Wilson County v. Wooten

111 S.E.2d 875 (1960)

251 N.C. 667

WILSON COUNTY, a Municipal Corporation, v. Maude H. WOOTEN, individually, and Maude H. Wooten, executrix of the Will of Mamie L. Harrell, deceased.

No. 248.

Supreme Court of North Carolina.

January 14, 1960.

*876 Carr & Gibbons, Wilson, for plaintiff.

Moore & Moore, Wilson, for defendant.

DENNY, Justice.

It is conceded that Mamie L. Harrell and Maude H. Wooten established a joint savings account in the National Bank of Wilson pursuant to a contract duly executed by the parties, referred to herein-above as plaintiff's Exhibit B, and which reads as follows:

"We agree and declare that all funds now, or hereafter, deposited in this account are, and shall be our joint property and owned by us as joint tenants with right of survivorship, and not as tenants in common; and upon the death of either of us any balance in said account shall become the absolute property of the survivor. The entire account or any part thereof may *877 be withdrawn by, or upon the order of either of us or the survivor. "It is especially agreed that withdrawals of funds by the survivor shall be binding upon us and upon our heirs, next of kin, legatees, assigns and personal representatives."

All deposits in the above account were made by the decedent. Therefore, the question for determination is whether a creditor of the decedent has a claim against the decedent's money deposited in such account, superior to the rights of the surviving tenant. There seems to be no question about the right of a creditor to levy upon and take the interest of a living tenant in a joint tenancy for the satisfaction of his debts. Powell on Real Property (1956), section 618; Thompson on Real Property, Joint Tenancy, Volume 4, section 1783; Woolard v. Smith, 244 N.C. 489, 94 S.E.2d 466; Spikings v. Ellis, 290 Ill.App. 585, 8 N.E.2d 962; Gwinn v. Commissioner of Internal Revenue, 287 U.S. 224, 53 S. Ct. 157, 77 L. Ed. 270.

The survivorship in joint tenancies by operation of law has been abolished in this jurisdiction. G.S. § 41-2. However, such a tenancy may be created by contract. Taylor v. Smith, 116 N.C. 531, 21 S.E. 202; Jones v. Waldroup, 217 N.C. 178, 7 S.E.2d 366; Wilson v. Ervin, 227 N.C. 396, 42 S.E.2d 468; Bunting v. Cobb, 234 N.C. 132, 66 S.E.2d 661; Bowling v. Bowling, 243 N.C. 515, 91 S.E.2d 176.

Under common law principles applicable to joint tenancies the survivor takes the entire property, free and clear of the claims of heirs or creditors of the deceased tenant, and the personal representative of such tenant has no right, title or interest therein. Spikings v. Ellis, supra; Petty v. Petty, 220 Ky. 569, 295 S.W. 863; In re Jackson's Estate, 112 Cal. App. 2d 16, 245 P.2d 684; In re Kaspari's Estate, N.D., 71 N.W.2d 558; Hill v. Havens, 242 Iowa 920, 48 N.W.2d 870; In re Ware's Estate, 218 Miss. 694, 67 So. 2d 704; In re Zaring's Estate, 93 Cal. App. 2d 577, 209 P.2d 642; Able-Old Hickory Building & Loan Ass'n v. Polansky, 138 N.J.Eq. 232, 47 A.2d 730; Bradley v. State, 100 N.H. 232, 123 A.2d 148; Guitner v. McEowen, 99 Ohio App. 32, 124 N.E.2d 744; Hoover v. Hoover, 90 Ohio App. 148, 104 N.E.2d 41; City of Corning v. Stirpe, 262 App.Div. 14, 27 N.Y.S.2d 418, affirmed 293 N.Y. 808, 59 N.E.2d 176; Goggin v. Goggin, 59 R.I. 145, 194 A. 730, 113 A.L.R. 569; Musa v. Segelke & Kohlhaus Co., 224 Wis. 432, 272 N.W. 657, 111 A.L.R. 168; 48 C.J.S. Joint Tenancy § 1, p. 910, et seq.; 14 Am.Jur., Cotenancy, section 6, page 80.

Our Legislature has not enacted any statute with respect to the rights of creditors against property held by virtue of a contract creating a joint tenancy with right of survivorship, except as to the right of survivorship in bank deposits created by a written agreement by husband and wife. Chapter 404 of the Session Laws of North Carolina, 1959, codified as G.S. § 41-2.1.

Therefore, we are constrained to follow the applicable principles of the common law with respect to such tenancies and to apply them in this case. To hold otherwise would invade the field of legislation, which is outside the proper sphere of judicial interpretation.

In the absence of allegations and proof that a joint tenancy with the right of survivorship was made with the intent to defraud creditors, the surviving tenant will take the assets held in such tenancy, free from the claims of the heirs or creditors of the deceased tenant. Bradley v. State, supra. It follows, therefore, that since there is no allegation of fraud or evidence tending to show that the tenancy involved herein was established with the intent to defraud the creditors of the deceased tenant, we hold that the defendant, Maude H. Wooten, took the proceeds of the savings account involved, free from the claims of *878 the heirs or creditors of the deceased tenant, Mamie L. Harrell.

Hence, the judgment of the court below is in all respects

Affirmed.

HIGGINS, J., took no part in the consideration or decision of this case.