Opinion ID: 1920122
Heading Depth: 1
Heading Rank: 1

Heading: The Savings Accounts

Text: The four savings accounts assessed by the Commonwealth were opened as joint accounts in 1938, 1940, 1947 and 1950 respectively. The first two accounts were at the First Valley Bank of Bethlehem. Decedent executed signature cards with Helen Kostelnik in 1938 and Irene Kostelnik in 1940 which provided: We, the undersigned, hereby declare that we are joint owners of the money deposited . . . and are joint owners with the right of survivorship. . . . [U]pon the death of either, the balance . . . shall be the absolute property of the survivor. The latter two accounts were at the Union Bank and Trust Co. Decedent executed signature cards with Irene Kostelnik in 1947 and Annamae Kostelnik in 1950 which provided: The undersigned . . . agree with the other. . . that all sums . . . heretofore or hereafter deposited . . . are and shall be owned by them jointly with the right of survivorship. . . . Payment to or on check of the survivor shall be subject to the laws relating to inheritance succession taxes.. . . The rights . . . of the bank under this agreement shall not be changed . . . by said depositors. . . except by written notice to said bank. . . . Appellees concede that if the signature cards are effective, the savings accounts are subject to taxation under section 241 of the Act. They assert, however, that they did not intend to create a joint tenancy with the right of survivorship. When a depositor creates a joint savings account with the right of survivorship and a signature card to that effect is executed by the joint owners, the writing is the best indication of the parties' intent. In re Estate of Gillespie, 462 Pa. 455, 341 A.2d 471 (1975). If the writing is unambiguous, its terms, like that of any other contract, may not be contradicted by parol evidence, in the absence of fraud, accident or mistake. Id.; In re Fisher, 443 Pa. 419, 279 A.2d 754 (1971); In re Fenstermaker's Estate, 413 Pa. 645, 198 A.2d 857 (1964); Furjanick Estate, 375 Pa. 484, 100 A.2d 85 (1953). Fraud, accident or mistake must be proven by clear and convincing evidence. In re Estate of Gillespie, supra; Amour Estate, 397 Pa. 262, 154 A.2d 502 (1959); Furjanick Estate, supra; see In re Estate of Olson, 447 Pa. 483, 291 A.2d 95 (1972); Commonwealth v. Nolan's Estate, 345 Pa. 98, 26 A.2d 308 (1942). Here, appellees executed an explicit, unambiguous writing which created a joint tenancy with the right of survivorship. They contend, however, and the trial court found, that the joint savings accounts were created by mistake. We do not agree. Appellees attempted to prove that their true intent was to establish a convenience account and that they never intended to make decedent a part owner of the assets. When they opened the accounts, appellees did not read the signature cards and the cards were not explained at the time they signed them. Appellees also testified that if they had read the cards they would not have signed them because the accounts were opened solely to provide for emergency situations which never materialized. To buttress their assertion of original mistake, appellees introduced evidence to show that their course of conduct was consistent with the original mistake. Appellees retained possession of the passbooks and never made a deposit or withdrawal for the decedent's benefit. Decedent made only one withdrawal, which was to pay the tuition of one of the appellees. All the money deposited in these accounts was earned by appellees, who also paid the income taxes on the earnings from the accounts. An examination of the evidence reveals that the sole evidence of mistake was appellees' failure to read the signature cards before signing them and their testimony that the consequences of a joint account were not explained to them. The course of conduct evidence merely indicates that appellees continued to act in accord with the subjective intent they now say they had when they executed the cards. Neither the source of the funds held in a joint account, the possession of the passbook solely by the survivor, decedent's failure to make a withdrawal on her own behalf or the fact that the joint account suited the convenience of the parties vitiates the legal effect of an unambiguous signature card which creates a joint tenancy. See In re Estate of Gillespie, supra; In re Fenstermaker's Estate, supra; Commonwealth v. Nolan's Estate, supra. Appellees have not satisfied their burden of proving by clear and convincing evidence that the writing was executed as a result of a mistake sufficient to justify nullification of the writing and avoid imposition of the tax. We conclude that this case is controlled by our decision in Estate of Brant, 463 Pa. 230, 235-36, 344 A.2d 806, 809 (1975), where we stated: Depositor intended to sign the card used to open the account. A careful reading of that card would have revealed the potential transfer. Neither a failure to read a card opening a joint tenancy account, nor ignorance of the tax consequences of such an account upon the death of one of the joint tenants, is an `accident or mistake' sufficient to avoid imposition of the tax. Depositor, therefore, has failed to provide `clear and convincing proof' that the account was `created as a result of fraud, accident or mistake.' Accord, In re Estate of Olson, supra. We conclude that the trial court erred in ruling that one-half the value of the joint savings account is not subject to the inheritance tax.