{ "id": 2511654, "name": "In re Estate of Charles R. Wright, Deceased-(Arnold C. Wright, Exr., Petitioner-Appellee, v. Farmers State Bank of Ferris, Respondent-Appellee-(Mary Lowe, Respondent-Appellant.))", "name_abbreviation": "Wright v. Farmers State Bank", "decision_date": "1974-02-28", "docket_number": "No. 73-254", "first_page": "894", "last_page": "901", "citations": [ { "type": "official", "cite": "17 Ill. App. 3d 894" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "167 N.E.2d 257", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1960, "opinion_index": 0 }, { "cite": "25 Ill.App.2d 514", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 5786507 ], "year": 1960, "pin_cites": [ { "page": "527-29" } ], "opinion_index": 0, "case_paths": [ "/ill-app-2d/25/0514-01" ] }, { "cite": "92 P.2d 254", "category": "reporters:state_regional", "reporter": "P.2d", "year": 1939, "opinion_index": 0 }, { "cite": "199 Wash. 549", "category": "reporters:state", "reporter": "Wash.", "case_ids": [ 483448 ], "year": 1939, "opinion_index": 0, "case_paths": [ "/wash/199/0549-01" ] }, { "cite": "32 Ill.2d 134", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2839254 ], "year": 1965, "opinion_index": 0, "case_paths": [ "/ill-2d/32/0134-01" ] }, { "cite": "104 Ore. 202", "category": "reporters:state", "reporter": "Or.", "case_ids": [ 4630059 ], "weight": 2, "year": 1922, "opinion_index": 0, "case_paths": [ "/or/104/0202-01" ] }, { "cite": "225 N.E.2d 646", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1967, "opinion_index": 0 }, { "cite": "81 Ill. App.2d 378", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 2542077 ], "year": 1967, "opinion_index": 0, "case_paths": [ "/ill-app-2d/81/0378-01" ] }, { "cite": "125 N.E.2d 600", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1955, "opinion_index": 0 }, { "cite": "5 Ill.2d 417", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2703246 ], "year": 1955, "opinion_index": 0, "case_paths": [ "/ill-2d/5/0417-01" ] }, { "cite": "205 Ill. 242", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 3283305 ], "year": 1903, "opinion_index": 0, "case_paths": [ "/ill/205/0242-01" ] }, { "cite": "247 Iowa 371", "category": "reporters:state", "reporter": "Iowa", "case_ids": [ 4449332 ], "weight": 2, "year": 1955, "pin_cites": [ { "page": "374" }, { "page": "747" } ], "opinion_index": 0, "case_paths": [ "/iowa/247/0371-01" ] }, { "cite": "390 Ill. 118", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2509394 ], "year": 1945, "pin_cites": [ { "page": "125" } ], "opinion_index": 0, "case_paths": [ "/ill/390/0118-01" ] }, { "cite": "138 N.E.2d 840", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1956, "opinion_index": 0 }, { "cite": "12 Ill.App.2d 209", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 5166605 ], "year": 1956, "opinion_index": 0, "case_paths": [ "/ill-app-2d/12/0209-01" ] }, { "cite": "232 Ill.App. 12", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 3090114 ], "year": 1924, "pin_cites": [ { "page": "17" } ], "opinion_index": 0, "case_paths": [ "/ill-app/232/0012-01" ] }, { "cite": "71 N.E. 748", "category": "reporters:state_regional", "reporter": "N.E.", "year": 1904, "opinion_index": 0 }, { "cite": "179 N.Y. 112", "category": "reporters:state", "reporter": "N.Y.", "case_ids": [ 2318653 ], "year": 1904, "opinion_index": 0, "case_paths": [ "/ny/179/0112-01" ] }, { "cite": "217 N.E.2d 444", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 1966, "opinion_index": 0 }, { "cite": "69 Ill.App.2d 352", "category": "reporters:state", "reporter": "Ill. App. 2d", "case_ids": [ 2592857 ], "weight": 2, "year": 1966, "opinion_index": 0, "case_paths": [ "/ill-app-2d/69/0352-01" ] }, { "cite": "204 N.E.2d 1", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "year": 1965, "opinion_index": 0 }, { "cite": "301 N.E.2d 465", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1973, "opinion_index": 0 }, { "cite": "54 Ill.2d 532", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 2934685 ], "year": 1973, "opinion_index": 0, "case_paths": [ "/ill-2d/54/0532-01" ] } ], "analysis": { "cardinality": 872, "char_count": 17876, "ocr_confidence": 0.733, "pagerank": { "raw": 1.0254761685498886e-07, "percentile": 0.5466069643442533 }, "sha256": "d083a244a80671c8b02fd5725c7cef14207fd9855b98086b2616c87d9831eedf", "simhash": "1:2ee46df51a707498", "word_count": 2959 }, "last_updated": "2023-07-14T21:35:57.081722+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "In re Estate of Charles R. Wright, Deceased\u2014(Arnold C. Wright, Exr., Petitioner-Appellee, v. Farmers State Bank of Ferris, Respondent-Appellee\u2014(Mary Lowe, Respondent-Appellant.))" ], "opinions": [ { "text": "Mr. JUSTICE ALLOY\ndelivered the opinion of the court:\nThis is an appeal from a judgment of the Circuit Court of Hancock County finding that assets contained in a certaiii savings account established by a decedent were properly assets of such decedent\u2019s estate rather than those of a purported individual beneficiary named in the bank\u2019s records of the account.\nThe record before us discloses that on September 28, 1971, the decedent, Charles R. Wright, instructed the cashier of the Farmers State Bank of Ferris, Ferris, Illinois, an Illinois banking institution, to prepare a bonus savings account to be denominated \u201cCharles Wright, Pay on Death to Mary Lowe.\u201d The decedent\u2019s instructions were followed by the bank, and the account was established and originally funded with a deposit of $2,000, which sum apparently came from another savings account (of decedent) held by the Fanners State Bank in the name of decedent alone. Colloquy between the decedent and the cashier brought out during the proceedings below indicates that decedent did not intend that appellant, Mary Lowe, have withdrawal rights during decedent\u2019s lifetime. No signature cards, or any instruments, were executed in connection with the account. Subsequent deposits thereto were made by decedent, who also made one $500 withdrawal during his lifetime. Such withdrawal, however, was followed 9 days later with an equivalent deposit by decedent. At the time of decedent\u2019s death on October 4, 1972, there was a balance in the account of some $6,000. As of November 21, 1972, the account balance, including accrued interest, stood at $6,182.36.\nThe decedent\u2019s last will and testament, which mentioned no savings accounts and made no disposition for the benefit of appellant, was duly admitted to probate, and appellee, Arnold C. Wright, was appointed executor of decedent\u2019s estate. The only beneficiaries of decedent\u2019s probate estate are his sons, who are to share equally in the assets thereof.\nOn December 7, 1972, appellant made formal demand on the Farmers State Bank of Ferns for delivery of the funds contained in the account in question. Such demand was rejected by the bank because of the competing claims to the account, and citation proceedings instituted by ap-pellee followed in the circuit court, which ultimately entered the judgment and order in favor of appellee from which this appeal is taken.\nTestimony during the citation proceeding established that appellant and decedent had met some 16 months prior to the latter\u2019s death, and that during that time a close relaionship was maintained between the two. Marriage between them was contemplated, but apparently was ultimately rejected because of decedent\u2019s ill health.\nIt should be noted at this juncture that we do not here deal with any rights of a surviving spouse to the decedent\u2019s estate (see Montgomery v. Michaels, 54 Ill.2d 532, 301 N.E.2d 465 (1973)), nor with- any rights of creditors of decedent or his estate, which estate, excluding the account in- question, was solvent. Rather, we are here interested in only the rights of named beneficiaries of decedent\u2019s estate (his sons) vis-a-vis those of appellant.\nIn the analysis of matters of the character now before us, a court of appeal would not properly discharge its obligation if it avoids a construction which requires that the court make a determination on the basis of rational and reasonable principles, rather than simply recite that the legislature has not acted in the area and that, therefore, the court of appeal should presume some legislative wisdom or policy arising solely from such omission. This is notably true in the issues before us.\n' We are all familiar with the forms used in issuance of United States Bonds containing a so-called P.O.D. or \u201cPayable on Death\u2019\u2019 provision which appeared in substantially the form as we find in the account before us. In 1943, a few years after these bonds had been issued and had been recognized and acted upon, on the basis of the specific language in the bonds, section 2 of the Joint Rights and Obligations Act (Ill. Rev. Stat. 1971, ch. 76, \u00a72) was amended to provide that these United States Government obligations would become the property of the alternative named payee on the death of the purchaser. The Illinois act purported to create a right of survivorship in such bonds. We may be sure that nowhere could it be pointed out or successfully contended that the right of survivorship and the vesting of the interest in the surviving beneficiary was dependent upon the Illinois act. All interest in the bond clearly vested in the person named as (he beneficiary following the death of the principal party then designated. The Illinois act obviously operated simply to confirm or codify a rule of law applicable to such bonds.\nIt is also pointed out that, in 1955, the Illinois legislature added language to the Illinois Savings and Loan Act (Ill. Rev. Stat. 1971, ch. 32, \u00a7 770(c)), vesting benefits in the survivor where a savings and loan account was in the form as we have in the bank account before us. It is true that even in construing such account, our colleagues seized upon the legislative provision as the sole basis for justifying payment to the beneficiary upon death of the original party. We do not believe that this was a sound approach to the problem although we, also typically, find comfort in legislative provisions which specifically authorize a disposition which we believe to be sound or desirable.\nTo contend, on the basis of the absence of a similar provision in the Illinois Banking Act, that the legislature somehow intended that persons designated as beneficiaries in bank accounts, in the event of the death of die original party, were not to have the benefit of such clear arrangement, we believe, does not furnish a rational basis of distinction. Where the desire to have such payment made to a beneficiary designated in a document such as Federal bonds, or in savings and loan accounts, or in a bank account such as we have before us, is clear, we believe that the intervention of a banking institution or the Federal Government, as the agency which is to hold and make the payment, actually fulfills the requisite condition that the intent of the settlor be unquestioned. To say then that such intention could not be carried out simply because there is no legislative sanction, we believe, is not a reasonable or sound determination. Wherever possible, and where not clearly contrary to established policy, statutes or laws, courts of review should carry into effect the intent of the parties rather than frustrate such intent by erecting theoretical barriers not conceived by the party to prevent such intent from being carried out.\nNo one doubts what the intent was in the instant case, nor is there any basis for failing to carry out such intent, other than a technical interpretation of the applicability of the Illinois Wills Act by the court. We believe it is high time for the courts of review in this State to recognize and give effect to accounts of the character before us, rather tiran to lamely assert that a public policy invalidating such disposition is somehow divined or arises, obscurely, from the circumstance that there is no specific legislation in this area as to bank accounts. If there is a reluctance to deal with this problem specifically on the basis that legislation which has been enacted simply codified an applicable rule of law, there still exists applicable legal principles independently of legislative action, which furnish a rational basis upon which to give effect to the intent of the parties.\nIt is principally maintained by appellant that decedent, in opening and maintaining the account in question, established a so-called \u201cTotten\u201d or tentative trust, which device was recognized as valid in Illinois by our supreme court in the case of In re Petmlia, 32 II1.2d 134, 138, 204 N.E.2d 1 (1965), by the following language:\n\u201c[W]e accept the position adopted by the American Law Institute in \u00a758 of the Restatement (Second) of Trusts: \u2018Where a person makes a deposit in a savings account in a bank or other savings organization in his own name as trustee for another person intending to reserve a power to withdraw the whole or any part of the deposit at any time during his lifetime and to use as his own whatever he may withdraw, or otherwise to revoke the trust, the intended trust in enforceable by the beneficiary upon the death of the depositor as to any part remaining on deposit on his death if he has not revoked the trust.\u2019 \u201d\nSee also In re Estate of Anderson, 69 Ill.App.2d 352, 217 N.E.2d 444 (1st Dist. 1966), and In re Totten, 179 N.Y. 112, 71 N.E. 748 (1904).\nIn support of the proposition that a recognized \u201cTotten\u201d or tentative trust was here created, appellant refers us to, inter alia, the following circumstances: at the time the account in question was opened, the decedent apparently withdrew $2000 from his regular savings account (held in his name alone) and immediately used such money to fund the new account. Further, decedent continued to make significant deposits to the account in question throughout the rest of his life, while making only one withdrawal of $500, which withdrawal was \u201cmade up\u201d with a deposit in the amount of $500 only 9 days later. Decedent and appellant were affectionate friends; their plans for marriage being thwarted, however, by the condition of decedent\u2019s health.\nAppellant points out that the primary object of all rales of construction in interpretation is to arrive at and give effect to the mutual intentions of the parties as expressed in the whole agreement and the. circumstances surrounding the transaction. \u201cIn the interpretation of any particular clause of trust agreement, the court is required to examine the entire agreement and may also consider the relation of the parties, their connection with th\u00e9 subject-matter of the agreement, the circumstances under which it was made, and the purpose for which it was made.\u201d Brinkerhoff v. Ridgely, 232 Ill.App. 12, 17 (3rd Dist. 1924); see also Merchants National Bank of Aurora v. Weinold, 12 Ill.App.2d 209, 138 N.E.2d 840 ( 2nd Dist. 1956).\nIn addition, we are reminded by appellant of the admonitions contained in Golstein v. Handley, 390 Ill. 118, 125 (1945), that \u201c[n]o particular form of words or language is necessary in a gift of property to create a trust,\u201d and in Pap v. Pap, 247 Iowa 371, 374, 73 N.W.2d 742, 747 (1955), where it is said that \u201c\u2018it is not necessary that the word \u201ctrust\" or \u201ctrustee\u201d be used in order to create a trust s * *\u2019 \u201d, Moreover, argues appellant, it is clear that wholly parol trusts in personal property are recognized in Illinois (Maher v. Aldrich, 205 Ill. 242 (1903)), and since a trust has been here established, there is no compelling reason for this court to thwart the settlor\u2019s intent.\nAppellee, on the other hand, argues that \u201cpayable on death\u201d accounts in banks are alien to the common law, and until rendered effective by affirmative legislative action, they must be held violative of public policy unless in compliance with the Statute of Wills (Ill. Rev. Stat. 1971, ch. 3f \u00a7 43). It is further maintained by appellee that the evidence adduced below failed to establish that decedent created a \u201cpresent interest\u201d in appellant in the purported trust res during the lifetime of decedent, a recognized requisite of a valid inter vivos trust (see Farkas v. Williams, 5 Ill.2d 417, 125 N.E.2d 600 (1955)). In support of these conclusions, appellee relies heavily upon the case of In re Estate of Gubala, 81 Ill. App.2d 378, 225 N.E.2d 646 (1st Dist. 1967), where a \u201cpayable on death\u201d account held in a savings and loan association was upheld, but only because of the existence of specific enabling legislation providing therefor (Ill. Rev. Stati, ch. 32, \u00a7 770(c)), which legislation is not applicable to accounts held in banks.\nWhile the court in Gubala categorized \u201cpayable on death\u201d accounts as pure testamentary dispositions, we do not think that is perforce true in all cases where the words \u201cpayable on death\u201d or their equivalent appear in the title of an account. We believe, rather, that each case must be decided upon its own facts, and although it is true that the words \u201cPay upon Death\u201d appear in the name of the account sub judice, it is also true that largely all of the indicia surrounding the creation of a \u201cTotten\u201d trust are equally in being. Thus, it was shown below that decedent and appellant had been close and affectionate friends; that, indeed, marriage had been contemplated, but rejected due to decedent\u2019s ill health. Decedent clearly established the account in question with an intent to benefit appellant, as he apparently transferred funds from an account held in his name alone in order to originally fund the new account, which named appellant a beneficiary thereof, and while it is true that he manifested an intent that appellant\u2019s possession and enjoyment of tiie account would not occur until his death, that is a feature of many inter vivos trusts given judicial sanction. (See e.g. In re Estate of Anderson, 69 Ill.App.2d 352, 217 N.E.2d 444 (1st Dist. 1966); Allen v. Hendrick, 104 Ore. 202, 206 P. 733 (1922).) Particularly, as noted by our supreme court in Petralia, 32 Ill.2d 134, 204 N.E.2d 1 (1965), at pages 137-138: \u201c[t]he nature of the beneficiary\u2019s present interest under [a tentative trust) is well stated in 1 Scott, The Law of Trusts, 353-354: \u2018The declaration of trust immediately creates an equitable interest in the beneficiaries although the enjoyment of the interest is postponed until the death of the settlor, and although the interest may be divested by the exercise of the power of revocation.\u2019 The fact that the beneficiary\u2019s actual enjoyment of the trust is contingent on [the settlor\u2019s] death without first having revoked the trust by withdrawing the balance in the account does not negate the existence of a present interest in the [beneficiary] during [the settlor\u2019s] lifetime, even though that interest may have been highly destructible.\u201d\nUnder the circumstances, we do not believe it may properly be said, as maintained by appellee, that appellant had no \u201cpresent interest\u201d in tire account during the lifetime of decedent. On the contrary, she was a beneficiary named in the account and in our judgment thus held a present, although wholly defeasible, interest therein contemporaneous with decedent\u2019s superior rights. The latter\u2019s death, however, terminated his rights, and rendered appellant\u2019s, indefeasible.\nThat we find, in accordance with the foregoing, that a tentative trust has been here established would seem to end our inquiry. However, a further argument advanced by appellant in our view serves as a basis for an alternate holding which we deem to be valid whether or not decedent established a trust in creating the account in question. We accordingly deem it wise t\u00f3 consider appellant\u2019s alternate theory, which maintains that the decedent in this case entered into a perfectly valid contract with the bank naming her as a third-party beneficiary thereto. As such, she is entitled to whatever funds were contained in the account at decedent\u2019s death, pursuant to tire explicit terms of the contract. In support of this proposition, we are referred, inter alia, to 4 Corbin on Contracts, sec. 783, at pages 89-90 (1951), where it is said as follows: \u201cRarely has the third party been regarded as the beneficiary of a contract between A [the depositor] 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\u2019s creditors, C [the named beneficiary] should get the money that A has not drawn out * \u00b0 * as * * * beneficiary of the banking debtor\u2019s promise to the creditor [depositor].\u201d See also Steinert, J., dissenting in Decker v. Fowler, 199 Wash. 549, 92 P.2d 254 (1939).\nWe find appellant\u2019s third-party beneficiary contract theory quite compelling and entirely consistent with sound principles of jurisprudence. (See Dudley v. Uptown National Bank, 25 Ill.App.2d 514, 527-29, 167 N.E.2d 257 ( 2d Dist. 1960), where the third-party beneficiary theory advanced herein was made, but was found by the court to be inapplicable under the facts before it.) It is absolutely clear that decedent named appellant as the death beneficiary of the account in question, and it is equally clear that he entered into a binding contractual arrangement with the bank in connection therewith. There being no rights of creditors or a surviving spouse here in question, we see no legally cogent reason for thwarting the decedent\u2019s clear dispositive intent concerning the sums held in the account at defendant\u2019s death.\nIn accordance with the foregoing, we find that decedent either established a valid \u201cTotten\u201d trust with respect to the account in question, or entered into a valid third-party beneficiary contract naming appellant as the beneficiary thereof. In either case, appellant is entitled to all sums in the account at the time of decedent\u2019s death. The judgment of the Circuit Court of Hancock County is thus reversed, and the cause is remanded to that court with instructions to vacate the judgment appealed from herein and to enter judgment in favor of appellant and against appellee with respect to the ownership of the savings account in question.\nReversed and remanded with instructions.\nDIXON and STOUDER, JJ., concur.", "type": "majority", "author": "Mr. JUSTICE ALLOY" } ], "attorneys": [ "Samuel J. Naylor, Pat Corcoran, and Charles Bell, all of Carthage, for appellant.", "Vilas C. Rice, of Carthage, for appellee." ], "corrections": "", "head_matter": "In re Estate of Charles R. Wright, Deceased\u2014(Arnold C. Wright, Exr., Petitioner-Appellee, v. Farmers State Bank of Ferris, Respondent-Appellee\u2014(Mary Lowe, Respondent-Appellant.))\n(No. 73-254;\nThird District\nFebruary 28, 1974.\nSamuel J. Naylor, Pat Corcoran, and Charles Bell, all of Carthage, for appellant.\nVilas C. Rice, of Carthage, for appellee." }, "file_name": "0894-01", "first_page_order": 916, "last_page_order": 923 }