Opinion ID: 2450831
Heading Depth: 1
Heading Rank: 2

Heading: the $5,000 savings certificate

Text: The trial court's findings of fact as to this certificate are supported by substantial evidence and we do not disturb those findings. We thus have a factual situation in which plaintiff purchased with her funds a $5,000 certificate of deposit which she had issued in her name and Harold Brown's name as joint tenants with right of survivorship. She retained the certificate which evidenced the funds deposited in the survivorship account, intending that Brown should not have the certificate unless and until he survived her. However, when she took a trip to Europe, she placed this certificate of deposit in an envelope and left it with Harold Brown for safekeeping during her trip. It was to be returned to her after she came back from Europe but, in spite of her requests, Brown refused to return the certificate. By depositing her $5,000 in the bank in the names of and payable to herself and Harold Brown as joint owners with right of survivorship, plaintiff established a statutory joint tenancy. In re Estate of LaGarce, 487 S.W.2d 493 (Mo. banc 1972). In the words of the applicable statute, [5] such deposit becomes the property of these persons as joint tenants, and    shall be held for the exclusive use of the persons so named, and may be paid to any of them, or to the survivor . . . . In that case we recognized that prior cases had refused to recognize joint tenancies created under § 362.470 and what is now § 369.174 because of the absence of the common law elements essential to a valid gift inter vivos or because deemed void on the basis that the attempted gift was testamentary in nature (donor intended to retain control during lifetime) and thus in violation of the statute of wills. LaGarce held that prior cases so holding [6] had the effect of nullifying the legislative intent expressed in said statutes and should not thereafter be followed. We reaffirm the holding in LaGarce. There was created a present statutory joint tenancy in the $5,000 account in the Commerce Bank of St. Joseph. However, plaintiff had a right to retain possession of the certificate of deposit which evidenced said account, thereby retaining control over the account by reason of the fact that surrender of the certificate was required for withdrawal of funds from the account. This is consistent with the holding in LaGarce which discussed possession and utilization of the certificate and the necessity that the certificate be surrendered if the account is to be terminated. The trial court held that plaintiff delivered the certificate of deposit to defendant for safekeeping while she went to Europe with the understanding that it would be returned to her when she came back from her trip. In other words, there was a bailment of the certificate to defendant. When he refused to return it pursuant to plaintiff's request, he violated the terms of the bailment. It was on this theory that plaintiff sought by replevin to recover possession of the certificate of deposit. There are cases which hold that a joint owner of personal property cannot maintain replevin to recover such property from another joint owner. McDowell v. Hollingsworth, 10 S.W.2d 314 (Mo.App.1928); Farmers' Savings Bank v. American Trust Co., 196 S.W. 35 (Mo.App.1917). Those cases apply to conventional joint tenancies in personal property. In this instance we deal not with a conventional joint tenancy but with a specially created statutory joint tenancy. LaGarce so recognized when it stated that the statute creates what might be described as a statutory joint tenancy. 487 S.W.2d at 500. As a result, each joint tenant has a present interest in the bank account. However, as LaGarce recognizes, one party may possess the certificate evidencing the deposit and this may be for the purpose of controlling the withdrawal of funds from the account, thereby effecting a testamentary disposition. Such being the case, the rule against permitting replevin by one joint tenant against another should not be applied to a situation involving such a certificate of deposit. This is particularly true where, as here, the holder of the certificate is a bailee who has breached a duty to surrender it to the bailor. This view is supported by the case of Pulliam v. Burlingame, 81 Mo. 111 (1883), wherein defendant borrowed two mules from plaintiff but refused to return them on request. When plaintiff sought to replevy the mules, defendant alleged that his wife owned an interest therein and he was in possession as agent for his wife. On that basis he asserted the rule that one joint owner of personal property may not maintain replevin against his joint tenant. The court rejected that contention, saying that defendant could not assert such a defense where he had acquired possession by a contract of bailment. The court stated that the bailee assumed a position of trust and confidence which continued until the property was returned or lawfully accounted for. The bailee could not dispute the bailor's title. The replevin action could be maintained against bailee of the mules. Likewise, plaintiff, as bailor of the certificate, was entitled to replevy it from the bailee when he refused to return it as he had agreed to do. We conclude that the trial court properly permitted plaintiff to replevy the certificate of deposit for $5,000. The judgment on Count II is affirmed. [7] Defendant also appeals from the action of the trial court in awarding punitive damages of $500 on Count IV in connection with his retention of possession of the $5,000 certificate of deposit. His argument is based on the proposition that there was no evidence that his retention of the certificate was wrongful and that retention of a certificate which shows him as a joint owner could not be wrongful and could not support an award of punitive damages. Although we reject these contentions, we have concluded that the findings of the trial court do not support an award of punitive damages in this case. The trial court's award of punitive damages was based on its determination that defendant's action in taking possession of the five thousand dollar certificate of deposit and refusing to return it was wrongful and with legal malice. This is a mixed question of law and fact. Although we must defer to the findings of the trial court where supported by substantial evidence, the determination that defendant's action in taking possession of the certificate was wrongful must be rejected. This finding is not only unsupported by the record but also is plainly inconsistent with the court's prior determination that defendant took possession of the certificate at plaintiff's request and with the intent to return it. It is on the basis of the bailment thereby created that we affirmed the order permitting replevin. Inasmuch as there was a bailment, the finding of the trial court that defendant's refusal to return the certificate after demand was wrongful is supported by substantial evidence. Punitive damages, if justified, must therefore be premised on this action. As previously indicated, the trial court concluded that the defendant's refusal to return the certificate was with legal malice. In Missouri, actual malice, commonly defined as motivation by spite or ill will, is not a prerequisite to exemplary damages and legal malice, if supported by the evidence, will suffice. Comment, 42 Mo.L.Rev. 593, 598-600 (1977). As stated in Beggs v. Universal C. I. T. Corporation, 409 S.W.2d 719, 722 (Mo.1966), The test to be applied in determining whether malice existed as a basis for the award of punitive damages is whether the defendant did a wrongful act intentionally and without just cause or excuse. `This means that defendant not only intended to do the act which is ascertained to be wrongful but that he knew it was wrongful when he did it. There must be, in order to justify punitive damages, some element of wantonness or bad motive, but if one intentionally does a wrongful act and knows at the time that it is wrongful he does it wantonly and with a bad motive.'    Applying the foregoing test, we believe the trial court's conclusion that defendant acted with legal malice in this case is the result of an erroneous application of the law. The trial court made no finding that defendant knew his refusal to return the certificate was wrongful, nor do we believe that the record would justify such a finding. Defendant was in possession of a certificate which on its face declared his present interest therein. Although he had agreed to return the certificate, it is readily apparent that without benefit of this opinion he might in good faith have determined that his obligation to do so was more moral than legal. A good faith mistake as to the legality of the defendant's act has been held to negate legal malice under the foregoing test. Booth v. Quality Dairy Company, 393 S.W.2d 845 (Mo.App.1965); Comment, 42 Mo.L.Rev. 593 (1977). On the record before us and in the absence of a finding that defendant knew he had a legal obligation to return the certificate, we believe the award of punitive damages is inappropriate. The judgment on Count IV is reversed.