Court Opinion

ID: 9682383
Source: CourtListenerOpinion
Date Created: 2023-08-24 08:10:28.546404+00
Date Added: 2024-06-11T18:17:39.030464
License: Public Domain

PREWITT, Chief Judge,
concurring in the result.
I agree with the result but not the manner in which it was reached. Neither party advocates my theory and it could be that my distaste for this area of the Uniform Commercial Code has affected my judgment. The author of the majority opinion does an excellent job of reconciling and explaining the sections of the Uniform Commercial Code cited there. However, I do not believe the “Bank Deposits and Collections” of Article 4 or any other part of the Uniform Commercial Code is applicable here. It provides for situations where at least a third party, perhaps another bank, is involved, but not where the transaction is solely between the depositor and the depositor’s bank.
The bank agreed to the new account and did so by documents reflecting it. Their internal accounting and posting procedures did not delay the effectiveness of the transaction between plaintiff and the bank as there is no applicable statute which relieved the bank of its responsibility until the posting occurred. The Code perhaps does so in certain instances, but not here. Here, funds were not being collected nor deposited, but plaintiff was attempting to make the bank’s debt to her and Michael Smock a debt to her alone. The relationship of a bank and its depositor is based on contract and creates a debtor and creditor relationship. Smith v. American Bank & Trust Co., 639 S.W.2d 169 (Mo.App.1982); 5A Michie, Banks and Banking, § 1, p. 1 (repl. vol. 1983); 5 Zollmann, Banks and Banking, § 3332 (1936). See also 10 Am. Jur.2d, Banks, § 339, p. 301.
As husband and wife, the joint account was presumably held by plaintiff and Michael Smock as tenants by the entirety. Feltz v. Pavlik, 257 S.W.2d 214, 218 (Mo.App.1953). There is nothing in the record to rebut that presumption.
Changing an entireties account to an account in one spouse’s individual name does not destroy the other spouse’s rights unless the latter spouse agrees to the divesting. Allen v. Kelso, 266 S.W.2d 696, 703 (Mo.1954). See also Schwind v. O’Halloran, 346 Mo. 486, 142 S.W.2d 55, 59 (1940) (proceeds of sale of entireties property absent other factors retains its entirety char*293acteristics upon reinvestment); Ray v. Ray, 336 S.W.2d 731, 737 (Mo.App.1960) (presumption that entirety interest follows entirety funds); Johnson v. Johnson, 268 S.W.2d 439, 442 (Mo.App.1954) (proceeds from the sale of real estate held by entire-ties deposited in the name of husband only is entireties property); Feltz v. Pavlik, supra, 257 S.W.2d at 218 (joint owner may not assign an account so as to divest the other of the funds, the proceeds retain their character as joint property wherever traced).
There are situations where a joint depositor can terminate another’s interest in the debt, in which event a bank may be taking a substantial risk if it would pay the funds owed to the former joint tenant. See Smith v. American Bank & Trust Co., supra, 639 S.W.2d at 173. Here, however, there was no showing of any basis to extinguish Michael Smock’s rights and he did not consent to their extinguishment.
The attempt by plaintiff to have the funds paid on her order alone, if effective, did not change Michael Smock’s right to withdraw them. He effectively withdrew the funds, whether her check should have been or was honored. There was a debt by the bank to both plaintiff and Michael Smock and under their agreement with the bank, either could demand payment.
By taking the funds Michael Smock could not divest plaintiff of her interest, but that does not create liability for the bank as plaintiff and Michael Smock had agreed with the bank that either could remove the funds. Plaintiff could not by unilateral action change that agreement with the bank. The bank’s debt still existed after plaintiff left for California and Michael Smock had the right to demand payment, and he did. What account technically reflected the debt made no difference.