ESTATE OF Floyd D. PROPST, Deceased. Graple Eula PROPST, Petitioner and Respondent, v. Neta STILLMAN et al., Objectors and Appellants.
Neta Stillman, the daughter, by a prior marriage, of Floyd D. Propst (hereinafter decedent), and Robert M. Rigney, as executor of the decedent's estate, appeal from a judgment decreeing that funds held in decedent's name alone in nine bank and savings and loan association accounts and two cashier's checks were joint tenancy funds which, upon the decedent's death, became the property of the surviving joint tenant, Graple Eula Propst, decedent's second wife. On appeal, appellants contend that the trial court erred, as a matter of law, in finding that decedent could not terminate the joint tenancy account without the consent of his wife and cotenant. They also contend that no evidence was offered to support the conclusion that Wells Fargo Bank cashier's check No. 3011 was purchased with joint tenancy funds. Finally, appellants challenge the finding that a $30,000 certificate of deposit was held in joint tenancy.1
Floyd D. Propst and Graple Eula Propst were married on April 18, 1962. Both had been previously married and each had a child by the prior marriage: Graple Propst had a son named Miles Ellington. Decedent had a daughter named Neta Stillman.
On April 8, 1976, respondent and decedent executed “mirror wills” providing that the survivor would inherit the entire estate if either predeceased the other, and, upon the death of the survivor, Neta Stillman and Miles Ellington would divide the estate equally.
Decedent died on November 16, 1983. Shortly before his death he changed his will to provide that, apart from a few cash bequests, his entire estate should go to his daughter, Neta Stillman. The will also confirmed that Graple Propst should receive her half of the community property.
On January 18, 1985, Graple Propst filed an “Amended Petition for Determination of Entitlement to Estate Distribution.” The petition alleged that in the two months prior to his death, decedent had withdrawn funds from accounts held by decedent and Graple Propst as joint tenants and, without his wife's knowledge or consent, redeposited those funds in accounts under decedent's name alone and used the joint tenancy funds to purchase Wells Fargo Bank cashier's checks numbered 3011 and 3036.2 The petition alleged that these individual accounts and the two cashier's checks continued to be held in joint tenancy, despite decedent's unilateral acts, and that the accounts therefore should pass to Graple Propst outside of the estate.
The parties subsequently stipulated that ownership of a $30,000 Bank of America certificate of deposit could also be litigated. Graple Propst claimed that this account was a joint tenancy account and that she, as the surviving cotenant, was entitled to the entire account immediately upon decedent's death.
In their opposition to the amended petition, appellants stated that there was “no dispute that most of the accounts in question ․ were originally joint accounts held in the names of both FLOYD and/or GRAPLE PROPST. However, prior to his death, FLOYD PROPST closed these accounts and deposited the funds from most of them into individual accounts in his name only. The issue then before the Court is can one joint tenant break a joint tenancy by withdrawing the funds from a joint account and depositing them in his name alone?”
The parties submitted to the court a statement of agreed facts which stated that it was not disputed that the accounts listed in the amended petition were closed by decedent and the funds were thereafter redeposited in decedent's name alone. However, the statement of agreed facts did not include any stipulation regarding the source of funds for the purchase of the two disputed cashier's checks, nor did the parties stipulate that the joint accounts which were closed by decedent were joint tenancy accounts.
At trial, the evidence regarding the accounts which Graple Propst alleged were originally joint tenancy accounts consisted primarily of documents evidencing the form of title of the original accounts and the transactions. Graple Propst testified that she had no knowledge of decedent's actions and did not consent to them. During the trial Graple Propst's attorney conceded that decedent intended by his actions to sever the joint tenancy accounts.
The issue with respect to the $30,000 certificate of deposit was whether it was held in joint tenancy. The evidence submitted included the following:
a. The original signature card for the account. On the front of the signature card the box for an individual account was checked and decedent's signature appeared on the signature line with the other signature lines lined out. On the reverse side there was a notation stating “want to change from trustee to joint tenancy” and another notation reading “made joint” with initials next to it.
b. The bank's computer ledger showing, on June 22, 1983, the account under decedent's name alone, and, on June 23, 1983, with the names of both decedent and Graple Propst.
c. A copy of the $30,000 certificate of deposit stating that it was payable to Floyd Propst or Graple Propst.
d. Geraldine Tompkin, a senior investment officer of the bank, testified that Graple's name was added the day after the account was opened. She further testified that the bank's usual practice was to get both signatures on the signature card when an account was converted to joint tenancy. She assumed, therefore, that there was another signature card which had been lost. Ms. Tompkin could not identify the handwriting or initial next to the notation “made joint.” She added that it would not have been possible for someone other than decedent to add a name to the account. She further testified that the bank's ledger indicated that the account was made joint but that in her opinion it was the signature card which constituted the depositor agreement.
e. Graple Propst testified that decedent told her that the $30,000 “was for he and/or me, Floyd or Graple.” She said that decedent opened the account with “our” money; however, she had no specific recollection of opening the account or signing a signature card for it.
f. Robert Rigney, decedent's attorney, testified that decedent discussed the $30,000 certificate with him in the context of a more general discussion regarding severance of joint tenancies in certain bank accounts. Rigney testified that decedent did not recall how Graple's name got on the account and stated, “I don't want it on.” Decedent told Rigney that the funds in that account were community property. Rigney suggested that decedent endorse the certificate over to Rigney as trustee and that they could try to change the terms when the banks opened. No further action was taken because shortly thereafter decedent became ill.
Following the trial, the court issued its statement of decision that the $30,000 certificate was held in joint tenancy and also holding that, as a matter of law, “one party to a joint tenancy in personal property, i.e. money, cannot change the character of the joint tenancy by placing it in his name alone, absent an agreement by the parties. This character of joint tenancy is retained in the subsequent property acquired from the uses [sic] of the original joint tenancy property. That is, the attempts of Mr. Propst to terminate the joint tenancy by withdrawing funds (or endorsing certificates) and placing them in his name alone did not change the nature of the funds. By operation of law they went to Mrs. Propst on the death of Mr. Propst.” The statement of decision did not specify which accounts were held in joint tenancy. Instead, the court directed Graple Propst's attorney to prepare a judgment to be signed and filed.
Before a judgment was prepared or entered, appellants filed a motion to vacate the judgment which the court treated as a motion to reconsider pursuant to Code of Civil Procedure section 1008. The motion was granted, and on September 26, 1985, the court adhered to its original statement of decision directing Graple Propst's attorney to prepare a judgment. The formal judgment specifying the distribution of property that the court had ordered to be prepared was not entered until March 5, 1986.3 The judgment provided that all of the accounts alleged in Graple Propst's petition; certain Bank of America and Wells Fargo Bank accounts; and cashier's checks Nos. 3011 and 3066, retained their joint tenancy character despite decedent's attempts to sever the joint tenancies. The judgment further provided that the $30,000 certificate of deposit was held in joint tenancy and the form of title was not changed by endorsing the certificate to decedent's attorney.
Appellants filed their notice of appeal on April 7, 1986.
The primary issue raised by this appeal is whether, as a matter of law, decedent could, without the knowledge and consent of his wife and cotenant, sever joint tenancies in certain bank accounts by closing the accounts and reopening them in his name alone. Our review of the existing case law in this area leads us to conclude that the decision of the trial court was based on a line of authority applicable only to joint tenancy in personal property that has developed in California on the strength of two oft-cited and misinterpreted California Supreme Court decisions: Estate of Harris (1915) 169 Cal. 725, 147 P. 967 (hereinafter Harris I ) and Estate of Harris (1937) 9 Cal.2d 649, 72 P.2d 873 (hereinafter Harris II ). Were it not for the fact that the Supreme Court itself has cited Harris I as support for the rule of law applied by the trial court in this case (see, e.g., Fish v. Security–First Nat. Bank (1948) 31 Cal.2d 378, 387, 189 P.2d 10), we would hold that, as is the case with severance of joint tenancies in real property, a joint tenant in personal property may sever the joint tenancy without the consent of his or her cotenants by an act which unambiguously establishes his or her desire to terminate the estate. (See, e.g., Tenhet v. Boswell (1976) 18 Cal.3d 150, 157–158, 133 Cal.Rptr. 10, 554 P.2d 330 [holding that a lease for a term of years by one joint tenant to a third party does not unambiguously establish his or her desire to terminate the joint tenancy]; Riddle v. Harmon (1980) 102 Cal.App.3d 524, 527–530, 162 Cal.Rptr. 530 [holding that a grant deed by one joint tenant to herself severed the joint tenancy without the consent of the cotenant].) However, in light of our limited authority as an intermediate appellate court, we reluctantly affirm the trial court's conclusion that a joint tenancy in personal property may not be severed without the knowledge and consent of the other joint tenants. (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455, 20 Cal.Rptr. 321, 369 P.2d 937.)
Under the common law, four unities are essential to the creation and continuation of a joint tenancy: unity of interest, time, title, and possession. (Tenhet v. Boswell, supra, 18 Cal.3d 150, 155, 133 Cal.Rptr. 10, 554 P.2d 330; Riddle v. Harmon, supra, 102 Cal.App.3d 524, 526, 162 Cal.Rptr. 530.) As a general rule, if one of the unities is destroyed the joint tenancy is severed and the cotenants become tenants in common.4 (Tenhet v. Boswell, supra, at p. 155, 133 Cal.Rptr. 10, 554 P.2d 330.) Severance in the joint tenancy extinguishes the right of survivorship, which is a “mere expectancy that arises ‘only upon success in the ultimate gamble—survival—and then only if the unity of the estate has not theretofore been destroyed․’ ” (Riddle v. Harmon, supra, at p. 526, 162 Cal.Rptr. 530.)
In the context of real property, the courts have consistently held that “An indisputable right of each joint tenant is the power to convey his or her separate estate by way of gift or otherwise without the knowledge or consent of the other joint tenant and to thereby terminate the joint tenancy.” (Riddle v. Harmon, supra, 102 Cal.App.3d 524, 527, 162 Cal.Rptr. 530, citing Delanoy v. Delanoy (1932) 216 Cal. 23, 26, 13 P.2d 513; Harris II, supra, at p. 658, 72 P.2d 873; Wilk v. Vencill (1947) 30 Cal.2d 104, 108–109, 180 P.2d 351.) In Riddle, the court reinforced the power of a joint tenant to effect a severance and destroy the right of survivorship by abolishing the requirement that the joint tenant transfer his or her interest to a third person or use the legal fiction of a strawman. (Riddle v. Harmon, supra, at pp. 528–531, 162 Cal.Rptr. 530.) By application of these rules, the efforts of the decedent in this case to sever the joint tenancies in certain bank accounts would have had the legal effect that he intended.5
However, a different rule prevails under California law with respect to the severance of joint tenancies in personal property: The courts have persisted in reciting and applying the rule that “where community personal property or any other personal property, no matter what its original form might have been, has been changed by the parties to joint ownership during the joint lives of the owners, the funds so changed to joint tenancy, or any property acquired from the funds held in joint tenancy, will remain joint tenancy in character, unless there has been a change in the character of the property by some agreement between the parties.” (Cordasco v. Scalero (1962) 203 Cal.App.2d 95, 105, 21 Cal.Rptr. 339, citing Harris I; Harris II; Wallace v. Riley (1937) 23 Cal.App.2d 654, 74 P.2d 807; Estate of McCoin (1935) 9 Cal.App.2d 480, 50 P.2d 114.)
In Estate of McCoin, supra, 9 Cal.App.2d 480, 50 P.2d 114, the court applied this rule to facts nearly identical to those of this case. A husband and wife deposited community funds into a joint tenancy bank account. On the day before the death of his wife, the husband withdrew the entire amount deposited in the joint tenancy account and redeposited these funds in an account in his name alone. (Id., at pp. 481–482, 50 P.2d 114.) Relying on Harris I, the court held that the husband's action in closing the joint tenancy account and reopening it in his name individually did not alter its status as joint tenancy property absent an agreement with his wife that the character of the property be changed. (Id., at pp. 482–483, 50 P.2d 114.)
In Doran v. Hibernia Savings and Loan Soc. (1947) 80 Cal.App.2d 790, 182 P.2d 630, the court stated that, contrary to the rule at common law, “In the case of a bank account it is settled in this state that even the destruction of the unity of title does not terminate the joint tenancy” in the absence of an agreement to change the form of title. (Id., at p. 795, 182 P.2d 630, citing Harris I and Harris II.) The court concluded that, a fortiori, the destruction of unity of possession by the substitution of a guardian for one of the joint tenants did not sever the joint tenancy. (Ibid.)
More recently, in Taylor v. Crocker–Citizens Nat. Bank (1968) 258 Cal.App.2d 682, 65 Cal.Rptr. 771, the court held that a promissory note made payable to the husband or his wife but which did not specify any right of survivorship was not held as tenants in common because the loan had been made from joint tenancy funds. (Id., at p. 685, 65 Cal.Rptr. 771.) Although the court stated that “either party to a joint tenancy may terminate it, ․ if he intends to do so,” the court apparently endorsed the requirement that severance could occur only by agreement of the parties. (Id., at p. 688, 65 Cal.Rptr. 771.) The court concluded that because there was no evidence of an agreement between the husband and wife to change the character of the joint tenancy funds the note was held in joint tenancy despite the form of title. (Ibid.)
This special rule for personal property prohibiting unilateral severance of joint tenancies has also been cited in dicta in two more recent decisions. In Estate of Drucker (1984) 152 Cal.App.3d 509, 199 Cal.Rptr. 345, the issue before the court was whether an account with the form of title as joint tenancy was a true joint tenancy or whether it was actually a trust account containing the separate property of the decedent “as part of an estate plan intending to make a gift to the surviving noncontributing joint tenant effective upon the contributing joint tenant's death.” (Id., at p. 514, 199 Cal.Rptr. 345.) The court acknowledged that if the original account were a true joint tenancy, then the surviving joint tenant would be entitled to trace the proceeds of the joint tenancy accounts. (Id., at p. 512, 199 Cal.Rptr. 345.) However, the court held that the rebuttable presumption of joint tenancy created by Financial Code section 852 was overcome by evidence that the account was really intended to be a living trust. (Id., at pp. 513–515, 199 Cal.Rptr. 345.) Thus, the contributing cotenant was entitled to transfer the funds out of the trust account during her lifetime and place them in her name alone. The noncontributing cotenant thereby lost all rights to those funds. (Ibid.)
The same analysis was also applied in Estate of Zeisel (1983) 143 Cal.App.3d 516, 192 Cal.Rptr. 25. Again, the court acknowledged the general principle that, if a true joint tenancy account existed, then “money taken from the joint tenancy account and put into another account during the joint lives of the depositors will be traced into the new account and will retain its character as joint tenancy property.” (Id. at pp. 523–524, 192 Cal.Rptr. 25, citing Harris I.) The court held, however, that the issue before it was whether extrinsic evidence was admissible to show that the property in question was intended to be held as revocable trust rather than a true joint tenancy, and went on to find that it was. (Id., at pp. 524–527, 192 Cal.Rptr. 25.) 6
On at least one occasion the California Supreme Court has also applied this rule to personal property. In Fish v. Security–First Nat. Bank, supra, 31 Cal.2d 378, 189 P.2d 10, the court, citing Estate of McCoin, supra, and Harris I, supra, reiterated the rule that the “proceeds of joint tenancy property, in the absence of contrary agreement, retain the character of the property from which they are acquired.” (Id., at p. 387, 189 P.2d 10.) Thus, the court concluded that the proceeds of a loan made with joint tenancy funds retained their joint tenancy character even though they were deposited in an individual account because substantial evidence supported the trial court's conclusion that there had been no agreement between the joint tenants that “the fruits of the joint tenancy notes would not retain their joint tenancy character․” (Id., at p. 387, 189 P.2d 10.)
All of these cases recite the rule prohibiting the unilateral severance of joint tenancy in personal property without articulating any logical basis for distinguishing between the severance of joint tenancy in personal property and real property. (See Note (1940) Joint Tenancy: Character of Personal Property Acquired with Withdrawals from Joint Bank Accounts, 28 Cal.L.Rev. 224, 226, fn. 11 (hereinafter “Joint Bank Accounts”).) Instead, these decisions simply cite to Harris I and its progeny as the source for the rule. A close reading of Harris I, however, reveals that the proposition for which it is cited is limited to the particular facts of that case.
In Harris I, Mr. Harris and his wife had orally agreed, early in their marriage, that all the property that they then held, be it separate or community property, and all property subsequently acquired would thereafter be held by them as joint tenants. (Harris, I., 169 Cal. at p. 727, 147 P. 967.) In order to implement this agreement they opened a joint bank account with right of survivorship. The husband and wife further agreed that title to property acquired with funds from this account “should be taken and held by them as joint tenants in the same manner as the money was deposited.” (Id., at p. 727, 147 P. 967.) The property in controversy was corporate stock which had been purchased by the husband with funds from the joint account. The certificates had issued in the husband's name alone and had been endorsed by him individually. The husband had placed the certificates in a safe-deposit box in which the husband and wife kept papers pertaining to their joint tenancy property. (Ibid.) Following the husband's death, his sister claimed that the stocks were either the husband's personal property or community property, whereas the wife asserted that they passed to her as the surviving joint tenant. (Ibid.)
The court sustained the wife's contention that the stock retained its joint tenancy character despite the change in the written form of title. However, the basis for that decision was that the oral agreement between the husband and wife effectively transformed all property held or acquired during their marriage into joint tenancy regardless of the written form of title. (Harris I., at p. 728, 147 P. 967.) Nonetheless, one sentence from that opinion has been taken out of context and elevated to a “rule of property” in California.
This misinterpretation of the Harris I decision was aptly analyzed by one commentator: “In reaching its decision upholding [Mrs. Harris'] contention, the supreme court set forth the following three propositions: (1) Personal property may be held by two or more persons in joint tenancy. (2) A joint tenancy in personal property may be created by an oral agreement. (3) One of the incidents of a joint tenancy is the right of survivorship. The court then concluded: ‘The property acquired with money taken from the bank account would retain the character of joint property, the same as the money with which it was obtained, unless by some agreement between the parties its character was changed. No such agreement was made, but the contrary was agreed upon. On the authority of the case of Kennedy v. McMurray [ (1915) 169 Cal. 287, 146 P.2d 647 ․], the order of the court below is correct. [Fn. omitted.]’ Thus it is clear that the doctrine attributed to [Harris I ] was not necessary to the decision of the case, as the agreement of the parties covered the stock purchased as well as the bank account. Further, it is not clear that the court even by way of dictum enunciated such a doctrine. It would seem that the court in the statement quoted meant that in view of the agreement providing all property should be held in joint tenancy the property in controversy had that character unless the parties entered into a contrary agreement. It is only by isolating the sentence from its context that the dictum acquires an erroneous connotation.” (Joint Bank Accounts, supra, at p. 225.)
Despite the factual specificity of the holding in Harris I, the Supreme Court, in a subsequent decision resolving a dispute regarding the distribution of certain real property acquired by Mr. and Mrs. Harris, acknowledged, in dicta, that Harris I “laid down the rule that joint tenancy property may be traced into personal property and the personal property so acquired with joint tenancy funds will be deemed to be held in joint tenancy, in the absence of an agreement to the contrary, regardless of the circumstance that title to said acquired property may be held by only one of the joint tenants. Although this conclusion that where personal property is purchased with joint tenancy funds and title is placed in the name of one of the cotenants, the joint tenancy is not terminated, despite the destruction of one of the necessary unities, namely, unity of title, appears to be contrary to the common law rule, nevertheless, this exception to the common law rule, which had its origin in Estate of Harris, supra [Harris I ] has become the recognized and established law of this state, and has been followed in numerous ․ decisions. (Lagar v. Erickson, 13 Cal.App.(2d) 365 [56 P.2d 1287] ․; Estate of McCoin, 9 Cal.App.(2d) 480 [50 P.2d 114] ․; In re Kessler, 217 Cal. 32 [17 P.2d 117] ․; Young v. Young, 126 Cal.App. 306 [14 P.2d 580] ․)” (Harris II, 9 Cal.2d at pp. 654–655, 72 P.2d 873.)
The Supreme Court went on to limit the holding of Harris I to personal property, and proceeded to apply the traditional common law rule regarding severance of joint tenancy to certain real property acquired with joint tenancy funds during Mr. Harris' lifetime. Thus, the court stated: “We are of the opinion that the same result flows from the severance by one spouse of a joint tenancy ownership by the taking of [real] property purchased with the joint tenancy funds in his or her own name, as results when one joint tenant deeds his interest in the property to a stranger. (Delanoy v. Delanoy, supra [216 Cal. 23, 13 P.2d 513].) The owners of said property thereafter each own the same as tenants in common.” (Id., 9 Cal.2d at p. 660, 72 P.2d 873.)
Other than simply asserting that the rule was different for personal property, the court in Harris II failed to explain why the purchase with joint tenancy funds of land in the name of one cotenant would work a severance yet the purchase of stock and bonds would not.7 Despite the lack of analytical clarity, and the court's own acknowledgement that requiring the agreement of all joint tenants before a severance of joint tenancy in personal property will be recognized was contrary to the common law, the two Harris decisions are consistently recognized as the source of this special rule, applicable only to personal property. (See, e.g., Fish v. Security–First Nat. Bank, supra, 31 Cal.2d 378, 387, 189 P.2d 10; Taylor v. Crocker–Citizens Nat. Bank, supra, 258 Cal.App.2d 682, 688, 65 Cal.Rptr. 771; Estate of McCoin, supra, 9 Cal.App.2d 480, 482–483, 50 P.2d 114.) Regardless of our opinion concerning its wisdom, we are compelled to follow the precedent of the California Supreme Court and therefore affirm the decision of the trial court holding that the joint tenancy accounts which were closed by decedent and reopened under his name alone, without Graple Propst's knowledge or consent, continued to be held in joint tenancy. (Auto Equity Sales, Inc. v. Superior Court, supra, 57 Cal.2d 450, 455, 20 Cal.Rptr. 321, 369 P.2d 937.)
We must also reject appellants' two remaining arguments challenging the court's ruling on this issue. First, they contend that we should apply a common law version of recent statutory amendments to the Probate Code which they contend recognize that a joint tenancy account may be terminated by closing the account and reopening it under different terms. Probate Code section 5301 et seq. were recently added to set forth rules applicable to the determination of ownership between the parties and their successors to joint bank accounts. Section 5303 specifies the methods for changing the form of ownership of the account, and provides that the terms may be changed by “[c]losing the account and reopening it under different terms.” Section 5305 further creates a presumption that funds deposited in an account by parties who are married to each other are community funds despite the form of title as joint tenants. The legislative committee comment notes that these provisions more accurately reflect the expectations of the parties.8
Unfortunately, in this case we cannot rely upon these recent statutory enactments because, as appellants concede, these provisions are applicable only to credit unions and industrial loan companies. (Prob.Code, § 5101.) They urge, nonetheless, that we apply the same rules to the disputed bank and savings and loan accounts by way of common law.9 As we have already discussed at length, however, the common law in California does not recognize the ability of one joint tenant to unilaterally terminate the joint tenancy by closing the account. Their arguments are better directed to the Supreme Court, or to the state Legislature.
Second, they ask us to find that even if these accounts originally were held in the form of a joint tenancy, the funds deposited in the account were community funds and the decedent and his wife intended that the property be treated as community property despite the form of title. This issue, however, was never presented to the trial court. Both parties stated in their trial briefs that the issue before the court was whether decedents unilateral acts severed the joint tenancy in those accounts shown to have been originally held in joint tenancy. We find nothing in the briefs, the trial transcript, or the judgment of the court indicating that the factual issue of the intent of the parties to treat these funds as community property despite the form of title was either presented to or decided by the court. Therefore, it may not be presented for the first time on appeal. (Ernst v. Searle (1933) 218 Cal. 233, 240–241, 22 P.2d 715.) The cases cited by appellants (Burdette v. Rollefson Construction Co. (1959) 52 Cal.2d 720, 725–726, 344 P.2d 307; Tyre v. Aetna Life Ins. Co. (1960) 54 Cal.2d 399, 405, 6 Cal.Rptr. 13, 353 P.2d 725; and LaMancha Dev. Corp. v. Sheegog (1978) 78 Cal.App.3d 9, 14, 144 Cal.Rptr. 59) are inapplicable because each involved a new issue of law on appeal. Here, the new issue raised by appellants, i.e., the intent of decedent and his wife to treat the funds as community funds, is purely factual.
Appellants claims that no evidence was offered at trial with respect to the source of the funds used to purchase Wells Fargo Bank cashier's check No. 3011 in the amount of $10,022.58. Thus, they argue that Graple Propst, as the person claiming the existence of a joint tenancy, failed to carry her burden of proof. (Manti v. Gunari (1970) 5 Cal.App.3d 442, 446, 85 Cal.Rptr. 366.) Instead of citing to relevant evidence, Graple Propst contends that the allegations of her petition and her supporting declaration are sufficient to support the judgment in her favor with respect to cashier's check No. 3011. However, Probate Code section 1080 specifically provides that the allegations of a petition for determination of heirship “shall be deemed denied.” Thus, Graple Propst cannot rely solely on the allegations of her petition, and her declaration was not offered as evidence at trial. Instead, we must determine whether substantial evidence supports the court's finding that check No. 3011 was purchased with funds from a joint tenancy account.
We have reviewed the transcript and are unable to find any testimonial evidence with respect to check No. 3011 which Graple Propst alleged had been purchased with joint tenancy funds from Wells Fargo Bank account No. 6125–015867–017. Nor are there any stipulated facts which support the court's finding.
On our own motion we augmented the record with the trial exhibits from the Contra Costa County Superior Court and reviewed them to ascertain whether they contain any evidence in support of the court's finding. Although petitioner's Exhibit 6 does contain a Wells Fargo Bank time deposit account record card listing account No. 6123–015867–017, the card only lists the names “PROBST, FLOYD C. OR GRAPLE E.,” but does not include any reference to joint tenancy ownership or right of survivorship. Nor is there any evidence that funds from this account were used to purchase check No. 3011. Because we find that no evidence was offered in support of the finding that cashier's check No. 3011 was purchased with joint tenancy funds, we reverse the judgment to the extent that it declared that Graple Propst, as the surviving joint tenant, was entitled to cashier's check No. 3011 upon the death of decedent.
Appellants next contend that the court erred as a matter of law in finding that the $30,000 certificate of deposit was held in joint tenancy because the written depositor agreement did not comply with Financial Code section 852.10 Appellants also argues that the court's finding of intent to create a joint tenancy is not supported by substantial evidence.
We agree with appellants that the absence of language on the bank's signature card providing for payment to the survivor fails to comply with the requirements of Financial Code section 852. (See, e.g., Paterson v. Comastri (1952) 39 Cal.2d 66, 71, 244 P.2d 902; Crocker–Anglo Nat. Bk. v. American Tr. Co. (1959) 170 Cal.App.2d 289, 295–297, 338 P.2d 617.) However, Financial Code section 852 merely creates a rebuttable presumption that a joint tenancy has been created which may be overcome by evidence of a contrary intent. (Paterson v. Comastri, supra, 39 Cal.2d 66, 71, 244 P.2d 902.) Thus, although Graple Propst could not claim the benefit of the section 852 presumption, she was not precluded from proving intent to create a joint tenancy by extrinsic evidence in light of the ambiguity created by the notations on the back of the signature card stating “want to change from trustee to joint tenancy” and “made joint.” (Id., at pp. 70–73, 204 P.2d 902; Crocker–Anglo Nat. Bk. v. American Tr. Co., supra, at pp. 296–297, 338 P.2d 617; see also DeLorenzo v. Federal Deposit Insurance Corporation (1967) 268 F.Supp. 378, 380–381 [interpreting California Financial Code section 852 in light of the New York banking law upon which section 852 is based; court holds that failure to comply with section 852 does not preclude proof of the creation of a joint tenancy by other evidence of intent].)
Therefore, we are left with the question whether substantial evidence supported the court's conclusion that Graple and Floyd Propst intended to create a joint tenancy in the $30,000 certificate of deposit. We will not repeat the summary of evidence regarding the form of ownership of this certificate which is earlier set forth in detail. Based on this record we conclude that there was substantial evidence to support the court's conclusion that the certificate was held in joint tenancy. Although only the individual box was checked on the front of the signature card, the notations on the back strongly suggested that there had been an attempt by someone to convert the account to joint tenancy. The bank officer testified that only the original depositor, i.e., Floyd Propst, would have been permitted to make such a change. Moreover, the bank's ledgers also listed both names on the account and the certificate was made payable to either Floyd or Graple Propst.11 Therefore, the court could reasonably have concluded that Floyd Propst changed the terms of the account shortly after opening it. The court was free to discredit the testimony of Mr. Propst's attorney, Mr. Rigney, to the effect that Mr. Propst said he did not know how the account became joint, as self-serving. Moreover, even if Mr. Rigney's testimony that Mr. Propst wanted his wife's name off of the certificate was credited, that statement would be more probative of decedent's subsequent desire to sever the joint tenancy than of his initial intent to create a joint tenancy. In their opening brief, appellants admit that the evidence of intent to create a joint tenancy is “at best conflicting”. Under these circumstances we must affirm the court's finding that the $30,000 deposit was held in joint tenancy as supported by substantial evidence. (Crocker–Anglo Nat. Bk. v. American Tr. Co., supra, 170 Cal.App.2d 289, 299, 338 P.2d 617.)
The judgment is reversed to the extent that it declared Graple Propst to be entitled to the entire amount of Wells Fargo Bank cashier's check No. 3011 as the surviving joint tenant. In all other respects, the judgment is affirmed. Each party shall bear its own costs on appeal.
1. On June 20, 1988, we granted respondent's petition for rehearing solely on the issue addressed in part III of this opinion. Upon reexamination of the evidence we have concluded that our original decision was correct and therefore refile that decision in its entirety.
2. The petition also alleged disputes regarding the characterization of other property that is not the subject of this appeal.
3. The original statement of decision was not an appealable order because the court directed that a formal judgment be prepared and filed. (Estate of Pieper (1964) 224 Cal.App.2d 670, 675, 37 Cal.Rptr. 46; Estate of Evanis (1955) 130 Cal.App.2d 64, 65, 278 P.2d 506.) After granting the motion for reconsideration, the court stated that it adhered to its original decision which directed that a formal judgment be prepared. Therefore, the time for filing the notice of appeal did not start running until the formal judgment was entered.
4. The California courts, however, have moved away from a strict application of the requirement of four unities of title to an examination of the intent of the parties. (See, e.g., Tenhet v. Boswell, supra, 18 Cal.3d 150, 156–157, 133 Cal.Rptr. 10, 554 P.2d 330; see also 8 Hastings L. J. 290, 298, com., Severance of Joint Tenancy in California (1957).)
5. During the trial, counsel for appellants conceded that decedent clearly intended to terminate the joint tenancies by closing the accounts and redepositing the funds in his name alone. Thus, the issue before the court with respect to those accounts which were proved to have been opened with funds withdrawn from joint tenancy accounts, was whether, as a matter of law, the decedent's unilateral acts resulted in severance of the joint tenancies.
6. These two cases are distinguishable from the facts of this case because in this case neither party offered any evidence to rebut the Financial Code section 852 presumption that the those accounts which the documentary evidence disclosed were held jointly with right of survivorship were intended to be joint tenancy accounts. For the first time on appeal, appellants seek to establish that decedent and Graple Propst intended the funds to be community property, despite the form of title. For reasons stated infra, we decline to consider the issue.
7. Consistent with our interpretation of the Harris I decision as being predicated upon the oral agreement between Mr. and Mrs. Harris that all of their property would be held in joint tenancy, the different result reached in Harris II with respect to the purchase of real property could have been explained by the fact that under existing law an oral agreement to hold real property as joint tenants was invalid. (See Harris II, 9 Cal.2d at p. 659, 72 P.2d 873.)
8. Specifically, the legislative committee comment states: “With respect to the spouses and those claiming under them, Section 5305 reverses the presumption under former law that community funds deposited into a joint account with right of survivorship are presumed to be converted into true joint tenancy funds and to lose their character as community property. See In re McCoin, 9 Cal.App.2d 480 [50 P.2d 114]․ See also Griffith, Community Property in Joint Tenancy Form, 14 Stan.L.Rev. 87, 91–93 (1961). The former presumption was inconsistent with the general belief of married persons. Married persons generally believe that community funds deposited in a joint tenancy account remain community property. See Griffith, supra at 90, 95, 106–109. The presumption created by Section 5305 is consistent with this general belief.” (See legis. committee com., Deering's Ann. Probate Code (1988 pocket supp.) p. 66.)
9. The legislative committee comment to Probate Code section 5101 states as follows: “The limitation of this part to credit unions and industrial loan companies is not intended to preclude a court from applying a rule set out in Chapter 3 (commencing with Section 5301) to a multiple-party account in another type of financial institution.” (See legis. committee com., Deering's Ann. Probate Code (1988 pocket supp.) p. 63.)
10. Financial Code section 852 provides, in pertinent part: “When a deposit is made in a bank in the names of two or more persons, whether minor or adult, in such form that the moneys in the account are payable to the survivor or survivors then such deposit and all additions thereto shall be the property of such persons as joint tenants.”
11. Although we agree with appellants that neither the certificate nor the bank ledger constituted the depositor agreement between the bank and the parties to the account, we may nonetheless consider these documents as evidence of the parties intent where ownership between the parties is disputed. (See, e.g., Crocker–Anglo Nat. Bk. v. American Tr. Co., supra, 170 Cal.App.2d 289, 297, 338 P.2d 617.)
ROUSE, Associate Justice.
KLINE, P.J., and SMITH, J., concur.