Court Opinion

ID: 6756591
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:27:37.758079+00
Date Added: 2024-06-11T16:02:27.575920
License: Public Domain

Celebkezze, C. J.,
dissenting. R. C. 1101.06, which expresses the various purposes underlying the Chapters of the Revised Code which deal with banks and building and loan associations, clearly indicates that those statutory provisions seek to safeguard, among others, the interests of a depositor such as Andrew Chickerneo. For example, division (B) of that statute declares that one of the purposes of the referenced legislation is “ [t]o provide for the protection of the interests of depositors, creditors, shareholders, and the general public in banks doing business in this state.” (Emphasis added.)
As the majority has noted in footnote No. 3 of its opinion, R .C. 1107.06, which deals "with the subject of “deposits,” specifies, in division (E), that by the acceptance of a “passbook the depositor acknowledges the receipt of and assents to the rules and regulations and any amendments thereto, adopted by the bank, governing such deposits.” However, division (B) of that same statute also *322indicates that in handling funds such as those of the appellant, a hank is nevertheless required to “secure such deposits in the manner and to the extent provided or authorized by law * * (Emphasis added.)
Furthermore, although a bank may promulgate various rules and regulations to govern a contractual relationship with its depositors, there are necessary limits to its rulemaking authority. In the second paragraph of the syllabus in Fourth & Central Trust Co. v. Rowe (1930), 122 Ohio St. 1, this court delineated the permissible scope of those rules and regulations by establishing the following caveat:
“The reasonable rules and regulations adopted by a savings bank and printed in its pass book, signed and agreed to by a depositor, form a contract between the bank and the depositor, and each is bound thereby unless such rules and regulations are contrary to some positive rule of law or are against public policy.” (Emphasis added.)
The relevant inquiry, therefore, is not only whether those rules and regulations are contrary to public policy, as the majority has acknowledged, but whether they also conflict with “some positive rule of law.” I agree that ap-pellee’s rules must be considered in conjunction with applicable case law and, as a result of that analysis, I find their application, in the record before us, contrary to established precedent encompassing the subject of joint and survivorship accounts. Accordingly, I must respectfully disagree with the conclusion that the mere existence of Rules 1 and 15 automatically authorizes appellee to do that which it could not do under prior case authority.
In Union Properties v. Cleveland Trust Co. (1949), 152 Ohio St. 430, this court held that in controversies concerning joint and survivorship accounts, which arise during the joint lives of the depositors, the “form of the deposit” is not determinative as to the respective interests of the joint depositors. The court indicated the following, at pages 434-435:
“In our opinion, in controversies like the present *323one involving the deposit and arising during the joint lives of the depositors, the form of the deposit should not be treated as conclusive on the subject of joint ownership and the door should be opened to evidence that the deposit was in truth made and maintained on a different basis. In other words, the ‘realities of ownership’ may be shown.” See, also, Fecteau v. Cleveland Trust Co. (1960), 171 Ohio St. 121; Vetter v. Hampton (1978), 54 Ohio St. 2d 227.
' In Union Properties, supra, the facts revealed a joint accoiuit established in the names of both a husband and wife. The court concluded, however, that a creditor of the husband could not appropriate the funds in the account where the evidence established that the money was, in reality, the sole property of the wife. Or, as it has been paraphrased elsewhere, such a joint account is not subject to claims against the noncontributing party even though created with his consent. Hershey v. Bowers (1966), 7 Ohio St. 2d 4, 6. Similarly, the funds in a joint and survivorship account cannot be used as a setoff against an indebtedness to the bank owed by only one of two depositors where the money was furnished solely by the other, non-debtor depositor and mutuality of obligation is lacking. Nichols v. Metropolitan Life Ins. Co. (1941), 137 Ohio St. 542.
The continued relevance of these legal principles is further evidenced by the previously mentioned obligation of B. C. 3107.06(B) that a financial institution “secure such deposits in the manner and to the extent provided or authorized by law * *
Thus, a perusal of the foregoing indicates that a depositor in a joint and survivorship account cannot be precluded, by rule or regulation, from establishing, by probative evidence, corresponding degrees of ownership in such an account before any summary seizure of its funds. Moreover, in light of Union Properties, supra, and Nichols, supra, it follows logically that a claim on that joint account can only be satisfied to the extent of a debtor-depositor’s true or proven interest therein and only where there exists the requisite mutuality of obligation. See, also, People’s *324Bank of Denton v. Turner (1936), 169 Md. 430, 182 A. 314.
The record in the present appeal describes the limited extent of John A. Chickerneo’s participation in the joint account with his father as the placing of his name on the account and securing his signature on the required signature card. The passbooks that have been issued since the creation of the account on September 30, 1965, have, at all times, been kept in the exclusive control and possession of appellant, Andrew Chickerneo. Furthermore, the fifth paragraph of the stipulations of facts filed in the lower eourt clearly establishes the “realities of ownership” in this particular account:
“All of the funds deposited and/or withdrawn from the inception of the savings account until it was closed on August 8, 1973, belong solely to Andrew Chickerneo, and said John A. Chickerneo had no separate interest in and to said funds outside of any legal or equitable interest which may have been created by the nature of the account.” (Emphasis added.)
It is the opinion of this writer that, to the extent that a construction and application of appellee’s rules permit an automatic setoff from a joint account of a non-debtor depositor, simply because the debtor has been classified as a “depositor” by having his name placed on the account and the execution of a signature card, regardless of evidence unequivocally indicating the latter’s total lack of ownership in those funds, they are contrary to established precedent, R. C. 1107.06(B), and thus proscribed by Fourth & Central Trust Co., supra (122 Ohio St. 1). Therefore, appellee would be precluded from, asserting that appellant had previously bound himself to abide by the setoff because the rules permitting that action are contrary to law.
The fact pattern presented on this appeal is just another example of problems that arise from the creation of a joint and survivorship account when an unwary depositor becomes contractually entangled without a full understanding of the legal ramifications tha.t may result from *325that undertaking’. Justice Locher, in his concurring opinion in Vetter, supra (54 Ohio St. 2d), at page 234, urged that a greater burden of disclosure should be placed on financial institutions in this regard and his sentiments are worth repeating:
* * Absent similar safeguards applicable to joint and survivorship accounts, the law of contracts insures neither a knowing disposition nor a fulfillment of the true intentions of the deceased, a party to the contract. At the minimum, legislative consideration should be given to requiring that a full and understandable disclosure of the legal implication of this account be given by the financial institution to its depositors. Certainly, this preventive measure would provide at least an understandng of the rudimentary legal consequences of entering into a contract for a joint and survivorship account.”
In light of the foregoing, I am not convinced that an application of the doctrine of “freedom of contract” is •either dispositive of the issues presented on this appeal or brings about an equitable result. Accordingly, I must respectfully dissent from the judgment rendered herein.
Locher, J., concurs in the foregoing dissenting opinion.