Opinion
No. 7925DC379
Filed 18 December 1979
Banks and Banking 4 — joint account — changing nature of account — signatures of all parties Where plaintiff and his former wife executed a joint account agreement with right of survivorship pursuant to G.S. 41-2.1 for a certificate of deposit in a savings and loan association, the joint account could be changed only by the signatures of all the parties to the joint account agreement, and plaintiff's written instruction to the savings and loan association to permit withdrawals only upon signature of both joint tenants was void and not binding on plaintiff's former wife.
APPEAL by plaintiff from Vernon, Judge. Judgment entered 28 November 1978 in District Court, CATAWBA County. Heard in the Court of Appeals 30 November 1979.
Gaither Wood, by Allen W. Wood III, for plaintiff appellant.
Williams, Pannell Lovekin, by Martin C. Pannell, for defendant appellee.
On 17 January 1975, plaintiff and third-party defendant, then husband and wife, deposited $5,000 with defendant, First Federal Savings and Loan Association of Catawba County (Association), in a four-year certificate. The parties executed a Joint Account Agreement with the Right of Survivorship, which entitled either to withdraw the total amount pursuant to G.S. 41-2.1. Plaintiff left the certificate of deposit in his home in a desk drawer to which he and third-party defendant had access. Third-party defendant withdrew the $5,000 less penalty for early withdrawal on 4 January 1978.
On 20 May 1976, plaintiff executed a suspension order with defendant which reads:
"TO: FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION You are hereby instructed to suspend payment on Cert. ACcount No. 800221-2 and to permit withdrawals only on the signatures of all joint tenants, until such time as this order has been canceled in writing signed by all joint tenants and delivered to you.
SIGNATURE /s/ William E. Benfield
Plaintiff alleged in his complaint that defendant had entered an agreement to permit withdrawal of the funds only on both signatures and requested $5,000 in damages. Defendant denied the agreement and filed a third-party complaint against the wife, who filed a cross-action against plaintiff. The case was tried without a jury, and motion pursuant to G.S. 1A-1, Rule 50, of the Rules of Civil Procedure was allowed at the close of all the plaintiff's evidence. Plaintiff appealed.
Plaintiff presents one assignment of error: "Did the Trial Court err in allowing the Defendant's motion for a Directed Verdict at the close of the Plaintiff's evidence?" We find no error in the court's ruling on the merits of this case.
The account in question is controlled by the Joint Account Agreement with Right of Survivorship, which provides:
"FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF CATAWBA COUNTY, CONOVER, NORTH CAROLINA
CONOVER OFFICE
subject to the laws of North Carolina, the rules and regulations of the Federal Home Loan Bank Board and the charter and bylaws of the association as they now are or as they may hereafter be amended. It is understood and agreed that the shares hereby subscribed for are issued by the association, and all moneys paid or that may hereafter be paid thereon are paid by the undersigned, and such shares together with all accumulations thereon are held by the Association for our account, as joint tenants with right of survivorship and not as tenants in common, and that said shares may be resold subject to the by-laws of the Association, by either, before or after the death of either, and either is authorized to pledge the same as collateral security to a loan.
/s/ William E. Benfield Rt 6 Box 216 Statesville NC __________________________________________________________ Signature (Address — Street and Number) (City and State)
/s/ Fannie H Benfield ___________________________________________________________ Signature (Address — Street and Number) (City and State)"
G.S. 41-2.1 provides in part:
"Right of survivorship in bank deposits created by written agreement. — (a) A deposit account may be established with a banking institution in the names of two or more persons, payable to either or the survivor or survivors, with incidents as provided by subsection (b) of this section, when both or all parties have signed a written agreement, either on the signature card or by separate instrument, expressly providing for the right of survivorship.
(b) A deposit account established under subsection (a) of this section shall have the following incidents:
(1) Either party to the agreement may add to or draw upon any part or all of the deposit account, and any withdrawal by or upon the order of either party shall be a complete discharge of the banking institution with respect to the sum withdrawn."
We hold that the suspension order failed to bind third-party defendant. A joint account may be changed only by the signatures of all the parties to the joint account agreement or by one party's withdrawing the complete account and opening a new account. G.S. 41-2.1 does not authorize the action taken in this case, to permit only one of the joint tenants of the account in question to change it from the original agreement executed by both parties to the detriment of the other. See Badders v. Peoples Trust Company, 236 Ind. 357, 140 N.E.2d 235, 62 A.L.R.2d 1103 (1957). Thus, any agreement between the Association and plaintiff contravening G.S. 41-2.1(b)(1) was void and unenforceable.
Defendant's motion should have been made pursuant to G.S. 1A-1, Rule 41(b) rather than Rule 50 of the Rules of Civil Procedure. Rule 50 has no application in a nonjury trial. This case is remanded to the trial court to enter an order dismissing this case pursuant to G.S. 1A-1, Rule 41(b), of the Rules of Civil Procedure.
Remanded for entry of proper order to dismiss the plaintiff's case.
Judges CLARK and ARNOLD concur.