decided: October 3, 1975.
ESTATE OF ELMINA R. BRANT, DECEASED. APPEAL OF THE COMMONWEALTH OF PENNSYLVANIA
Vincent J. Dopko, Deputy Atty. Gen., Harrisburg, for appellant.
Cassin W. Craig, Norristown, for appellee Lois H. Brownback.
Robert B. Brunner, Norristown, for appellee, Robert B. Evans, Executor of Est. of Elmina R. Brant, Dec'd; Wisler, Pearlstine, Talone, Craig & Garrity, Brunner, Conver & Glackin, Norristown, of counsel.
Jones, C. J., and Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Manderino, J., filed a dissenting opinion in which Nix, J., joins.
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OPINION OF THE COURT
This is another inheritance tax appeal, consuming judicial time and the litigants' resources, which might have been avoided had there been adequate explanation of the alternatives to and consequences of a joint tenancy savings account to a depositor who sought merely a convenience account. See Gillespie Estate, 462 Pa. 467, 341 A.2d 471 (1975); Olson Estate, 447 Pa. 483, 291 A.2d 95 (1972); Commonwealth v. Nolan's Estate, 345 Pa. 98, 26 A.2d 308 (1942); Cochrane's Estate, 342 Pa. 108, 20 A.2d 305 (1941).
In 1964 Lois H. Brownback (Depositor and appellee) opened a savings account with her own funds, naming her friend, Elmina R. Brant (Decedent), as joint tenant. It appears that the only reason for the joint account was to provide access to Depositor's savings if she should need them, at a time when she was unable, due to illness or other reasons, to make a withdrawal. No present or future transfer of any interest in the funds deposited was intended.
Decedent died in 1972. The Commonwealth assessed one half the joint account as an asset of her estate under section 241 of the Inheritance and Estate Tax Act of 1961.*fn1 Depositor appealed the assessment of the tax
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to the Court of Common Pleas of Montgomery County, Orphans' Court Division, which sustained her appeal.*fn2 It reasoned that section 241 does not apply where there is no actual transfer of any interest in the property "jointly" held.*fn3 In its opinion, the court noted that Olson Estate, 447 Pa. 483, 291 A.2d 95 (1972) (holding that in the absence of fraud, accident or mistake in opening the account, joint accounts of the type here at issue are taxable under the Inheritance and Estate Tax Act of 1961), was apparently controlling, but attempted to distinguish that case from the present situation.*fn4 As that cannot successfully be done, we reverse.*fn5
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In Olson Estate, as in this case, the surviving joint tenant had contributed all of the funds in a joint account. The orphans' court specifically found that the survivor had rebutted the presumption that he intended to make a gift to his deceased co-tenant, thus indicating that the account there was also a convenience account. Nevertheless, we held that one-half of the value of the account was taxable pursuant to section 241, stating:
"Section 241 in clear and specific language ['When any property . . . is deposited in a financial institution in the names of two or more persons . . . .'] imposes a tax upon a joint account with a right of survivorship, upon the death of one of the joint tenants. The enhanced 'right to the immediate
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ownership or possession and enjoyment of the whole property' thus accruing to the survivor is deemed a statutory transfer subject to tax.
"The Commonwealth having established the existence of these joint accounts with the right of survivorship, its claim to the tax could only be defeated by clear and convincing proof that the accounts were created as a result of fraud, accident or mistake."
447 Pa. at 486-87, 291 A.2d at 97 (emphasis added);*fn6 accord Gillespie Estate, 462 Pa. 467, 341 A.2d 471 (1975); Commonwealth v. Nolan's Estate, 345 Pa. 98, 26 A.2d 308 (1942); Cochrane's Estate, 342 Pa. 108, 20 A.2d 305 (1941).
Here the signature card signed by Depositor and used to open the account read and appeared, in relevant part, as follows:
"We, intending to be legally bound hereby, open this account in the [saving fund], and agree that all monies deposited therein shall be PAYABLE TO EITHER OR THE SURVIVOR OF US and we also agree to the three provisions on the reverse side of this card."
There is no claim of fraud, and "[t]his Court has repeatedly held that in the absence of proof of fraud 'failure to read is an unavailing excuse or defense and cannot justify an avoidance, modification or nullification of the contract or any provision thereof.'" Olson Estate, 447 Pa. 483, 488, 291 A.2d 95, 98 (1972). Here, as in Gillespie, Olson, Nolan and Cochrane, there was no accident or mistake in the opening of the account. Depositor intended
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to sign the card used to open the account. A careful reading of that card would have revealed the potential transfer. Neither a failure to read a card opening a joint tenancy account, nor ignorance of the tax consequences of such an account upon the death of one of the joint tenants, is an "accident or mistake" sufficient to avoid imposition of the tax. Depositor, therefore, has failed to provide "clear and convincing proof" that the account was "created as a result of fraud, accident or mistake."
Decree reversed and remanded for the entry of a decree consistent with this opinion. Each party pay own costs.
MANDERINO, Justice (dissenting).
I dissent. The evidence in this case is clear that appellee never intended to transfer any ownership interests or rights to the decedent. The joint account had been set up as a convenience account only. Under Section 241 of the Act of June 15, 1961, P.L. 373, 72 P.S. § 2485-241 (1964), a transfer subject to tax is defined as the accrual of the right to the immediate ownership or possession and enjoyment of the whole property upon the death of one of the joint tenants. Since appellee never intended to transfer any money or rights to the decedent, she could not, upon the death of the decedent, have accrued any rights which she did not already possess. See In re Estate of Gillespie, 462 Pa. 467, 341 A.2d 471 (1975) (Manderino, J., dissenting). Thus, there was no transfer upon which the tax could be imposed.