                                                                                                                           Opinions of the United
1994 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


12-5-1994

IRS v. Gaster
Precedential or Non-Precedential:

Docket 94-7195




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                    UNITED STATES COURT OF APPEALS
                        FOR THE THIRD CIRCUIT

                    ______________________________

                       NOS. 94-7195 and 94-7196
                    ______________________________



                       INTERNAL REVENUE SERVICE

                                  v.

               DONALD GASTER and MARY ANN GASTER

                                  v.

                    NINTH WARD SAVINGS BANK, FSB*

                        Third-party Defendant

    Mary Ann Gaster**, Appellant in Nos. 94-7195 and 94-7196

          * (Amended as per the Clerk's 6/8/94 Order)

          ** (Amended as per the Clerk's 9/9/94 Order)

       __________________________________________________

        On Appeal from the United States District Court
                  for the District of Delaware
                       (D.C. 91-cv-00062)
      ___________________________________________________

                      Argued September 19, 1994

          Before:    BECKER and COWEN, Circuit Judges and
                     POLLAK, District Judge.***


                       (Filed December 5, 1994)



_________________

***. Honorable Louis H. Pollak, United States District Judge for
the Eastern District of Pennsylvania, sitting by designation.
                                      LORETTA C. ARGETT
                                      Assistant   Attorney
General

           GREGORY M. SLEET
                                      United                States
Attorney
                              GARY R. ALLEN
                                      WILLIAM S. ESTABROOK
                                      ALICE     L.    RONK
(Argued)
                                      Tax Division
                                      Department               of
Justice
                                      Post Office Box 502
                                      Washington,       DC
20044

                              Attorneys for IRS


                                      PETER     A.        MARDINLY
(Argued)
                                      Paul,           Mardinly,
Durham, James,
                                         Flandreau               &
Rodger
                                      320       West        Front
Street, Box D
                                      Media, PA       19063

                                              Attorney        for
Appellants
                              Donald & Mary Ann Gaster


                                      WILLIAM        J.     MARSDEN,
JR.(Argued)
                                      Potter,         Anderson       &
Corroon
                                      P.O. Box 951
                                      350   Delaware           Trust
Building
                                      Wilmington, DE         19899

                                              Attorney           for
Appellee
                                              Ninth              Ward
Savings Bank, FSB
                      ________________________

                        OPINION OF THE COURT
                      ________________________

BECKER, Circuit Judge.


          This appeal from a judgment of the District Court for the

District of Delaware primarily presents the question whether the

Internal Revenue Service ("IRS") had the right to levy pursuant to

26 U.S.C. § 6321 on a bank account at the Ninth Ward Savings Bank

("the Bank") in Wilmington, Delaware, owned jointly by appellants

Donald Gaster and his wife Mary Ann Gaster, along with their son

Bryan Gaster.   The IRS levied against the account in order to

enforce a judgment for a tax deficiency obtained against Donald

Gaster in his individual capacity.   Donald Gaster died during the

pendency of this appeal, and his estate has challenged the

propriety of the IRS levy.   Alleging that the property which was

levied upon was held by her and Donald Gaster (the "Gasters") as

tenants by the entireties, Mary Ann Gaster claimed an interest in

property seized for another's taxes under 26 U.S.C. § 7426.

(Bryan Gaster has waived all interest in the bank account and is

not a party.)

          It is unquestioned that the IRS can properly levy on the

account if Donald Gaster, the delinquent taxpayer, had the

unilateral right to withdraw money from the joint bank account

under Delaware law.   The district court determined, following a

bench trial, that Donald Gaster had a unilateral right to withdraw

funds from the account and hence the IRS could properly levy on the
account.   We conclude, however, that the district court erred and

that pursuant to the Gasters' contract with the Bank and applicable

Delaware law, both the signature of Donald and Mary Ann Gaster were

required in order to withdraw funds from the account.   We therefore

hold the IRS levy to be improper and reverse the judgment of the

district court with the direction to dissolve the levy.


                                 I.

           On June 25, 1985, the Gasters opened an account at the

Bank to deposit the proceeds from the sale of an apartment building

in Secane, Pennsylvania, which they had held as tenants by the

entireties.   When they opened the account, the Gasters transferred

a portion of it to their son, titling in the alternative the

account's original signature card and six-month certificate of

deposit ("CD") -- "Donald Gaster or Mary Ann Gaster or Bryan

Gaster."   It is undisputed that the titling of a signature card in

the alternative allows for unilateral withdrawal from the account

by each owner.   The district court found that the Gasters titled

the signature card in the alternative -- which permitted access to

the account with one signature -- because Donald Gaster would be

unavailable due to the pendency of serious surgery.

           On the following day, June 26, 1985, the Supreme Court

decided United States v. National Bank of Commerce, 472 U.S. 713,

105 S. Ct. 2919 (1985), holding that the determination whether a

delinquent taxpayer has an interest in a joint bank account subject

to a federal tax lien turns on whether the delinquent has a

unilateral right under the applicable state law to withdraw funds
from the account.   Shortly after the publication of the National

Bank of Commerce opinion, the Gasters became aware of its holding

and resolved to protect their jointly-held property from an IRS

levy that could arise from an IRS judgment obtained against Donald

Gaster on May 12, 1977.    To effectuate this intent, Donald Gaster

went to the Bank in December 1985, and retitled the signature card

to read "Donald Gaster and Mary Ann Gaster or Bryan Gaster," so

that more than one signature would be required in order for Donald

Gaster to withdraw funds from the jointly owned account.    Over the

next five years (until and including the time of the IRS levy on

August 24, 1990) all correspondence from the Bank with regard to

the account referred to the account in this conjunctive form.

          From the time the account had been established, the Bank

sent a savings transfer form to the Gasters every six-months to

authorize the roll-over of the proceeds from an expiring CD for the

purchase of a new CD.     Even after the change in the signature card,

Mary Gaster would return the form, with her signature alone, on

behalf of both herself and her husband.    With the return of each

transfer form, the account's title remained conjunctive.    No

withdrawals of any kind have ever been made from the account.

          On August 24, 1990, the IRS levied on the account

pursuant to 26 U.S.C. § 6321 to enforce the 1977 tax deficiency

judgment against Donald Gaster.    In response to this levy, the Bank

filed a complaint in interpleader against the Gasters and the IRS

in the Delaware Superior Court.    The IRS removed the interpleader

action to the District Court for the District of Delaware, 28

U.S.C. § 1444, invoking jurisdiction pursuant to 28 U.S.C. §§ 1340
and 1345 and also 26 U.S.C. §§ 7402 and 7403.   As we have noted,

the district court held that the IRS could levy on the account,

deciding that Donald Gaster had a unilateral right to withdraw the

funds.    The court concluded in a memorandum opinion that Donald

Gaster's subsequent modification of the account signature card was

ineffective, given that Donald Gaster alone formally executed the

change.    This appeal followed.

            While we review the district court's findings of fact

under a clearly erroneous standard, Sheet Metal Workers Int'l Ass'n

Local 19 v. 2300 Group, Inc., 949 F.2d 1274, 1278 (3d Cir. 1991),

the court's conclusion that Donald Gaster had an unrestricted

unilateral right to withdraw the funds under Delaware law is a

legal question over which we exercise plenary review.    Borse v.

Piece Goods Shop, Inc., 963 F.2d 611, 613 (3d Cir. 1992); High v.

Balun, 943 F.2d 323, 325 (3d Cir. 1991).


                                   II.

                                   A.


            Section 6321 of the Code, 26 U.S.C. § 6321, provides:

"[i]f any person liable to pay any tax neglects or refuses to pay

the same after demand, the amount . . . shall be a lien in favor of

the United States upon all property and rights to property, whether

real or personal, belonging to such person."

            In National Bank of Commerce, the Supreme Court addressed

the question of when a delinquent taxpayer's interest in a joint

bank account constitutes "property" or "rights to property"
pursuant to § 6321.   The Court concluded that a delinquent taxpayer

has such an interest in property on which the IRS may levy when

"under state law, a taxpayer has the unrestricted right to withdraw

funds from the account."   National Bank of Commerce, 472 U.S. at

725-726, 105 S.Ct. at 2927.   Whether the delinquent has such a

right to the funds is governed by state law, since "state law

controls in determining the nature of the legal interest which the

taxpayer had in the property."   Id. at 722, 105 S.Ct. at 2925

(internal quotation omitted) ("This follows from the fact that the

federal statute creates no property rights but merely attaches

consequences, federally defined, to rights created under state

law." (internal quotation omitted)).   Thus, in deciding whether the

IRS may properly levy on the jointly-owned account at the Bank, we

must determine whether the tax delinquent, Donald Gaster, had an

unrestricted right to the funds in the account under Delaware law.

          Pursuant to National Bank of Commerce, before considering

Mary Ann Gaster's cross-claim for the return of her ownership

interest in the proceeds of the bank account under 26 U.S.C. §

7426, we are required to determine the propriety of the IRS levy.1

National Bank of Commerce, 472 U.S. at 728, 105 S.Ct. at 2928 ("[A]


    1    The district court found that Mary Ann Gaster's § 7426
claim to one-half of the funds, in the alternative, as a tenant
in common (as opposed to as a tenant by the entireties) was time
barred in that the claim was not made within nine months of the
date of the levy as required by 26 U.S.C. § 6532(c). On appeal,
looking to the pre-trial conduct and communication, the IRS has
conceded that Mary Ann Gaster did in fact assert her § 7426 claim
within nine months of the levy. Given that we find the IRS levy
was improper, we never reach the validity of Mary Ann Gaster's §
7426 claim to one-half of the account as a tenant in common.
levy action settles no rights in the property subject to seizure."

(internal quotation omitted)).      If the IRS levy is determined to be

proper, "one claiming an interest in property seized for another's

taxes may bring a civil action [under § 7426] against the United

States to have the property or the proceeds of its sale returned."

Id.       Alternatively, § 6343(b) provides an administrative proceeding

to allow a claimant a remedy for the return of seized property.

Treas. Reg. § 301.6343-1(b)(2), 26 C.F.R. § 301.6343-1(b)(2)

(1984).      It is only under these post-seizure proceedings that the

ownership form of the property becomes relevant.

              In sum, as the Court made clear in National Bank of

Commerce, the propriety of the IRS levy turns only on right to

withdraw, not the ownership form of the bank account.      The

ownership form determines only the claimant's share of the seized

property under her post-seizure claim.      National Bank of Commerce,

472 U.S. at 728 n.11, 105 S.Ct. at 2928 n.11.      Thus, whether or not

Donald and Mary Ann Gaster owned their share of the account as

tenants by the entireties is relevant only if we first determine

that the IRS levy was proper.

              Before proceeding to that determination, it is important

to note that in National Bank of Commerce the Supreme Court
acknowledged that if money is held by a husband and wife in a joint

bank account as tenants by the entireties2 under applicable state
      2
       A tenancy by the entireties "is created between a husband
and wife and by which together they hold title to the whole with
right of survivorship so that, upon death of either, [the] other
takes [the] whole. . . . Neither party can alienate or encumber
the property without the consent of the other."      Black's Law
Dictionary 1022 (6th ed. 1990).
law "the Government could not use the money in the account to

satisfy the tax obligations of one spouse," notwithstanding the

propriety of the levy.    National Bank of Commerce, 472 U.S. at 729

n.11, 105 S.Ct. at 2928 n.11 (citing Raffaele v. Granger, 196 F.2d

620, 622 (1952), which recognizes that if an account is held as

tenants by the entireties under Pennsylvania law the IRS's "attempt

to deal separately with or dispose of the interest of one is in

derogation of the other spouse's ownership of the entire property

and, therefore, legally ineffective").    Similarly under Delaware

law, the IRS would not be entitled to the money in the account if

the Gasters owned the account as tenants by the entireties since

both Donald and Mary Ann Gaster would be "seized, not merely of

equal interests, but of the whole estate during their lives and the

interest of neither of them can be sold, attached or liened except

by the joint act of both husband and wife."    Steigler v. Insurance

Co. of North America, 384 A.2d 398, 400 (Del. 1978) (citation

omitted).

            Consequently, if a tenancy by the entireties existed,

Mary Ann Gaster could successfully recover the entire amount in the

account pursuant to her § 7426 (property claim) action.    However,

while it appears that the Gasters owned their share of the account3


    3
       The question of the ownership form of Donald and Mary Ann
Gaster's share of the account is not affected by the fact that
the account was owned along with their son Bryan.             "In
jurisdictions where tenancies by the entirety have not been
abolished, a tenancy by the entirety may be created [between]
three or more persons, two of whom are husband and wife--e.g., by
a transfer to H (husband) and W (wife), and X, in which case H
and W take an undivided one-half interest as tenants by the
entirety, and X takes a one-half undivided interest as tenant in
from its establishment in June of 1985 as tenants by the entireties

under Delaware law,4 as we have stated, we need not address this

issue if we first determine that the IRS levy was improper.


common vis-a-vis H and W." Robert A. Cunningham et al., The Law
of Property 204 (2d ed. 1993).
    4
       The district court made a factual finding that, when the
account was initially established, the Gasters desired that only
one signature be required to access the account because of Donald
Gaster's poor health. From that fact, the court concluded that
the account was established as a tenancy in common. In light of
its finding that the change in signature card was legally
ineffective, see discussion infra, the court also held that the
account remained a tenancy in common even after Donald Gaster
changed the signature card to the conjunctive.     While we need
not, given our holding, address the question of the ownership
form of the account, it does appear that under Delaware law
Donald and Mary Ann Gaster's share of the account was initially
established as a tenancy by the entireties. That is because in
addition to the presumption, recognized by the district court, in
favor of a tenancy by the entireties when a joint bank account is
opened by a husband and wife in the conjunctive form, Widder v.
Leeds, 317 A.2d 32, 34 (Del. Ch. 1974), a more general
presumption exists in favor of a tenancy by the entireties under
Delaware law. Property held by husband and wife in "Delaware and
the majority of other jurisdictions as well" is "presumptively
held by the entireties." See William M. Young v. Tri-Mar Asso.
Co., 362 A.2d 214, 215 (Del. Super. Ct. 1976). The fact that the
Gasters originally established the account in the alternative to
allow for unilateral withdrawal would not negate a finding that
the account was held as tenants by the entireties.          Under
Delaware law a joint bank account, though in such form as to
permit either husband or wife to draw, is a tenancy by the
entireties, in the absence of evidence to the contrary. Hoyle v.
Hoyle, 66 A.2d 130, 132 (Del Ch. 1949); see also In re Griffith,
93 A.2d 920, 922 (Del. Ch. 1953). In addition, Delaware courts
have discounted the significance of bank signature cards in
determining the presence of a tenancy by the entireties. See In
re McCall, 398 A.2d 1210, 1215 (Del Ch. 1978) ("The purpose of
such a card being not for the purpose of establishing ownership
but only to guard against a payment to an unauthorized person.").
     Moreover, the district court acknowledged that the funds in
the account at Ninth Ward Bank originated from the sale of the
Secane apartment building, owned by the Gasters as tenants by the
entireties. In Delaware proceeds of property held by a husband
and wife as tenants by the entireties will continue to be held as
                                  B.

          The propriety of the IRS levy depends on whether Donald

Gaster possessed a unilateral right of withdrawal as determined "by

his contract with the bank, as well as by the relevant [Delaware]

statutory provisions."    National Bank of Commerce, 472 U.S. at 723,
105 S.Ct. at 2926.   If Donald Gaster had a unilateral right to

withdraw funds from the account, the IRS levy was proper; if he did

not have such a right, the IRS levy was improper.   It is not

disputed that when the joint account at the Bank was initially

established, Donald Gaster had a unilateral right to withdraw funds

from the account, given the original alternative form of the

account signature card.   The issue, however, is the ability of

Donald Gaster to unilaterally withdraw funds at the time of the IRS

levy, after his change in the signature card, the efficacy of

which, as we explain infra, is clear.5

tenants by the entireties absent clear evidence of a contrary
intent. Moser v. Moser, 287 A.2d 398, 399 (Del. 1972); Widder,
317 A.2d at 35 ("[D]irect derivatives of entireties property
prima facie remain entireties property, even if taken in the name
of one spouse alone."); Tri-Mar, 362 A.2d at 216.      Given this
strong presumption, it appears Mr. and Mrs. Gaster would continue
to hold their share of the account as tenants by the entireties.
    5
       The district court concluded that Donald Gaster changed
the signature card at the bank in light of the Court's opinion in
National Bank of Commerce in order to avoid a possible IRS levy
to collect an existing deficiency judgment. Notwithstanding this
factual finding, the district court did not consider and the IRS
has not argued that Donald Gaster's change in the signature card,
in order to deny the IRS the ability to levy on the account,
constituted   a   fraudulent  conveyance   under  Delaware   law.
Arguably, such action could be viewed as a fraudulent conveyance
under 6 Del. C. §§ 1304, 1307, in that Mr. Gaster altered the
signature card in order to avoid collection on an existing IRS
judgment.   While the case at bar presents a slightly different
question, Delaware case law has found a fraudulent conveyance
          The record provides uncontested testimony that Bank

policy would have required the signature of both Donald and Mary

Ann Gaster (or, alternatively, the single signature of Bryan

Gaster) in order to make a withdrawal from the account, given the

conjunctive signature card.   The fact that Bryan Gaster could have

unilaterally withdrawn the funds is not relevant to our analysis

since under National Bank of Commerce we must determine whether the

delinquent taxpayer had a right, acting alone, to withdraw funds

from the account.   National Bank of Commerce, 472 U.S. at 728, 105

S.Ct. at 2928.

          The Bank has stated that it would have honored a

withdrawal from this particular savings account by issuing a check

payable as the account was titled -- "Donald Gaster and Mary Ann

Gaster or Bryan Gaster."   If such a check were issued, Delaware law

would require the signature of both Donald and Mary Ann Gaster (or

when a spouse alters the ownership form of property to a tenancy
by the entireties in order to avoid a judgment creditor.
Harrington v. Hollingsworth, 1994 Del. Ch. LEXIS 101 (July 6,
1994); Givens v. Givens, 1986 WL 2270 (Del. Super. 1986).
     We cannot decide whether Donald Gaster's conduct establishes
a fraudulent conveyance under Delaware law, however, since the
IRS's failure to raise the issue either in the district court or
on appeal constitutes a waiver. See Brenner v. Local 514, United
Brotherhood of Carpenters, 927 F.2d 1283, 1298 (3d Cir. 1991)
("It is well established that failure to raise an issue in the
district court constitutes a waiver of the argument.");
International Raw Materials v. Stauffer Chem. Co., 978 F.2d 1318,
1327 n.11 (3d Cir. 1992) ("We have repeatedly emphasized that
failure to raise a theory as an issue on appeal constitutes a
waiver because consideration of that theory would vitiate the
requirement of the Federal Rules of Appellate Procedure and our
own local rules that, absent extraordinary circumstances, briefs
must contain statements of all issues presented for appeal,
together with supporting arguments and citations." (internal
quotation omitted)), cert. denied, 113 S. Ct. 1588 (1993).
the sole signature of Bryan Gaster) in order to negotiate the

check.   Delaware has enacted the relevant portion of Article 3 of

the Uniform Commercial Code which requires the signature of each

payee when a check is issued in the conjunctive

form.

            An instrument payable to the order of two or
            more persons: . . . (b) if not in the
            alternative is payable to all of them and may
            be negotiated, discharged or enforced only by
            all of them.


6 Del. C. § 3-116(b) (emphasis added).    Therefore, as a matter of

Delaware law, both the signatures of Donald and Mary Ann Gaster

were required to withdraw funds from the savings account.     Given

that his wife's signature was also required, the delinquent

taxpayer, Donald Gaster, did not have the ability to withdraw funds

unilaterally from the account; correspondingly, the IRS levy was

improper.


                                  C.

            Notwithstanding the fact that representatives of the Bank

testified that they would require the signatures of both Donald and

Mary Ann Gaster to actually make a withdrawal from the account, the

district court refused to recognize the legal effect of the change

in the signature card since Mary Ann Gaster never executed a

document evidencing her assent to the change.     We disagree with the

significance the district court placed on the failure of Mary Ann

Gaster to formally demonstrate her consent.
           We may conclude that Donald Gaster had the actual

authority to act as an agent of his wife in this particular

instance if he was acting consistent with a manifestation of

consent by Mary Ann Gaster.   An agency relationship "'results from

the manifestation of consent by one person to another that the

other shall act on his behalf . . . .'"   Cox v. Deon, 1994 Del.

Super. LEXIS 357, at *9 (July 29, 1994) (adopting the definition of
Restatement (Second) of Agency § 1); see also Concors Supply Co. v.

Giesecke, Int'l, Ltd., 1990 Del. Super. LEXIS 87, at *5 (March 5,

1990).   Consent sufficient to establish an agency relationship

exists not only where there is prior authorization, but also where

a principal ratifies acts done on her behalf after the fact.

McCabe v. Williams, 45 A.2d 503, 505 (Del. 1944); Hirzel Funeral

Homes, Inc. v. Equitable Trust Co., 83 A.2d 700, 701 (Del. Super.
Ct. 1951); Restatement (Second) of Agency § 100 & cmt. a ("The

affirmance of the act of an unauthorized person by the purported

principal, all conditions for ratification being fulfilled,

normally has the same effect as if such person had been originally

authorized.").   Thus, the change in the signature card is legally

binding if Mary Ann Gaster was aware of, and ratified, the change

done, in part, on her behalf.

           At trial, Mary Ann Gaster testified that even though she

failed to explicitly authorize Donald Gaster's actions before the

fact, she manifested a general consent to his acting on her behalf.
          Q: Mrs. Gaster, when did you become aware that
          the accounts at Ninth Ward Savings Bank and
          Loan had been changed from Donald or Mary Ann
          Gaster to Donald and Mary Ann Gaster?
          A: I guess after Donald did it. Being married
          to a man for 40 years, I trust anything he
          does, I agree with.

          Q:   He did not consult you before he did this?

          A:   I don't feel he would have to -- I mean,
          what's his is mine, and what's mine is his.


In addition to her acknowledging her ratification of his actions at

trial Mary Ann Gaster was aware of and failed to object to the

change that her husband made in the signature card for a period of

more than five years after the change in the card and before the

time of the levy.   She signed on multiple occasions the saving

transfer forms which reinvested the funds in an account where title

was consistent with the change in the signature card -- "Donald and

Mary Ann Gaster or Bryan Gaster."   Given these uncontested facts,

including those that demonstrate Mary Ann Gaster's retroactive

consent to the change in the signature card, we conclude that as a

matter of Delaware law Mary Ann Gaster ratified the change.     See
Restatement (Second) of Agency § 83 (1958) (allowing a principal to

ratify an agent's unauthorized prior act if he knows about it and
fails to take affirmative steps to disavow the act).

          In sum, we conclude that the change in the card was

legally effective, since when Donald Gaster executed the change in

the signature card he was acting as the agent of his wife under

Delaware law as to her share of the account.   Buttressing this

conclusion is the fact that Delaware law, in general, considers a
husband and wife as agents of the other when dealing with a joint

account.    See Hoyle v. Hoyle, 66 A.2d 130, 132 (Del. Ch. 1949).6
    6
       In Hoyle, the Delaware Chancery Court was presented with
the question whether a husband and wife could own a joint bank
account as tenants by the entireties notwithstanding the fact
that both spouses had the unilateral right to withdraw funds from
the account. The court determined that a tenancy by the entirety
could exist even with the unilateral right of withdrawal, since
each spouse can be viewed as acting as the agent of the other
with regard to a joint account.

        It should be noted that while the bank accounts
             here were in the names of the husband and
             wife, the money could be withdrawn by either
             the husband or the wife. The fact that the
             money could be withdrawn by either spouse has
             been held in Pennsylvania not to defeat a
             finding of an estate by the entirety in such
             money because in such a situation each spouse
             is considered to be the agent of the other.
             This is deemed to satisfy the so-called
             "control" unity requirement of such an
             estate.   See Madden v. Gosztonyi Savings &
             Trust Co., 331 Pa. 476, 200 A. 624, 117
             A.L.R. 904 [(1938)]; Berhalter v. Berhalter,
             315 Pa. 225, 173 A. 172, 173 [(1934)]. I
             accept and adopt the reasoning and conclusion
             of the Pennsylvania Supreme Court in this
             respect.

Hoyle, 66 A.2d at 132 (emphasis added).      Subsequent Delaware
cases have limited the finding of an agency relationship in the
event that one spouse becomes incapacitated, In re Griffith, 93
A.2d at 922-23 ("The present case is distinguished from the Hoyle
case in that . . . the other tenant by the entireties, had been
adjudicated an insane person . . . . The fact that the husband's
mental or physical condition was such that he was incapable of
transacting business would not constitute the wife as general
agent or vest her with a general or unlimited authority as to all
his affairs."); Barrows v. Bowen, 1994 Del. Ch. LEXIS 63, at *7
("This disinclination to assume agency or natural guardianship is
designed to encourage formal judicial guardianship adjudications
which protect the interests of possibly impaired person.").
However, the Hoyle court's finding of an agency relationship, as
between competent spouses in dealing with a joint bank account,
has gone uncontested.
                                 D.

          In addition to concluding that the change in the

signature card was ineffective, the district court also appeared to

rely for its determination that Donald Gaster had unilateral access

to the account on the fact that Mary Ann Gaster at times

unilaterally executed saving transfers on the account.     Because

only Mary Ann Gaster signed the saving transfer forms, the

government contends that Donald Gaster really had a unilateral

right to withdraw funds from the account, the Gasters' interests in

the account being identical.   We disagree.   A savings transfer is
not a withdrawal, since no money leaves the bank.    See Black's Law
Dictionary 1104 (6th ed. 1990) (defining withdrawal as the "removal

of money or securities from a bank or other place of deposit"

(emphasis added)).   The ability to remove funds from the bank is

clearly the touchstone under National Bank of Commerce.    See

National Bank of Commerce, 472 U.S. at 723, 105 S. Ct. at 2926

(focusing on whether the delinquent "had the unqualified right to

withdraw the full amounts on deposit in the joint accounts without

notice to his co-depositors" (emphasis added)).     At trial, Bank

officials clarified this distinction, stating that while the

conjunctive signature card required the signature of both Donald

and Mary Ann Gaster in order for either to have made a withdrawal,

two signatures were not required to make a savings transfer, since

the signature card only governed withdrawals.7

    7
        As the Restatement (Second) of Contracts § 223 makes
clear, course of dealing plays a role in contract interpretation.
                               III.

          In sum, we conclude that pursuant to the Gasters'

contract with the Bank and applicable Delaware law, both the

signature of Donald and Mary Ann Gaster were required in order to

withdraw funds from the account.   Accordingly, we hold the IRS levy

to be improper and will therefore reverse the judgment of the

district court with the direction to dissolve the levy.   In

addition, we will vacate as moot the judgment in favor of the IRS

as to Mary Ann Gaster's § 7426 cross-claim, and will affirm the

district court's judgment as to the Gasters' claim against Ninth

Ward Savings Bank.8

Correspondingly, a different case might be presented if,
notwithstanding the conjunctive signature card and stated bank
policy, the Gasters had a practice of making unilateral
withdrawals which were honored by the Bank. If such a scenario
were presented, we would need to examine whether the parties'
course of dealing overrode the apparent requirement, as embodied
in the conjunctive signature card, for the signature of both
Donald and Mary Ann Gaster in order for either to make a
withdrawal. On the present record, however, no such analysis is
required since unilateral savings transfers do not constitute a
course of dealing inconsistent with the requirement that both
Donald and Mary Ann Gaster authorize a withdrawal from the
account.
    8
       The Gasters filed a counterclaim against the Bank alleging
that if Donald Gaster had unilateral access to the account, the
Bank was negligent and/or in breach of contract in complying with
the Gasters' instructions in retitling the signature card. The
Gasters reason that, if the district court correctly concluded
that the unilateral change in the signature card was ineffective,
then the Bank neglected a duty to inform them of the appropriate
manner in which to properly alter the card. The district court
summarily rejected this claim.     The Gasters have appealed the
district court's judgment in favor of the Bank.         Given our
determination   that  Donald   Gaster  effectively   changed the
signature card so as to avoid the proper imposition of an IRS
levy -- hence we need not address the Gasters' claim against the
Bank, and we will affirm the district court's judgment in favor
of the Bank.
