Porter v. Trainor

George Rose Smith, Justice. At David Porter’s death on May 18, 1964, he held two promissory notes of $2,500 each, executed by James Carter and payable to David Porter alone. David was survived by his widow, Elizabeth Trainor Porter. The question here is whether the two notes, although payable to Porter alone, were actually owned by the couple as a tenancy by the entirety, owing to the fact that they were given for money that Porter withdrew from a joint bank account and lent to Carter. The probate judge found that there was in fact a tenancy by the entirety in the notes. The proof is so meager that it may be quickly summarized. In 1960 the Porters had about $14,000 on deposit in a joint account in a West Helena bank. It is fair to say that both spouses had contributed to the account, but there is no way of determining what each one’s contribution was ("assuming that fact to be relevant). In July of that year David lent $5,000 to James Carter, drawing a check upon the joint account for the advancement and receiving in return from Carter the two notes payable to Porter, secured by a real estate mortgage. Porter died testate almost four years later, in May of 1964. We attach no importance to the fact that his executrix, the appellant, did not inventory the notes as a part of his estate. Porter ?s widow, prior to her own death on March 18, 1966, had made no move toward recapturing the proceeds of the notes, which Carter paid off after Porter’s death. Later on, however, the executors of Mrs. Porter’s estate filed a motion in her husband’s administration proceeding, asking that the proceeds of the notes be declared to be the proprety of Mrs. Porter’s estate. This appeal is from an order granting that relief. We think the court made a mistake. Only two of our earlier cases need be mentioned. In Union & Mercantile Tr. Co. v. Hudson, 147 Ark. 7, 227 S. W. 1 (1921), the husband, only 12 days before his death, wrongfully took funds belonging to him and his wife and deposited them in a bank account in his name only. We held that his conduct was a fraud upon his widow’s rights and that the funds belongéd to her, as the surviving tenant by the entirety. By contrast, in Dickson v. Jonesboro Tr. Co., 154 Ark. 155, 242 S. W. 57 (1922), we held that where the husband, “with the knowledge and consent of his wife,” withdrew funds from a joint bank account and used them to purchase securities payable to bearer, the tenancy by the entirety was destroyed, so that the wife was not entitled to the securities upon her husband’s death. The controlling rule ,is so clear that we see no serious problem in the case at bar. Thei;e is no persuasive proof that David Porter defrauded his wife in writing a $5,000 check upon their joint account almost four years before his death. Counsel for the appellees argue with some ingenuity that the transaction was actually a renewal of an earlier mortgage debt payable to both Mr. and Mrs. Porter, but if that were so there was no reason for Porter to advance fresh funds instead of merely renewing the old debt. When we recall that the loan to Carter was made almost four years before Porter’s death, and that his wife had access to the bank’s records of the account, there is hardly even a plausible reason to suppose that Porter secretly defrauded his wife and concealed his wrongdoing until his death. Fraud must be proved. In reaching our conclusion we have taken into account, as of course we should, the soundness of the precedent that is being laid down for the future. In our present-day society we know that millions of married couples utilize the convenience of a joint bank account, which under our law is a tenancy by the entirety. We also know that most husbands .and wives trust each other, confide in each other,, and conduct themselves with honesty and with honor in the management of then-property. It would be altogether undesirable to permit the rival heirs of the two spouses (who are the real parties in interest here) to reach far back into the past in an effort to raise a bare suspicion that one spouse may have cheated the other in the disposition of funds jointly owned. That sort of posthumous litigation is decidedly to be discouraged. Reversed. Fogleman, J., concurs.