#### Rhorbacker, Exr., Appellant, *v.*The Citizens Building Association Co. et al., Appellees.

(No. 28551

Decided May 21, 1941.)

*275*Messrs. Schroth & Schrotb*and *Mr. Walter C. Rborbacker,*for appellant.

*Mr. Roy W. Cbatfield*and *Messrs. Carpenter é Carpenter,*for appellee.

Zimmerman, J.

Under the facts narrated, the Court of Appeals found that a valid contract had been entered into between L. Floy Walker and The Citizens Building Association Company, enforceable by Sceva Sti'nebaugh Walker, and she was accordingly awarded the certificate of deposit and the proceeds represented thereby. The executor contends such determination was erroneous and now asks for a judgment in his favor.

Controversies relating to joint and survivorship bank accounts and certificates of deposit have been before this court a number of times. The latest pronouncement directly on the subject is found in *Berberick*v. *Courtade,*137 Ohio St., 297, 28 N. E. (2d), 636, wherein the other Supreme Court cases dealing with the question are cited.

From a perusal of these cases it will be observed that Ohio has adopted and applied the so-called contract theory as distinguished from the gift or trust theory. See 7 American Jurisprudence, 299 *et seq.,*Section 425 *et seq.*This is the first time, however, a state of facts resembling those in the pending cause has been before us. In the cases heretofore considered, the right of the survivor or the survivors to the deposit has been sustained upon a contract in which all the persons connected with the transaction in some way participated. But as we view it, such participation is not always required.

Here, the relationship of creditor and debtor existed between L. Floy Walker and The Citizens Building Association Company. She directed the latter to take $1,800 from her savings account and convert it into a certificate of deposit payable to herself or Sceva Stine*276baugh Walker or the survivor, and stated that such certificate might be placed in her pass book, all of which was done in consummation of the expressed desire and intent. An executed contract thereby arose between L. Floy Walker and the association, creating an immediate joint and equal interest in the certificate in L. Floy Walker and Sceva Stinebaugh Walker, with the attendant incident of survivorship *(Cleveland Trust Co.*v. *Scobie, Admr.,*114 Ohio St., 241, 151 N. E., 373, 48 A. L. R., 182), and binding the association to its terms. There was no disturbance of the arrangement and Sceva Stinebaugh Walker, as the survivor, became the owner of the certificate and entitled to its possession and benefits by virtue of the completed contract described. Consideration passing between the Walkers was not necessary, and full assent to the contract by Sceva Stinebaugh Walker may be presumed, such contract being one of advantage without burden. *Rogers*v. *Gosnell,*58 Mo., 589. Compare *Harvey*v. *Gardner,*41 Ohio St., 642, 649; *Streeper, Admr.,*v. *Myers,*132 Ohio St., 322, 325, 7 N. E. (2d), 554, 556.

As pointed out in the Wisconsin case of *In re Stover’s Estate, post,*a transaction of the kind involved in the present litigation possesses some of the characteristics of a contract for the benefit of a third person, with respect to which this court has evinced a liberal attitude in allowing the third person to enforce the contract. *Thompson, Admx.,*v. *Thompson,*4 Ohio St., 333, 353; *Brewer*v. *Maurer,*38 Ohio St., 543, 43 Am. Rep., 436; *Emmitt*v. *Brophy,*42 Ohio St., 82, 88; *Royal Indemnity Co.*v. *Northern Ohio Granite & Stone Co.,*100 Ohio St., 373, 126 N. E., 405, 12 A. L. R., 378; 9 Ohio Jurisprudence, 446 to 453, Sections 220 to 222.

We believe the principles enunciated in our own cases and in the following authorities, to which others could be added, support the position taken. *Malone*v. *Sullivan,*136 Kan., 193, 14 P. (2d), 647; *In re Edward’s Estate,*140 Ore., 431, 14 P. (2d), 274, and cases *277therein discussed and cited; *Deal’s Admr.*v. *Merchants & Mechanics Savings Bank,*120 Va., 297, 91 S. E., 135, L. R. A. 1917C, 548; *Wisner, Admx.,*v. *Wisner,*82 W. Va., 9, 95 S. E., 802; *In re Staver’s Estate,*218 Wis., 114, 260 N. W., 655; 1 Restatement of the Law of Contracts, 151, Section 133 *et seq.*Compare, *Eisenhardt*v. *Lowell, Exrx.,*105 Colo., 417, 98 P. (2d), 1001.

Discovering no adequate reason for disturbing the judgment of the Court of Appeals, such judgment is affirmed.

*Judgment affirmed.*

Weygandt, C. J., Williams and Hart, JJ., concur.

Turner and Bettman, JJ., dissent.

Matthias, J., not participating.

Turner, J.,

dissenting. Heretofore this court has considered that a joint bank deposit payable to the survivor did not amount to a testamentary disposition in case of the death of the creator of the account, on the theory that *at the inception of the deposit a contract was entered into beUueen the persons to whom the deposit was made payable.*Tenuous as is that theory, I would now find no fault with following that theory under the doctrine of *stare decisis,*if there had been even the most informal contract between the joint payees to support the holding.

This bourt has followedthe'f oregoing contract theory in a number of cases. However, in the instant case the court goes a-step further than the holding in any prior Ohio case and bases its decision upon the *contract of deposit between the building association and the creator of the deposit.*

This contract theory was first laid down by this court in the case of *Cleveland Trust Co.*v. *Scobie, Admr.,*114 Ohio St., 241, 151 N. E., 373, 48 A. L. R., 182. In that case, the non-depositing joint payee was *278notified in writing of the creation of the joint interest and assented thereto in writing. In the instant case such joint payee was not to be notified until after the death of the one creating the deposit. This non-depositing joint payee had no knowledge of the deposit until after the death of the creator of the deposit.

While the language of the opinion in the *Scobie case, supra,*places the decision of that case upon the theory of a contract between the joint payees whereby the depositor created a present interest in the non-depositor, or joint payee, yet nearly all of the authorities cited were decided upon the theory that when the deposit was made a completed gift of a present interest to the joint payee had been effected.

In the case of *In re Estate of Hutchison,*120 Ohio St., 542, 166 N. E., 687, this court held, in the second branch of the syllabus: “While joint tenancy with the incidental right of survivorship does not exist in Ohio *parties may nevertheless contract*for a joint ownership with the right of survivorship and at the death of one of the joint owners the survivor succeeds to the title to the entire interest, not upon the principle of survivorship as an incident to the joint tenancy *but by the operative provisions of the*contract(Italics mine.)

In the case of *Oleff, Admr.,*v. *Hodapp, Gdn.,*129 Ohio St., 432, 195 N. E., 838, this court held, in the first branch of the syllabus: “A joint and survivorship account entered into *by and between two parties,*as provided by Section 9648, General Code, is a contract *inter vivos,*carrying a *present, vested interest,*and can in no wise be affected by the laws of descent and distribution.” (Italics mine.) Section 9648, General Code, is merely for the protection of the financial institution.

In the case of *Sage, Exr.,*v. *Flueck,*132 Ohio St., 377, 7 N. E. (2d), 802, this court flatly places its decision on the contract theory and in the first branch *279of the syllabus held: “Where a joint bank account is, by the creator thereof, made 'payable to either or the survivor,’ the right of survivorship vests in the joint depositors by virtue of contract.”

In the case of *In re Estate of Fulk,*136 Ohio St., 233, 24 N. E. (2d), 1020, Judge Myers said, at page 239: “The issue here concerns *not tine bcmk*but the contractual relationship of John and Ida Fulk with each other. * * * John Fulk takes by virtue of the contract. *He and Ida Fulk were joint promisees,*each agreeing that the other could withdraw the entire amount.” (Italics mine.)

The latest expression of this court on the subject is to be found in the case of *Berberick*v. *Courtade,*137 Ohio St., 297, 28 N. E. (2d), 636, wherein this court held: “Where a husband and wife have each deposited money in a common fund in a financial institution with a stipulation that it is payable to either or the survivor, such funds, upon the death of the husband, pass to the surviving wife *by virtue of the contract,*and not 'by deed of gift’ and, upon the death of the latter intestate, the distribution thereof is not governed and controlled by Section 10503-5, General Code, commonly known as the half-and-half statute.” (Italics mine.)

In conformity with the foregoing holdings of this court, the financial institutions of this state have provided form agreements which they stamp upon the certificate of deposit or the signature card and cause the joint payees to sign such contract.

In the instant case the record shows that upon issuing the certificate the building association stamped the following up the back thereof: *“We*agree either may draw, and balance at death of either shall be payable to survivor. *Each transfers to the other a present equal undivided interest in this account and all additions thereto,*for our respective lives, balance to the survivor.” (Italics mine.) However, this agreement form was not executed by either of the joint payees *280and consent cannot be presumed and the laws governing testamentary disposition of property thus avoided. It cannot be assumed as a universal proposition that a third person will accept such benefit.

Appellant concedes that if the foregoing agreement had been signed by the joint payees the holding of the Court of Appeals would have been correct under the theory of the *Scobie*and later cases above cited.

While this court has specifically rejected the gift theory, I would be willing to join in an affirmance of the Court of Appeals if there were ■ present in this record the elements necessary to show a completed gift. It cannot be argued that the building association was the agent of the beneficiary-payee for the purpose of receiving delivery of the gift. The building association was the agent of the creator of the fund in the holding of the certificate in the passbook which had been left with the building association for safekeeping.

Counsel for the appellee urge the theory that the deposit in this case amounted to a contract for the benefit of a third party and cite the case of *Mabley & Carew Co.*v. Borden, 129 Ohio St., 375, 195 N. E., 697. The *Borden case*not only lacks similarity in facts but the question of testamentary disposition is nowhere involved in that case. Granting, for argument’s sake, that the deposit in the instant case did create a contract for the benefit of a third party, the record discloses clearly that there was no present or vested interest in the deposit which the third party acquired at the time of the deposit. The interest, if any, created was a future interest to ripen upon the death of the creator of the deposit.

Counsel for appellee also cite Section 710-120, General Code. This section does not apply to building and loan associations. However, like Section 9648, General Code, which does apply to building and loan associations, it is for the protection of the financial institution and creates no new rights between the depositors.

*281There being no contract between these joint payees, or otherwise, by which a present interest *in the deposit*passed from the creator of the deposit to the beneficiary, and there being no completed gift from the creator of the deposit to the beneficiary, the claim of the executor should be upheld and the judgment of the Court of Appeals reversed.

Bettman, J., concurs in the foregoing dissenting opinion.