. Coe in the joint account. As pointed out, § 32-1-442, MCA, clearly gives to Mark D. Coe the right towithdraw allof the funds from 

### time to 

### time in the account, and obligates the Bank to pay any amounts drawn from the account by him. That code section was construed inLudwig 

### v. Montana Bank & Trust Co. (1939), 109 Mont. 477, 98 P.2d 379, where the Court was faced with the withdrawal of all of the funds from an account by one joint partywithout the consent of the other. The Court citedwith approval Hillv. Badeljy, 117 Cal.App. 598, 290 P. 637, 640 stating: 

## "'The question involved in cases of this character 

### istheintentionof the partiesmaking thedeposit, and where such intention 

### is evidenced by a written agreement, as was done in the case at bar, this question of intention ceases to be an issue, and the courts arebound by thewritten agreement

# . . . Furthermore, in any action between the depositors orthebank duringthe 

### lifetime of both depositors, in the absence of fraud ormistake, par01 evidence 

### is not admissible tochange the 

### terms of the legal effect of such a written instrument where 

### it is in no respectuncertain orambiguous.'" There 

### is no evidence inthe record to indicate any contrary intenton thepart of theparties.I would conclude that the execution creditor can properly attach allof the funds in the bank account in the

same manner that 

### Mark Coe could have withdrawn all of the funds from the same account.

The undersigned Justice William E. Hunt, Sr. joins in the foregoing dissent. 

# /

---- Justice