Court Opinion

ID: 9736763
Source: CourtListenerOpinion
Date Created: 2023-08-26 19:05:35.688415+00
Date Added: 2024-06-11T18:27:07.882864
License: Public Domain

Kenison, J.,
dissenting: When a depositor in good faith enters into a special agreement with a bank that his account shall be payable to him or his brother “or to the survivor of us, and that all such payments made to either one shall be equally binding upon both . . . ,” the agreement ought to be respected and enforced. *21This is particularly so in the present case where there is a complete absence of such complicating factors as evasion of taxes, fraud upon creditors or fraud upon a wife. Joint bank deposits payable to the survivor are in extensive use today by persons of small means who wish a designated relative or a member of the family to own the deposit at their death although the donor retains the bankbook, and makes all the deposits and the withdrawals. In most cases where there is litigation, the results show the common denominator to be one of frustrated intention. Dover &c. Bank v. Tobin, 86 N. H. 209; New Hampshire Savings Bank v. McMullen, 88 N. H. 123; Packard v. Foster, 95 N. H. 47. Either the deceased depositor has not done enough to satisfy the classical doctrine of a gift inter vivos or, if he has, he is charged with violating the Statute of Wills. Refreshing exceptions to this result have been few and far between. Smith v. Savings Bank, 64 N. H. 228; Burns v. Nolette, 83 N. H. 489. One reason for this situation is that the doctrine of gifts inter vivos is not flexible enough to work effectively when applied to the modern joint bank account as used today. The only successful surviving depositor is very apt to be the one that this court does not get its hands on.
Even if it be conceded that Harry did not prove a valid inter vivos gift, he should recover as a donee beneficiary of the contract between the bank and the decedent. While this terminology of the Restatement of Contracts has not been adopted in this state (N. H. anno. Restatement, Contracts, s. 133 1, a), the rights of donee beneficiaries have been recognized and enforced in equity. Toner v. Long, 79 N. H. 458; Knox v. Perkins, 86 N. H. 66. The contract between the bank and the decedent gave Harry a present interest in the joint bank account. The interest being beneficial and without burdens or conditions was presumed to be accepted. Frazier v. Perkins, 62 N. H. 69. The fact that Harry did not personally sign the contract or that he may have been unaware of it is immaterial as a legal matter. “No assent by a donee beneficiary to the contract or knowledge on his part of its existence is necessary to give him a right of action on it.” Restatement, Contracts, s. 135, comment a; Barton v. Association, 63 N. H. 535; 1 Scott, Trusts, s. 36; 1A Bogert, Trusts and Trustees (1951), s. 171. The contract between the decedent and the bank was a valid one. It expressly provided that Harry should have the proceeds if he survived and there is no logical reason why this right should not be enforced. Burns v. Nolette, 83 N. H. 489, 493; see anno. 14 A. L. R. (2d) 953, 954.
*22The theory underlying the rights of a donee beneficiary of a joint bank deposit has been well stated in a recent authoritative treatise (4 Corbin, Contracts, s. 783 (1951)) as follows.:
“Suppose, thirdly, that A deposits money, or transfers an existing deposit, to the joint credit of A and C, each to have the power to draw against the account, and the whole to go to the survivor on the death of either. . . . The fact that in these cases A as well as C has power to draw should make no difference except so far as A may exercise this power before his death. C’s right as beneficiary that the bank shall honor his drafts is merely conditional ón A’s not having drawn ahead of him.. Nearly all the cases dealing with this problem have reached the result that C gets all the money remaining after A’s death; but the analysis is of various inconsistent sorts. Nearly always the discussion is in terms of gifts of property. Sometimes a trust theory is invoked. Sometimes the beneficiary is regarded as a promisee. Rarely has the third party been regarded as the beneficiary of a contract between A and the bank. This is due either to insufficient analysis or to the uncertainty and conflict that until recently existed in third party beneficiary law. In all such cases, so long as there is no fraud on A’s creditors, C should get the money that A has not drawn out, either as an assignee, a promisee, the beneficiary of a trust, or the beneficiary of the banking debtor’s promise to the depositor. The fact that the promisee may have retained a power to revoke should be held to be immaterial, inasmuch as any joint depositor has power to terminate the other party’s right against the bank by withdrawing the whole deposit. Of course, the beneficiary has power to do the same thing with respect to the donor.”
Today it is legal in this state for a person, without complying with the Statute of Wills or the requirements of a gift inter vivos, to make another a donee of United States Savings bonds, the beneficiary of a pension fund or of a life insurance policy. This has been accomplished without the benefit of legislation. It is not necessary that the donee beneficiary sign any contract or that he have any knowledge of the benefits that are to accrue to him in, the future. The person who pays for this contract may with impunity reserve the right to change the beneficiary, to assign his rights, to borrow against it, to receive the income and to surrender it for cash. In many states a depositor may deposit money in a bank in trust for a beneficiary and retain complete control over the deposit during his life without defeating the beneficiary’s right to the deposit on *23his death. Matter of Totten, 179 N. Y. 112; anno. 168 A. L. R. 1324; 1 Scott Trusts, s. 58.3; 68 Banking Law Journal 34 (1951). The analogy of these situations to the present case is not a strained one. In a sense joint bank accounts are substitutes for a will or a portion of a will as well as a substitute for gift which passes a present interest but may not become fully effective until death. Since they can be sustained under the contract theory (Burns v. Nolette, 83 N. H. 489) without defrauding creditors, the state or a spouse, this satisfies the evils which the Statute of Wills seeks to prevent. Accordingly it is submitted there is logic in upholding them to say nothing of public policy that may be jeopardized by not doing so. 38 Harv. L. Rev. 243, 245; 51 Yale L. J. 1, 39; 4 Corbin, Contracts (1951) s. 782, pp. 86, 87.