Opinion ID: 1897610
Heading Depth: 1
Heading Rank: 2

Heading: The Certificates

Text: Dewey Holloway began providing money to purchase certificates of deposit several years before his death. Testimony on this point in the depositions is by no means clear, but documentation in the record reveals that at least one certificate of deposit for $10,000 was purchased September 17, 1979, and listed the payees as Betty Holloway Hawkins or Lee T. Holloway or Guy Holloway. The certificate was renewed at six-month intervals, but the amount was increased in March 1981 to $15,000 and decedent's name was added as an alternative payee; this remained true with subsequent renewals. In September 1981, the certificate was renewed and increased to $16,000. On March 8, 1982, Dewey Holloway cashed a $4,200 check written on his and Mattie Holloway's joint account. On March 20, 1982, the amount of the certificates was increased to $20,000 by the purchase of two certificates for $10,000 each. Thus, 12 days before the amount of money held in CD's was increased by $4,000 decedent withdrew a similar amount from his and his wife's joint checking account. Betty Holloway Hawkins stated she could not remember from where she received the money to increase the amount from $16,000 to $20,000. These two certificates were renewed in September 1982, one month prior to Dewey Holloway's death. These certificates matured after Mattie Holloway filed her complaint asserting an interest in the funds. Betty Holloway Hawkins testified that she renewed these in favor of two more certificates, dropping the names of Dewey Holloway (the decedent) and Guy Holloway (decedent's and Mrs. Holloway's son, who apparently helped his mother in this suit). Mattie stated she did not know about the certificates until after her husband's death, and she never knew about any contributions her husband made to purchase the certificates. It appears, then, that decedent, directly or indirectly, provided a large portion of money to purchase the certificates. Though she could not remember specific amounts, Betty Holloway Hawkins testified in her deposition that money for the certificates came partly from her own money, some of which might have been a gift from decedent, and partly from money provided by decedent. The certificates were kept in Lee Holloway's safe deposit box to which decedent had ready access. Lee stated in his deposition that he kept them in an envelope which bore Betty's name because she was responsible for renewing them. Lee testified that decedent had no access to the lock box and Lee would not have given the certificates to decedent if he had asked. This statement contradicts evidence that decedent did renew a certificate or certificates on one occasion when Lee's son retrieved it from the lock box. The parties stipulated that decedent received the interest income from the certificates until his death. There was substantial evidence that decedent intended the $20,000 to be held in trust to care for his widow with the remainder, if any, to be divided among his children. Mary Nell Holloway, Lee's wife, was closer to decedent than perhaps even his wife. Mary Nell spoke with decedent at length on numerous occasions and typed his last will. From talking with decedent, Mary Nell stated she understood that Dewey Holloway wanted his children to keep the money in the certificates until his wife's death and then divide it. Mary Nell Holloway stated in pertinent part that Well, within the talking I understand that if Mattie needed anything, needed anything in their judgment, that it was to be taken care of, her needs. If it was needed in their judgment. Otherwise, it was to be kept for his children. Now this is the way it, I understood it was set out.       I said that the money was to be kept for his children after Mattie's death unless, if in their opinion that that money was needed for her welfare... . It was not to be divided until after her death, in case it was needed. But now in their judgment, they were the ones who were to decide. Or Betty. Whoever was in charge of it, and she was in charge of it. Betty Holloway Hawkins acknowledged that decedent wanted Mattie to be taken care of, but she said it was only if  in Betty's judgment and at her discretion  Mattie really needed something. The two certificates renewed in September 1982 were in a separate envelope in Lee Holloway's lock box at decedent's death. The certificates do not contain words of survivorship and at top is the notation Not Transferrable except on the books of Bank of Mississippi. Neither party introduced copies of signature cards on file with the bank for the certificates. Our cases involving joint tenancy survivorship of an interest in commercial paper have not made clear the interaction between our version of the Uniform Commercial Code and our descent and distribution laws. In Rand v. Moore, 414 So.2d 885 (Miss. 1981), we held that a certificate of deposit in decedent's name, endorsed over and physically delivered to a third party, completed a gift of the certificate. Even though the instrument lacked the magic words of payable to order or bearer, the certificate could nonetheless be transferred under Miss. Code Ann. § 75-3-805. The transfer created a presumption of a valid and intentional delivery which, in the absence of contrary proof, established a gift inter vivos. Id. at 887. In the same case we held that another certificate with the inscription P.O.D., for Payable on Death, was not effective to pass an interest at death to the named person when the certificate lacked execution as a valid will. In Thomas v. Estate of Eubanks, 358 So.2d 709 (Miss. 1978), we held that a negotiable certificate of deposit in decedent's possession at his death made payable in the alternative was part of decedent's estate. The decedent was a holder in due course of a negotiable instrument and there was no language or signature card evidencing survivorship. This Court went on to note that there was no evidence indicating a valid gift of the certificate to the alternative payee. Rather than relying on the presumption of survivorship implied with joint bank accounts, See Miss. Code Ann. § 81-5-63 (Supp. 1987), the Court in Thomas relied on Miss. Code Ann. § 75-3-116 (1972) which provides that the holder of an instrument payable in the alternative may enforce, negotiate or discharge it. The decedent having possession was entitled to act as though the instrument were hers alone, and her possession at death made it part of her estate. We moved back away from the Commercial Code in In re Estate of Isaacson v. Isaacson, 508 So.2d 1131 (Miss. 1987). The certificates in question in Isaacson were neither negotiable instruments nor non-negotiable instruments subject to our Uniform Commercial Code (UCC). They fell within a third category of instruments not governed by the UCC. We held those instruments passed by survivorship because the joint owners expressly evidenced this intent. We added that the `negotiability' of the CD is of no consequence if survivorship is expressly stated. The chancellor in this case relied on the statutory presumption. However, we have never squarely addressed whether the presumption of Miss. Code Ann. § 81-5-63 (Supp. 1987) should apply to certificates of deposit. We decided only two cases prior to the UCC involving survivorship rights in a certificate of deposit. Shearin v. Coleman, 201 Miss. 193, 28 So.2d 841 (1947); Myers v. Laird, 230 Miss. 675, 93 So.2d 828 (1957). In neither did we apply the presumption. In Shearin the certificate indicated it was payable to order in the alternative, or survivor. In Myers, there was constructive delivery of the certificate to the alternative payee by delivering the key to the lock box which contained the certificate. In Isaacson we characterized Thomas's holding as standing for the proposition that in absence of any survivorship provision, a joint tenancy will not be presumed, and, as a result, the CD will pass to the estate. Isaacson, 508 So.2d at 1134. Therefore, we now hold that the statutory presumption of Miss. Code Ann. § 81-5-63 does not apply to certificates of deposit. Absent expressed survivorship provisions, however, Thomas and Rand v. Moore , make clear this Court has continued to apply gift analysis. Thus, it appears from the above-cited cases that where the certificate payable in the alternative bears facial or contractual indication of intended survivorship, this expressed intent will be given effect. Absent express indication, this Court will look to whether the co-owner made a valid gift of his interest. See Thomas v. Estate of Eubanks, 358 So.2d at 713; Rand v. Moore, 414 So.2d at 886-87. Of course, this will be true without regard to the extent of a co-owner's interest. Thus, even a tenant in common with a one-half interest in a certificate of deposit will be required to prove his co-tenant made a valid gift absent express language indicating survivorship. We realize in a given instance it may be difficult for one co-tenant to prove his co-tenant relinquished control and dominion, but we do not subscribe to that which facilitates circumvention of our descent and distribution law. This result will reinforce the need for expressing survivorship, if this is the desired result. Turning to the case at hand, the certificates in question bear no survivorship language. No signature cards were produced contractually establishing survivorship rights. Thus, the question is whether Dewey Holloway completed a gift of his assets. The requirements of an inter vivos gift are well settled and familiar. When it is shown that one party has title to certain property and another party claims that property by virtue of a gift from the owner, the following elements must be present: (1) a donor competent to make a gift, (2) a voluntary act of the donor with donative intent, (3) the gift must be complete with nothing else to be done, (4) there must be delivery to the donee, and (5) the gift must be irrevocable. See, e.g., Ross v. Braswell, 511 So.2d 492 (Miss. 1987). See also, Carter v. State Mutual Federal Savings & Loan Association, 498 So.2d 324, 327 (Miss. 1986); Matter of Collier, 381 So.2d 1338, 1340 (Miss. 1980); Thomas v. Estate of Eubanks, 358 So.2d 709 (Miss. 1978); Longtin v. Witcher, 352 So.2d 808 (Miss. 1977). The burden of proof on each element lies with those seeking to establish the gift. Ross, at 496. The evidence must be clear and convincing, or clear and satisfactory. Ross, at 496; Carter, 498 So.2d at 327. Keeping this burden in mind, we are constrained to hold as a matter of law that the facts in this case fail to establish irrevocable delivery to appellees. Delivery requires relinquishment of all dominion and control. Carter, 498 So.2d at 327; Gilder v. First National Bank of Greenville, 214 So.2d 681 (Miss. 1968). Here there was conflicting evidence as to who originally purchased the certificate in 1976. Mary Nell Holloway, decedent's daughter-in-law/confidant and Lee's wife, testified that she originally received a pouch containing decedent's belongings, which she was told also contained a certificate of deposit. This pouch was placed in Lee's lock box and kept separate from their belongings. Betty Holloway Hawkins stated that she purchased the original certificate of deposit with money that her father gave her, and possibly some money of her own. Early certificates were originally taken out in Betty's, Lee's and Guy Holloway's names only. Following several renewals, Betty testified that she added her father's name to the certificate so he would receive the interest income. This arrangement continued until decedent's death. Betty testified that she continued to renew the certificate and periodically increased the amount. The last time the amount was increased, a $16,000 certificate was increased to two $10,000 certificates on March 20, 1982. Lee testified that he would give decedent anything from the lock box with decedent's name on it at his request, except the certificates, because Betty was taking care of those. However, it was stipulated Guy Holloway would testify that decedent was given the certificate or certificates on one occasion. The proof shows that though Betty Hawkins may have purchased the initial certificate, decedent contributed the majority, if not all the money for that purchase. The initial certificate and subsequent renewals were kept in the community lock box to which decedent had access. Decedent continued to receive the income from these CDs during his lifetime. This itself is normally not conclusive of a failure to make a gift, but taken together with evidence that decedent continued to have some control over the certificates, the proof fails as a matter of law to show by clear and convincing evidence that decedent Dewey Holloway relinquished control of his interest in the certificates. Decedent's interest in the certificates not having been the subject of a valid gift, it should be returned to the estate. On remand, the chancellor should direct that the amount of the certificates attributable to decedent's contribution must be brought into the estate.