Lang v. Lang, 397 N.Y.S.2d 324 (1977)

When a joint bank account is established, each tenant immediately gains title to one-half of the funds, and withdrawal of more than one’s moiety creates a right of recovery for the other tenant during their joint lifetimes; however, this right can be negated by consent or ratification of the withdrawal.

Summary

This case addresses the legal complexities surrounding joint bank accounts, particularly concerning the rights of each tenant during their lifetimes. Jessie Lang created a joint bank account with her niece, Harriet Heller. Heller withdrew the entire balance. Lang’s estate sued Heller for the amount exceeding Heller’s half. The court examines the nature of joint tenancies in bank accounts, emphasizing that each tenant possesses an immediate, unconditional property interest in half the funds. However, one tenant’s withdrawal of more than their share gives rise to a claim by the other tenant *during their lifetimes*, which can be defeated by proof of consent. The court reversed the Appellate Division’s decision, remanding for factual review on the issue of consent.

Facts

Jessie Lang opened a joint savings account with her niece, Harriet Heller, in 1969. All funds deposited belonged to Lang. In August 1970, shortly after Lang entered a nursing home, Heller withdrew $1,094.90 from the account, allegedly for Lang’s benefit, but the nursing home records did not support this. In March 1971, Heller closed the account, withdrawing the remaining $5,469.89 and transferring it to an account in her and her husband’s name. Lang’s accountant discovered the closing withdrawal shortly before Lang’s death. The estate demanded Heller return the amount exceeding her half.

Procedural History

The Surrogate’s Court ruled that Heller was required to return the excess amount withdrawn. The Appellate Division reversed, holding that Heller was not required to return the funds. The New York Court of Appeals granted leave to appeal.

Issue(s)

Whether Heller, by withdrawing the entire balance of a joint bank account during Lang’s lifetime, was required to return the amount exceeding her one-half interest to Lang’s estate after Lang’s death, absent Lang’s consent to the withdrawal.

Holding

Yes, because while each joint tenant has the right to withdraw their moiety, withdrawing more than that creates a right of recovery for the other tenant during their lifetime, which then accrues to their estate after death, unless the withdrawal was consented to, or ratified by, the other tenant.

Court’s Reasoning

The court emphasized that opening a joint account creates an immediate property interest for each tenant in an undivided one-half of the funds, regardless of who deposited the money. Citing *Matter of Bricker [Krimer] v Krimer, 13 NY2d 22, 27*, each tenant has the right during the lifetime of the other to withdraw up to the full amount of their moiety. However, the court also noted that withdrawing more than one’s moiety establishes an absolute right in the other tenant, during the lifetime of both, to recover such excess. The court explicitly states: “[W]here a joint tenant withdraws more than his or her moiety, as was the case here, there is an absolute right in the other tenant, during the lifetime of both, to recover such excess.” However, the court also stated that the aunt could have consented to the withdrawal, or ratified it later, which would negate the right of recovery. Such consent can be express or implied, and is often discerned from circumstantial evidence. The court listed factors to consider in determining consent, including: the relationship between the parties; commingling of funds; testamentary dispositions; amounts and patterns of withdrawals; the age and condition of each tenant; the source of funds; knowledge of the withdrawal; and any protest or lack thereof. Since the Appellate Division’s reversal was based solely on the law (inviolability of the right of survivorship) without addressing the factual question of consent, the Court of Appeals reversed and remanded the case for a review of the facts to determine whether the niece met her burden of proving the excess withdrawal was with the direct or implied consent of the aunt, or had been ratified by her.