No. 83-161 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1984 

MERTON G. MALEK, and ROBERT L. PATTEN, 

Plaintiffs and Appellants, 

DONALD PATTEN, and FIRST NATIONAL 

BANK OF GREAT FALLS, 

Defendant and Respondents. 

APPEAL FROM: District Court of the Eighth Judicial District, 

In and for the County of Cascade, 

The Honorable Joel G. Roth, Judge presiding. 

COUIJSEL OF RECORD: 

For Appellants: 

Alexander & Baucus; Nancy S. Peterson argued 

for Robert Patten, Great Falls, 

Edward Alexander argued in rebuttal for Robert 

Patten, Great Falls, Montana 

For Respondents: 

Jardine, Stephenson, Blewett & Weaver; James E. 

Aiken argued for First National Bank-Great Falls, 

Great Falls, Montana 

Church, Harris, Johnson & Williams; R. Keith Strong 

argued for Donald Patten, Great Falls, Montana 

submitted: November 17, 1983 

Decided: February 27, 1984 

Clerk 
Mr. Justice Fred J. Weber delivered the Opinion of the Court. 

Plaintiffs appeal from the judgment of the Eighth 

Judicial District Court, Cascade County, which found 

defendant Donald W. Patten wa.s entitled as joint tenant to 

three certificates of deposit and joint checking account 

funds. We affirm the judgment of the District Court. 

The issue on appeal is whether Ella D. Patten created 

valid joint tenancies in a joint checking account and 

certificates of deposit payable to "Ella D. Patten or Donald 

W. Patten." 

On December 13, 1965, Ella D. Patten (Ella) purchased 

with her own funds Certificate of Deposit No. 3379 from 

defendant First National Bank of Great Falls (First National) 

in the amount of $10,000. The certificate was issued in the 

name of "Ella D. Patten or Donald W. Patten . . . payable to 

said depositor, or, if more than one, to either or any of 

said depositors or the survivor or survivors . . .. " The 

signature card executed at the time of purchase was signed 

only by Ella. In place of the other joint tenant's signature 

appeared notations stating "refused to obtain other 

signature" and "make sure of identification." 

On December 3, 1969, Ella purchased with her own funds 

two additional certificates of deposit, Certificate No. 12682 

and Certificate No. 12683, each in the amount of $10,000. 

These certificates were also issued payable to "Ella D. 

Patten or Donald W. Patten" or the survivor. The signature 

cards were signed only by Ella. 

From the date of purchase of these three certificates, 

until her death, Ella received all interest payable on the 

certificates. None of the certificates was physically 

delivered to Donald during Ella.'s lifetime and until after 

Ella's death, Donald had not seen the certificates. However, 

the certificates were delivered by Ella to a safe deposit box 

at Northwestern National Bank of Great Falls. Donald was a 
joint tenant in the box and his signature appears on the 

signature card. Prior to Ella's death, only Ella had entered 

the safe deposit box, although Ella had told Donald to enter 

the box if something should happen to her. The certificates 

were located in the box at the time of Ella's death. 

On July 10, 1970, Ella opened checking account No. 

5002-50152-1 at First National. The account was designated a 

joint tenancy account with right of survivorship. The 

account was in the name of "Patten, Ella D. or Donald W." 

The joint account signature card was signed only by Ella. 

This account was still in existence at the time of Ella's 

death, with a balance of $46,587.16. Only Ella had 

transacted business on the account prior to her death. 

Ella died on September 13, 1973. Soon thereafter, 

Donald went to Northwestern Bank of Great Falls and was 

granted access to the safe deposit box as one of the two 

named joint tenants, even though he had no key to the box. 

Donald removed the three certificates of deposit and later 

presented them for payment to Washington Federal Savings and 

Loan Associat.ion in Seattle, Washington. Washington Federal 

forwarded the certificates to First National for payment. 

First National remitted the proceeds plus accrued interest to 

Washington Federal for credit to the account of Donald W. 

Patten. On Donald's signature, the checking account funds 

were also withdrawn from First National and received by 

Donald. 

After two successful challenges to Ella's wills by 

plaintiff Robert Patten, the District Court found Ella 

intestate and appointed a personal representative, plaintiff 

Merton Malek. See Patten v. Patten (1976), 171 Mont. 399, 

558 P.2d 659; Estate of Patten (1978), 179 Mont. 299, 587 

P.2d 1307. Plaintiffs now seek to recover $76,587.16, 

consisting of $30,000 from the three certificates and 

$46,587.16 from the joint checking account. The District 
Court found that the certificates and checking account were 

owned by Donald and Ella as joint tenants with right of 

survivorship and that all funds were properly paid to Donald 

as survivor. Judgment was entered for defendants and 

plaintiffs appeal. 

Appellants argue that Ella did not establish valid joint 

tenancies in the certificates or checking account. They 

argue that the absence of Donald's signature on signature 

cards for the certificates and checking account and his lack 

of specific knowledge relating to the account and 

certificates precluded establishment of valid joint tenancies 

by contract or gift. We disagree. 

In State Board of Equalization v. Cole (1948), 122 Mont. 

9, 195 P.2d 989, and Casagranda v. Donohue (1978), 178 Mont. 

479, 585 P.2d 1286, this Court applied a gift analysis to 

resolve disputes concerning ownership of similar assets. In 

both cases, we applied the rule that a written agreement 

controls the issue of intent to make a gift: 

-- 

~avable to either of - the co-de~ositors 7 or - the 

survlvor settled - thr question - o-donative - 

intent of the donor to make a gift in joint 

tenancy." Cole, 122 Mont. at 15, 195 P.2d at 992, 

citing In re Sullivan's Estate (1941), 112 Mont. 

519, 118 P.2d 383 (emphasis added). 

"Cole stood for the proposition that, in Montana, 

signing a signature card containing an agreement 

-- that the deposit - ispayable - to either - of - the 

co-depositors -- or the survivor settles the question 

- of donative intent to make a joint tenancy. 

Appellant cites an Arizona decision . . . wherein 

it was held that the mere form of a hank account is 

not regarded as sufficient to establish the intent 

of the depositor to give another a joint interest 

in or ownership of it. We find the Montana rule 

represents a more reliable manner for determining 

questions concerning the ownership of joint bank 

accounts. This should not be mistakenly understood 

to mean we have no concern for the depositor's 

intentions. Intention is clearly expressed -- on the 

--- face of the sicmature caTd. Additional evidence is 

unnecessary. " tasagranda, 178 Mont. at 483-84, 585 

P.2d at 1-288 (emphasis added). 

In Anderson v. Baker (1982), 196 Mont. 494, 641 P.2d 

1035, we held that where a depositor during her lifetime 
raised the issue of ownership of funds in a joint account, 

the statements on the signature card were not conclusive and 

evidence of intent to terminate the joint tenancy was 

admissible. The factual basis of the holding in Anderson was 

the depositor's written demand for the return of passbooks 

and certificates and a subsequent lawsuit filed by the 

depositor. 196 Mont. at 497, 641 P.2d at 1036. his case 

presents no similar facts. Ella did nothing during her 

lifetime to demonstrate an intent to terminate the joint 

tenancies. 

In this regard, appellants place great emphasis on the 

fact that Donald did not sign the signature cards and that he 

had no specific knowl-edge of the accounts. They reason that 

Ella's failure to obtain Donald's signature or tell him of 

the accounts demonstrates a lack of intent on her part to 

make a gift. However, this approach places greater emphasis 

on an omission than upon an unequivocal act clearly 

expressing her intent. These facts are insufficient to show 

an intent not to give Donald a joint interest in the 

certifi-cates and account. These facts are also insufficient 

to show an intent to terminate existing joint tenancies as in 

Anderson. 

We hold that absent evidence of intent to the contrary, 

the joint account agreements and signature cards signed by 

Ella Patten establish her intent to make a gift. 

Appellants further attempt to distinguish Cole and 

Casagranda with respect to the gift delivery requirement. 

They contend that because Ella refused to obtain Donald's 

signature or inform him regarding the account and 

certificates, she failed to relinquish control over them. 

However, the delivery requirement is met if the donor creates 

in the donee a co-equal right to exercise control over the 

deposits. Cole, 122 Mont. at 16, 195 P.2d at 993. Ella 

deposited the money under agreement that Donald had a right 
to withdraw the money or cash the certificates. In Cole, we 

stated that it is irrelevant that the right might prove to be 

of no pecuniary value. "'No act of [the donor] could defeat 

the right, although she might render --- it of no value. ' " 122 

Mont. at 16, 195 P.2d at 993, quoting Burns v. Nolette 

(1929), 83 N.H. 489, 144 A. 848 (emphasis added). Donald had 

a right to exercise control over the account and 

certificates, even though Ella may have rendered it valueless 

by failing to inform Donald of the details. 

Most authorities take the position that the opening of a 

joint account with an agreement such as the one signed by 

Ella Patten j.s sufficient to satisfy the delivery 

requirement, so long as done with the requisite intent. 

Brown on Personal Property 183 (3d ed. 1975) . We recognized 

that a formal or informal written agreement is sufficient to 

accomplish delivery, in Faith Lutheran Retirement Home v. 

Veis (1970), 156 Mont. 38, 473 P.2d 503. There, a valid gift 

was found where the donor executed an instrument sa-ying he 

wished to give a certain sum of money to the donee and that 

it could be collected from his estate if not demanded sooner 

or paid. 156 Mont. at 39-40, 473 P.2d at 504. We reasoned 

that writings serve the same purpose as actual delivery in an 

oral gift: preclusion of unfounded claims and authentication 

of the gift. 156 Mont. at 44, 473 P.2d at 506. 

Ella Patten's intent was clearly expressed on the face 

of the deposit agreements. These agreements are sufficient 

to accomplish her purpose. Moreover, signature cards are 

protective devices employed by banks to assure that the 

person transacting business with the account is actually the 

person named in the deposit agreement. So long as Donald was 

designated a joint tenant in the deposit agreement, lack of 

his signature on the card does not affect his rights as set 

forth in the deposit agreement. 
Appellants have presented no authority for the 

proposition that a donee must sign the document which creates 

a gift or must know the details of the gift. The general 

rule is that acceptance of a gift is presumed. See Stagg v. 

Stagg (1931), 90 Mont. 180, 188, 300 P. 539, 543; 38 Am.Jur. 

2d Gifts sections 34 and 35. Donald did nothing to repudiate 

the gifts. We find no legal significance in the absence of 

Donald's signature on the signature cards or lack of specific 

knowledge concerning the account and certificates. 

Stringent application of gift theory elements as urged 

by appellants ignores the reality of modern practice relating 

joint and survivorship bank accounts. Modern commercial 

practice relies heavily upon contractual theory rather than 

gift theory. The Legislature has recognized the validity of 

joint bank accounts and certificates of deposit based upon 

contractual principles. See section 72-1-110, MCA and 

comment; section 32-1-442, MCA. The Legislature has 

recognized the validity of the contractual relationship 

involved in these transactions by relieving banks of 

liability for paying the proceeds of such accounts according 

to the t.erms of the contract: 

"Joint deposits - survivorship. (1) When a deposit 

has been made or shall hereafter be made in any 

bank transacting business in this state in the 

names of two or more persons, payable to either or 

payable to either or the survivor, or any 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 living or 

not. The receipt or acquittance of the person so 

paid shall be a valid and sufficient release or 

discharge to the bank for any payment so made. 

" (2) The term 'deposit' shall include certificates 

of deposit heretofore or hereafter iss~zed." 

Section 32-1-442, MCA. 

While this statute does not expressly vest title to account 

proceeds, it a-pproves payment to the surviving joint tenant. 

This is precisely the position of First National in this 

case, which has delivered funds to Donald in accordance with 

the contracts. 
A case emphasizing this contract relationship is Estate 

of Panning (Ind. 1975), 333 N.E.2d 80. The depositor, with 

her own funds, purchased certificates of deposit as joint 

tenant with another person who signed nothing and knew 

nothing of the certificates' existence until they were found 

in a safe deposit box after the depositor's death. The 

Indiana Court applied the Restatement of Contracts provision: 

'' (1 Where performance of a promise in a contract 

will benefit a person other than a promissee, that 

person is . . . 

" ' (a) A donee-beneficia-ry, if it appears from the 

terms of the promise in view of the accompanying 

circumstances that the purpose -- of the promise . . . ---- is to make a gift to -- the beneficiary -- or to confer 

upon him a right against the promisor -- to some 

performance neither due nor supposed nor asserted 

to be due from the promisee to the beneficiary . . .. '" Estate of Fanning, 333 N.E.2d at 83, 

quoting ~estatementof Contracts section 133 (1932) 

(emphasis added) . 

The Indiana Court expressly found that the donee's lack of 

knowledge of the certificates did not affect the validity of 

the gift. 333 N.E.2d at 83-84. 

The Court concluded that: 

"We have adopted * the contract theory instead of the 

gift theory . . .. - The elemental requirements of 

the gift theory -- tend to frustrate the intent -- of t& 

donor. --- Some of the requirements - in particular 

the delivery requirement - defy the usual donor's 

inclination. Other jurisdictions have adopted the 

contract theory. We are impressed with and 

persuaded by the apparent success of the contract 

theory in these jurisdictions." 333 N.E.2d at 

85-86 (footnotes omitted) (emphasis added) . 

We note that the Legislature has essentially adopted the 

contract theory. We approve the contract theory as described 

in Estate - of Fanninq. This theory provides an additional 

basis upon which to affirm the District Court's judgment in 

this case. 

Further, the certificates of deposit were kept in a safe 

deposit box in the name of Ella or Donald Patten. Donald had 

signed the signature card for the safe deposit box. Section 

70-1-308, MCA provides: 
"Safe de~osit box - ioint tenancv. When so 

specifiedL in the agreement granting for a term 3 2 .' 

-- 

time the right in two or more persons to use or 

occupy any safe or box, commonly referred to as a 

safe deposit vault or box for the safekeeping of 

valuables, such interest and estate created in the 

grantees shall - be - a joint tenancy in such vault or 

box and - pass -- to the survivors and survivor upon the 

death of one or more of the joint tenants with 

right in such survivors and survivor -- to have access 

-- to and ~ossession -- of such vault ---- or box and the 

contents thereof under - the terms -- of the agreement." 

(emphasis added) 

This statute ma-kes it clear that the contents of the box are 

property of the surviving joint tenant. The statute places 

express reliance on the agreement relating to the box, not 

upon who has the key. This provision, together with the fact 

that the certificates were in the name of "Ella D. Patten or 

Donald W. Patten" establishes Donald's ownership of the 

certificates. 

We hold that Ella Patten created joint tenancies in 

favor of Donald in the checking account and certificates of 

deposit under gift or contract theory. We therefore affirm 

the judgment of the District Court. 

We concur: 

Chief Justice 

Justices a1 

District Judge, sitting in 

place of Mr. Justice 

Frank B. Morrison, Jr. 
Mr. Justice John Conway Harrison dissenting. 

I dissent. This Court found valid Totten Trusts in 

State Board of Equalization v. Cole (1948), 122 Mont. 9, 195 

P.2d 989. In Cole, supra, the state tried to impose 

inheritance taxes upon assets in the decedent's joint 

savings accounts, and series "G" United States Savings Bonds 

held in joint names. This Court found the assets in the 

joint bank accounts transferred to the co-depositor not 

subject to tax, however the bonds were subject to the tax. 

The funds in the joint bank accounts transferred as inter 

vivos gifts because delivery, intent and acceptance occurred 

during the decedent's lifetime. Intent is established by 

signing a signature card containing an agreement that the 

deposit was payable to either of the co-depositors. This 

Court reasoned that joint bank accounts vest an inter vivos 

gift because of the co-depositor's right to withdraw funds 

at any time. The bonds failed to transfer as inter vivos 

gifts because even though the bonds were payable to the 

decedent or another party, delivery never occurred because 

she exercised complete control over them. She kept them in 

a safety deposit box and "none of the alternate payees ever 

had access to this safety deposit box or even attempted to 

exercise control over the bonds." 122 Mont. at 21, 195 P.2d 

at 995, 996. 

In Casagranda v. Donahue (1978), 178 Mont. 479, 585 

P.2d 1286, we found joint bank accounts again to be joint 

tenancy of the funds with right of survivorship. Funds in 

the accounts became individual property of surviving 

depositor and are not part of the estate. In Casagranda, 
supra, the decedent established joint savings accounts with 

the respondent. The executrix of the estate sought to quiet 

title on the joint bank accounts and included those funds in 

the estate. We cited Cole, supra, saying "the signing of 

the signature card payable to either of the co-depositors or 

the survivor, settles the question of donative intent to 

make a joint tenancy." 178 Mont. at 483, 585 P.2d at 1288. 

Those deposits passed to the co-depositor by right of 

survivorship. In both Cole and Casagranda, the surviving 

co-depositors signed the signature cards along with the 

decedents. 

In Anderson v. Baker (1982), 196 Mont. 494, 641 P.2d 

1035, this Court again used gift theory analysis to "hold 

that where, as here, a depositor during his or her lifetime 

raises the issue of ownership of funds in a joint tenancy 

account, the statements on the signature card are not 

conclusive and additional evidence may be examined to 

ascertain the true intent of the parties." 196 Mont. at 

500, 641 P.2d at 1038. Anderson, supra, involved a decedent 

who during her lifetime established a joint savings account 

and C.D.s with the respondent. Just prior to her death, she 

sought to regain exclusive control over the accounts, by 

commencing action for the return of her passbook on the 

savings account and the C.D.s for the removal of the 

respondent's name. We held that the filing of the action to 

regain exclusive control of the accounts during the 

decedent's lifetime, cut off the respondent's right of 

survivorship. Therefore, the deposits were part of the 

estate. 

In the instant case, Ella Patten established several 
joint accounts but refused to relinquish control over these 

deposits. She never sought signatures from the respondent, 

nor informed him of the existence of these joint accounts. 

She remained secretive of all her financial dealings. 

I distinguish the instant case from Cole and 

Casagranda for the following reasons: in both Cole and 

Casagranda, all parties executed signatures on the signature 

cards; and all of the depositors listed on the accounts knew 

of the existence of the accounts and could withdraw any and 

all of the deposits at any time. In the instant case, 

respondent did not sign the signature card. The lack of 

knowledge of these accounts precluded any withdraw1 by 

respondent of any deposit from the accounts. I would hold 

that these joint accounts failed to create a joint tenancy 

of the funds because Ella Patten failed to make a valid 

inter vivos joint tenancy account Totten Trust. Therefore, 

the funds withdrawn by respondent out of the account are 

part of the estate and not individual property. 

Respondent contends that the agreement between the 

bank and Ella Patten made him a third party beneficiary. 

Respondent cites Ludwig v. Montana Bank and Trust Co. 

(1939), 109 Mont. 477, 98 P.2d 379, for the proposition that 

a contract between the bank and joint depositors creates a 

power to draw upon the funds by either depositors and that 

the bank must honor this contract. This power remains valid 

even after the death of a co-depositor. While this power to 

draw existed in Ludwig, supra, because both depositors 

signed the signature card and had access to the account, it 

did not exist in the instant case. Respondent's power to 

withdraw these funds never existed during Ella Patten's 
lifetime. She effectively precluded that by withholding 

information from respondent about the existence of these 

accounts, the possibility of control can not occur without 

knowledge. Respondent asserts this is a clear case of a 

third party beneficiary contract. However, Ella Patten 

never demonstrated or presented intentions to create a third 

party beneficiary contract for Donald. She demonstrated 

only an intended future interest in the accounts and not a 

present interest. This makes the transaction testamentary 

in nature. 

Respondent contends Seavey v. Fanning (Ind. 1975), 333 

N.E.2d 80, represents a better approach to resolving the 

validity of Totten Trusts. The Indiana Supreme Court found 

valid survivorship rights in C.D.s, that the decedent 

(Fanning) established in her name and the name of another 

person (Seavy), in joint tenancy with the right of 

survivorship. Fanning controlled the C.D.s in a lock box 

without informing Seavey of their existence. The Indiana 

Court applied third party beneficiary theory to establish 

Seavey's right to collect the proceeds from the C.D.S. This 

theory avoids the problem of the delivery requirement of 

gift theory. It retains the intent requirement but presumes 

delivery even if the beneficiary lacks any knowledge of 

joint accounts. The court found "a gift in praesenti of a 

contingent contractual right." I reject this rational and 

believe gift theory is the proper approach to take. 

Respondent asserts under gift theory, Ella Patten 

properly created joint tenancies with right of survivorship. 

He contends the signature card settled the issue of 

intention. Delivery occurred by the creation of the written 
agreement to establish joint accounts, acceptance can be 

presumed . 

I agree that signing a signature card creates the 

presumption of intent. "Cole stood for the proposition 

that, in Montana, signing a signature card containing an 

agreement that the deposit is payable to either of the 

co-depositors or survivors settles the question of donative 

intent to make a joint tenancy." Anderson, 196 Mont. 494 at 

499, 641 P.2d at 1038. Casagranda, 178 Mont. at 483, 585 

P.2d at 1288. Respondent claims Ella Patten completed 

delivery by the written agreement (the signature card). I 

disagree. 

In Anderson this Court said: 

"We are also mindful that the signature 

cards are forms containing language 

drafted by the depository institution. 

While the language thereon may very well 

describe agreements between the depositor 

and the depository, it can hardly be 

expected to accurately express the 

intentions and relationships between the 

joint tenants about which the depository 

typically has little, if any, knowledge." 

Anderson, 196 Mont. at 501, 502, 641 P.2d at 1038. 

Respondent contends the agreement created a co-equal 

right to control over the deposit. He cites, " [tlhe actual 

gift made is not the money in the bank but the gift of the 

co-equal right with the donor to exercise control over the 

depositor." Cole, supra. While it remains true in most 

instances that joint accounts create co-equal rights in the 

depositors to exercise control over the deposits, such is 

not true in the instant case. Ella Patten completely 

precluded Donald Patten from exercising any control over the 

joint accounts, prior to her death. She "refused to obtain 

a signature" of his for the signature cards. She never 
disclosed to him the existence of these accounts. Without a 

present right to control the deposit there is no delivery. 

This right to control must be exercisable and not 

hypothetical. 

I would reverse and remand to the District Court for 

entry of judgment for appellant/plaintiff for the sum of 

$76,487.16 plus interest. 
Mr. Chief Justice Frank I. Ha.swel1, dissenting: 

I join in the dissent of Mr. Justice Harrison. I would 

emphasize that it is pure fiction to hold that Ella. Patten 

had any intention during her lifetime to make a gift of any 

part of the certificates of deposit or the bank account to 

Donald Patten under the facts of this case. She withheld 

knowledge of the existence of both from Donald during her 

lifetime to enable her to retain exclusive control over the 

same. 

Likewi-se, the joint tenancies cannot be sustained on a 

contract theory for the same reasons. 

Ella had exclusive control over the certificates of 

deposit and the bank account during her lifetime by the 

device of withholdins knowledge of the same from Don.a.ld. In 

my view, the pr0ceed.s thereof are properly a part of her 

estate. Ella Patten should not be permitted to have her cake 

a.nd eat it too during her lifetime. 

%'J. UM& 

Chief JustiEe 

Mr. Justice Daniel J. Shea: 

I join in the dissents of Mr. Justice Harrison and Mr. 

Chief Justice Haswell.