Opinion ID: 1244906
Heading Depth: 1
Heading Rank: 2

Heading: The trial court determined issuance of certificate of deposit # 27691 constituted a valid gift to Isal Barber, vesting in her all right to the proceeds.

Text: In view of our more recent pronouncements, it is evident this result is correct though based upon an erroneous premise. In that regard we said in McCoy v. Martin, 257 Iowa 146, 148, 131 N.W.2d 783, 784: If it is a case in which the learned court was right for a wrong reason, it was nevertheless right. See also Houlahan v. Brockmeier, 258 Iowa 1197, 1203, 141 N.W.2d 545. V. Referring now to the matter of rights under a bank deposit certificate, or book, payable to one named party or another, our early cases were determined upon the relatively rigid and unrealistic gift or trust theory. However, O'Brien v. Biegger, 233 Iowa 1179, 11 N.W.2d 412, in adopting a tripartite contract approach, held either the gift or joint tenancy concept could be employed to support the survivor's claim in a joint bank account; an account contributor may retain control of the indicia of deposit; and a noncontributing party need sign no agreement. Later, in the case of In re Estate of Murdoch, 238 Iowa 898, 901-902, 29 N.W.2d 177, this court upheld right of survivorship in a joint bank account solely on the contract basis. See also In re Estate of Winkler, 232 Iowa 930, 934, 5 N.W.2d 153. Our more recent decisions have consistently approved the views expressed in O'Brien and Murdoch, both supra. See In re Estate of Stamets, 260 Iowa 93, 148 N.W.2d 468, and citations. VI. Here the renewal certificate, placed by Mertz in decedent's bank box, designated the depositors, W. F. Martin or Isal Barber    payable to the order of self. We dealt with a comparable situation in Andrew v. Citizens' State Bank, 205 Iowa 237, 216 N.W. 12. There a mother deposited funds in a bank evidenced by a certificate of deposit payable to the order of self or Hazel Pent, daughter. Referring only to joint tenancy, this court held Hazel Pent entitled to the proceeds upon death of the mother. In so holding we said, loc. cit., 205 Iowa 243, 216 N.W.: Appellant also insists that the burden was upon Hazel Pent to allege and prove that a gift of the certificate was intended and made to her by her mother. While no evidence was offered for that purpose, we think the necessary inference from matters appearing in the record is that   . The certificate was lawfully payable to her (Hazel Pent) after her mother's death upon the surrender thereof to the bank issuing it. Section 9267, Code of 1924. (Section 528.64, Code, 1962) No other reason for the mother's making the certificate payable to herself or daughter than that she intended her to receive the money, unless paid out on her own order, is suggested. The fact that the certificate remained unpaid and unchanged is some evidence of the mother's intention. The record discloses neither pleading nor proof in any way denying or explaining the purpose and intention of the mother.  (Emphasis supplied) And, if funds are payable to an or survivor pursuant to a bank deposit certificate under the joint tenancy doctrine, the same result will surely obtain with as much if not greater force and effect by application of the tripartite contract or third party beneficiary concept. A statement in 37 Iowa L.Rev. 293, amply supported by respectable authorities, sets forth both the rationale and demonstrates the ultimate efficacy of this approach. The development of the contract theory may be said to have begun in Massachusetts in 1916. (Chippendale v. North Adams Savings Bank, 222 Mass. 499, 111 N.E. 371) It was fostered by the statutes protecting the bank from liability in payment to either party, and was instrumental in resolving the doctrinal confusion of the other theories. The primary doctrinal innovation brought about by the contract theory is that the interest of the court is directed solely at the bank-depositor relationship, rather than the relationship between the co-depositors. The gift, trust or joint tenacy theories, on the other hand, are concerned solely with this latter relationship. By stating the mutual rights and obligations of the co-depositors in terms of the bank's duties, the formal requirements of a gift, trust or joint tenancy are finessed, but the relationship between the parties is nevertheless fixed and certain. Actually, this relationship most nearly approximates that of joint tenancy, but differs materially in the immediate right of either depositor to withdraw the entire amount. The contract theory is not without its doctrinal difficulties. The problem of consideration, especially with regard to a noncontributing depositor, has been discussed by the courts, but the consideration between the bank and the contributing depositor has been held sufficient to support the contract. The transaction has been viewed as a tripartite or third party beneficiary contract, and as a contract creating the rights of the parties against the bank, with no specific name being attached to the source of these rights.  (Emphasis supplied) Our most recent pronouncements are not in conflict with the foregoing views. See In re Estate of Stamets, 260 Iowa 93, 148 N.W.2d 468, 471-473, and citations. We hold the gift theory so strenuously urged and argued by objectors is not here controlling. VII. The question next presented, heretofore briefly touched upon, is whether the certificate of deposit before us served to vest in Isal Barber a contractual or joint right to the funds deposited. Again we refer to Andrew v. Citizens' State Bank, supra, where, under an indicia of deposit in form comparable to that here disclosed, this court held a survivor entitled to the res. In so doing we took the position, the fact that the certificate remained unpaid evidenced an intent on the part of the sole contributor to vest in the named joint payee a right to the proceeds. In this regard see also Nelson v. Olympia Federal Savings & Loan Ass'n, 193 Wash. 222, 74 P.2d 1019. Dealing with rights of alternate payees to a deposit evidenced by a bank book, this court has said:    possession of one would be the possession of both, it would seem unimportant that the book remained in the safety deposit box. The administrator urges in support of his views the facts of delivery and possession. We do not think any manual delivery necessary, and, in many instances, it would hardly be possible, or at least not practicable. If the instrument executed was valid, then the possession of the deposit or the book evidencing the deposit of either    was the possession of the other, and it would be immaterial as to who held the actual manual custody. (Authorities cited). In re Estate of Winkler, 232 Iowa 930, 934, 5 N.W.2d 153, 155.