Appeal, No. 72, Jan. T., 1960, from decree of Court of Common Pleas of Luzerne County, March T., 1958, No. 4, in equity, in case of Mary Stemniski v. Michael Stemniski. Decree affirmed.
John J. Poserina, Jr., with him Stanley M. Greenberg, and Ochman and Greenberg, for appellant.
Charles A. Shea, Jr., with him Shea and Shea, for appellee.
Before Jones, C.j., Bell, Musmanno, Jones, Cohen, Bok and Eagen, JJ.
OPINION BY MR. JUSTICE BOK.
At the time of the adjudication the parties, husband and wife since 1931, were separated. They have two children, one of age.
In 1956 they owned, from their joint earnings and as tenants by the entireties, $13,625 in United States Savings Bonds, Series E, cash in three bank accounts totaling $2661.27, and two parcels of improved land, all of this property in Luzerne County. The bonds stood in their joint names, alternatively, and were kept in a safety deposit box to which both had access.
During the late autumn of 1956 defendant redeemed all but $3000 of the bonds and put $2500 of it
into a new safety deposit box standing in his name only. Plaintiff has the remaining $500 of these bonds. In the spring of 1959 defendant withdrew all but a few dollars of the three bank accounts and shortly after opened two savings accounts in his name alone: into one of these he put $6,069.90, with $246.45 interest, in trust for his two sons, and in the other he put $5,606.07, of which he later withdrew $5000 and put it in his checking account. These two sums represent the proceeds of his redemption of the Series E bonds. At trial he had $1200 left of the $5000 in his account. Since the separation defendant paid $750 out of entireties money for taxes on the real estate. Admittedly, only these taxes were used for the joint benefit of the parties out of the money appropriated by defendant.
Plaintiff began this action in equity to compel defendant to account for the bonds and savings accounts and to pay one-half of them to her. The Chancellor gave this relief by directing such payment, minus the taxes and the $500 of bonds in plaintiff's possession. Defendant has appealed.
He argues that co-ownership cannot exist in a Series E bond because under the Treasury Regulations a co-owner must be regarded as a third party beneficiary who can achieve title only when he survives his co-owner. He bases this argument upon the word ing of 31 C.F.R. 313.60(a), that "... upon payment to either co-owner, the other co-owner shall cease to have any interest in the bond." We fail to follow. The regulations are designed to protect the government rather than to control the relationship between co-owners, and are silent on the right of either to possession in ...