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STERLING v. SMITH (04/18/63)

April 18, 1963

STERLING
v.
SMITH, APPELLANT.



Appeal, No. 32, Feb. T., 1963, from order of Court of Common Pleas of Luzerne County, March T., 1959, No. 571, in case of Josiah T. Sterling et al. v. Francis R. Smith, Insurance Commissioner, et al. Order affirmed.

COUNSEL

Gifford Cappellini, with him Thomas C. Moore, and John T. Curtin, Special Assistant Attorney General, for Insurance Commissioner, appellant.

Ralph J. Johnston, with him Thomas F. Farrell, Jr., for appellees.

Before Rhodes, P.j.ervin, Wright, Woodside, Watkins, Montgomery, and Flood, JJ.

Author: Ervin

[ 200 Pa. Super. Page 545]

OPINION BY ERVIN, J.

Josiah T. Sterling and Stephanie A. Sterling, appellees, sold real estate which they owned as tenants by the entireties in January 1961. Eight thousand dollars of the proceeds received from the sale of said property was deposited in a savings account in the Forty Fort State Bank, garnishee, on January 16, 1961, in the names of the appellees as husband and wife. On April 14, 1961, for the purpose of purchasing a new property as tenants by the entireties, Josiah T. Sterling withdrew the sum of $5,600.00 from the above mentioned savings account and deposited this amount in his own individual checking account. Both of the appellees agreed that this amount was to be used in the purchase of the new property and in the payment of certain joint bills and it was done for the convenience of both appellees, since they did not have a checking account in joint names. The appellees, in conjunction with the purchase of the new property, had made an application to the Forty Fort State Bank, garnishee, for a mortgage to finance the balance of the purchase price of the new property. On April 18, 1961 appellees met at the Forty Fort State Bank for the purpose of closing the transaction for the purchase of the new property. At this meeting Josiah T. Sterling, husband-appellee, appellee,

[ 200 Pa. Super. Page 546]

    made out a check in the sum of $4,911.15 to the order of Forty Fort State Bank and left the same with the bank officer who was handling the transaction. This check was placed in the bank's folder pending recording of the papers in connection with the purchase of the new property. On April 19, 1961 attachment execution was served on Forty Fort State Bank as garnishee on a judgment which had been obtained by the appellant against Josiah T. Sterling alone. The difference between the aforementioned check of $4,911.15 and the aforementioned deposit of $5,600.00 was applied to joint debts of the appellees. The court below dismissed exceptions to the trial judge's findings in favor of the appellees and entered judgment in favor of the appellees, Josiah T. Sterling and Stephanie A. Sterling, and against the appellant, Francis R. Smith, Insurance Commissioner of the Commonwealth, in the amount of $3,058.54, and directed the Forty Fort State Bank, garnishee, to pay said sum to the appellees.

The rationale of the decision of the court below is that the money, even though transferred to the individual checking account of the husband-appellee, remained tenancy by the entireties property. The court below, to support its findings, reasoned as follows; "The source of the funds was from real estate owned and sold as Tenants by the Entireties. After transfer to the checking account of Josiah T. Sterling, payment from the fund was made on the husband's and wife's Joint Income Tax Return. Closing negotiations with the Garnishee Bank further evidenced the contemplated use of the checking account for the acquisition of new real estate to be owned by both Plaintiffs.

"Where property is held in the names of husband and wife, the presumption is that they hold it by Entireties. Bank deposits and similar choices in action payable to husband and wife or to husband or wife, are tenancies by the Entireties with all the incidents relating

[ 200 Pa. Super. Page 547]

    thereto. Either spouse presumptively has the power to act for both, so long as the marriage subsists, in matters of Entireties without any specific authorization, provided the proceeds of such action inure to the benefit of both and the estate is not ...


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