Opinion ID: 2172436
Heading Depth: 1
Heading Rank: 2

Heading: Joint Checking Account

Text: The lower court surcharged Bethel for one-half of the fund remaining in the joint checking account, one-half of the 300 shares of stock of the Western Pennsylvania National Bank, the accrued income on that stock, and one-half of the Series E United States Savings Bonds having a maturity value of $20,000, reasoning that when Bethel signed two checks for the purchase of the stock and bonds, the joint tenancy between Hazel and Bethel was severed, and a tenancy in common was created, each sister being entitled to one-half of the assets. We disagree. In Berhalter v. Berhalter, 315 Pa. 225, 228, 173 Atl. 172 (1934), we enunciated the proper test to be applied in all cases involving the severance of a joint tenancy. We said: Where both husband and wife have the power to withdraw funds deposited in a joint account, the power must be exercised in good faith for the mutual benefit of both, and cannot be rightly exercised by the fraudulent withdrawal of the corpus of the funds for the exclusive use of one for the purpose of depriving the other of any use thereof or title thereto. (Emphasis supplied). There are several cases in which the acts of a joint tenant were held to have severed the joint tenancy and to have created a tenancy in common. Berhalter v. Berhalter, supra; Reifschneider v. Reifschneider, 413 Pa. 342, 196 A. 2d 324 (1964); Stemniski v. Stemniski, 403 Pa. 38, 169 A. 2d 51 (1961); Lindenfelser v. Lindenfelser, 396 Pa. 530, 153 A. 2d 901 (1959); Werle v. Werle, 332 Pa. 49, 1 A. 2d 244 (1938), and Madden v. Gosztonyi Savings and Trust Company, 331 Pa. 476, 200 Atl. 624 (1938). However, in each of those cases, one of the joint tenants was appropriating jointly held property for his exclusive use and not for the mutual benefit of both tenants. This is not the situation in the instant case since Bethel did not fraudulently withdraw the funds in the account, but rather invested those funds for the mutual benefit of herself and Hazel. All she did was to change the form of the assets and in no way did she use those funds for her exclusive purposes. Thus Hazel was deprived neither of the use of those assets nor of title to them. Mrs. Rist contends that Hazel's lack of knowledge of and her failure to consent to the change in the form of the assets rendered this change solely for the benefit of Bethel and not for their mutual benefit. The record fails to disclose whether Hazel consented to Bethel's conduct, but assuming arguendo that a confidential relationship existed between the two sisters and that Hazel was unaware of Bethel's activities, the fact remains that Hazel did not suffer any injuries as a result of Bethel's act. Rather than have the money lie dormant in a joint checking account, Bethel put the fund in investments which were likely to increase the value of the assets. Since the stock and bonds were in joint names, both sisters stood to gain from the change in the form of the assets and thus Bethel's act inured to the mutual benefit of both sisters. Consequently, we are of the opinion that Bethel's actions were insufficient to destroy the joint tenancy with right of survivorship and to create a tenancy in common. Decree reversed. Costs on the estate. Mr. Justice EAGEN concurs in the result. Mr. Chief Justice BELL took no part in the consideration or decision of this case.