                    IN THE COURT OF APPEALS OF TENNESSEE
                                AT NASHVILLE
                                        On Briefs May 24, 2001

        CITIZEN'S TRI-COUNTY BANK v. FRANK HARTMAN, ET AL.

                A Direct Appeal from the Chancery Court for Sequatchie County
                   No. 1788   The Honorable Jeffrey F. Stewart, Chancellor


                        No. M2000-03087-COA-R3-CV - Filed July 11, 2001


        After a dispute arose between the widow and executor of husband’s estate concerning
ownership of two bank accounts, the bank filed a declaratory judgment action to determine
ownership. The trial court determined that the checking account was owned by the widow, and the
savings account was part of the decedent’s estate. Both parties appealed. We reverse in part and
affirm in part, declaring that both accounts are part of the husband’s estate.


 Tenn.R.App.P. 3; Appeal as of Right; Judgment of the Chancery Court Reversed in Part,
                            Affirmed in Part and Remanded

W. FRANK CRAWFORD , P.J., W.S., delivered the opinion of the court, in which ALAN E. HIGHERS,
J. and DAVID R. FARMER , J., joined.

Lynne D. Swafford, Pikeville, For Appellants, Ina R. Hartman and Mary Francis Hixson

Stephen T. Greer, Russell Anne Swafford, Dunlap, For Appellee, Frank Hartman, Executor of the
Estate of J. E. Hartman

M. Keith Davis, Dunlap, For Appellee, Citizens Tri-County Bank

                                                   OPINION

       On June 14, 1999, Citizens Tri-County Bank ( “Tri-County”) filed a Complaint For
Declaratory Judgment in the Chancery Court of Sequatchie County against Ina Ruth Hartman, her
daughter Mary Frances Hixson and Frank Hartman, as executor of the estate of J.E. Hartman. The
complaint avers that the bank has an account that was originally in the name of Mr. and/or Mrs. J.
E. Hartman.1 The complaint states that J. E. Hartman died December 13, 1997, survived by his
widow Ina R. Hartman and leaving a will appointing Frank Hartman executor of his estate. The


        1
          The account referred to is a savings acco unt, and the co mplaint was su bsequen tly amended to include a
checking ac count.
complaint in essence alleges that there is a dispute between the executor and the widow concerning
the ownership of the account, and before plaintiff became aware of the dispute, the widow had
changed the name of the account to her name with the right of survivorship in her daughter,
defendant Hixson. The complaint seeks a declaration as to the ownership of the account and the
subsequently added account. Before trial, the parties filed a stipulation of facts which states:

               1.      J. E. Hartman (Decedent) died on December 13, 1997, and left
               a Will which was duly probated in this Court, which Will appointed
               Frank Hartman as Executor of the      Decedent’s estate. At the date
               of the death of the Decedent, he was survived by his spouse, Ina R.
               Hartman, a defendant herein, as well as other beneficiaries named in
               the Will. The Decedent had no children.

               2.     At the date of death of the Decedent, there existed two bank
                accounts at Citizens Tri-County Bank in Dunlap, Tennessee, one
               being savings account number 12110369 which had a balance of
               $39,419.17 as of December 31, 1997 and the other being checking
               account number 2000008 which had a balance of $5,071.61 as of
               December 31, 1997. Both of these two accounts were listed in the
               name of “Mr. or Mrs. J. E. Hartman.”

               3.       The checking account was originally opened on October 2,
                1972, in the name of “Mr. or Mrs. J. E. Hartman” and the signature
               card contained the signatures of “Mr. J. E. Hartman” and “Mrs. J. E.
               Hartman.” The social security number on this account when it was
               first opened was [Redacted]. The only other change in the signature
               card on this account prior to the date of death of the Decedent was an
               updated signature card that was prepared on July 31, 1981, which
               continues to show the account in the name of “Mr. or Mrs. J. E.
               Hartman” but was signed only by J. E. Hartman.

               4.      The savings account described above was originally opened
                on April 11, 1977, in the names of “Mr. or Mrs. J. E. Hartman” but
               contained only the signature of J. E. Hartman. That original card had
               as the social security number [Redacted].         That number was
               subsequently marked through, and a new number, [Redacted] , was
               inserted on the card, but the date of the change in the number is
               unknown. The only change in the signature card on the savings
               account prior to the date of the Decedent was on June 22, 1982, when
               a new signature card was prepared and signed, which continued to
               remain in the names of “Mr. or Mrs. J. E. Hartman” but was signed
               only by J. E. Hartman.



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5. The Decedent was first married to Mildred Hartman for many
years, but she died on November 18, 1981. The Decedent later
married one of the defendants in this case, Ina Ruth Hartman, in May
of 1983, and he remained married to her until his death on December
13, 1997. The social security number of the Decedent is [Redacted]
, while the social security number of the Decedent’s first wife,
Mildred Hartman, is [Redacted]. The social security number of the
Defendant, Ina Ruth Hartman, is [Redacted].

6.       From the time of the marriage of the Decedent to his last
 wife, Ina Ruth Hartman, in May of 1983 up to the date of death of
the Decedent, Ina Ruth Hartman made no deposits of money into
either the checking account or savings account of the Decedent above
described. Prior to Decedent’s death Ina Ruth Hartman signed no
signature cards on either of these accounts.

7.      An examination of bank records at Citizens Tri-County
 Bank by the bookkeeping department of that bank on both of these
accounts had revealed no checks or other documents bearing the
handwriting and/or signature of Ina Ruth Harman. However, Ina
Ruth Hartman maintains and states that she wrote and signed one or
two checks in small amounts on the above described checking
account shortly after her marriage to the Decedent in 1983. The
estate cannot admit or deny this assertion, since all of the canceled
checks in that account have not been made available and may not be
able to be made available.

8. Other than the testimony of Ina Ruth Hartman that she wrote and
signed two checks for small amounts on the above described checking
account shortly after her marriage to the Decedent, Ina Ruth Hartman
had no further activity on either one of these accounts.

9.      After the date of death of the Decedent on December 13,
 1997,the Executor, Frank Hartman, withdrew $10,000.00 from the
above described savings account which he then deposited into the
estate account for the purpose of paying estate expenses. The
Defendant, Ina Ruth Hartman, also wrote and signed two small
checks on the above described checking account after the date of
death of the Decedent.

10.    As of December 31, 1999, the savings account
 #12110369 balance was $31,150.00 while the balance in the
checking account #2000008 was $4,907.60.


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                11.    The savings account no.12110369 had a balance of One
                Thousand Three Hundred Three Dollars and three cents ($1,303.03)
                as of March 29, 1985 which is the earliest statement provided by the
                bookkeeping department of Citizens Tri County Bank.

                12.    All funds in the checking account no. 2000008 were
                deposited by the decedent during his marriage to Ina Ruth Hartman.

                13.     All bank statements and checks, including checks recorded
                 by Mr. Hartman, from May 1983 through December 1997 indicate
                the accounts (checking and savings) were in the name of “Mr. or Mrs.
                J. E. Hartman.”

        Basically, the material facts are included in the stipulation, and the only live witness at trial
was Ina Ruth Hartman. She testified that the funds deposited in both the savings and the checking
accounts were derived from Mr. Hartman’s barber shop, the farm and his social security. Mrs.
Hartman stated that she was aware that Mr. Hartman owned some CDs solely in his name that had
been funded with money that he acquired before they were married in part from the sale of a small
farm. Mrs. Hartman testified that after her marriage to Mr. Hartman, she maintained a checking
account and a savings account in her own name. Mrs. Hartman claims to have written two checks
out of checking account number 2000008 in the early years of her marriage to Mr. Hartman, however
she never made any deposits into that account, nor did she make any deposits into savings account
number 12110369, and did not make any withdrawals from that account.

        At the conclusion of the trial, the trial court recited findings from the bench. Regarding the
checking account, the trial court found that the account was opened in 1972 in the name of Mr. or
Mrs. J.E. Hartman, and at that time “Mrs. Hartman” referred to Mr. Hartman’s first wife, Mildred
Hartman. Both Mr. and Mrs. Hartman signed the signature cards. A new signature card was signed
by Mr. Hartman only prior to the death of Mildred Hartman, but the name on the account remained
the same. After Mildred Hartman’s death, Mr. Hartman continued to operate the checking account
and so continued using the account after his marriage to wife, Ina Hartman. He used the account for
the benefit of himself and for his second wife, Ina Hartman, paying the family bills from that
account. The trial court further found that the signature cards on the checking account executed
originally, and when it was updated during the life of Mildred Hartman, referred to the account as
being joint with right of survivorship, indicating an intention that there be a right of survivorship.
Upon finding an intent that the checking account be held jointly with a right of survivorship, the trial
court determined that proceeds from the checking account passed to Mrs. Ina Hartman at Mr.
Hartman’s death.

        With regard to the savings account, the trial court found that the proof was not identical to
the proof on the checking account. The trial court found that the savings account was not used to
pay bills and to take care of the family, but rather, was a separate account. Mr. Hartman deposited
money into the savings account during his marriage to Ina Hartman, however at no time did the bank


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provide a card indicating that there was ever a right of survivorship on the savings account. The
trial court found that there was no clear intent given in writing or verbally to create a right of
survivorship in the savings account.

       The trial court’s decree, entered April 28, 2000, incorporated the trial court’s findings and
provided in pertinent part:

               IT IS, THEREFORE, ORDERED, ADJUDGED AND DECREED as
               follows:

               1. That the checking account, being account number 2000008 at
               Citizens Tri-County Bank in the name of Mr. or Mrs. J. E. Hartman
               with a balance of $5, 071.61 as of December 31, 1997, was an
               account held as tenants of the entirety by the decedent and the
               Defendant, Ina Ruth Hartman, and therefore, all proceeds in that
               account are the sole and separate property of the Defendant, Ina Ruth
               Hartman;

               2. That the savings account, begin account number 12110369 at
               Citizens Tri-County Bank in the name of Mr. or Mrs. J. E. Hartman
               was an account owned solely by the Decedent, J. E. Hartman, at the
               date of his death, which account had a balance of $39,419.17 as of
               December 31, 1997, and therefore, all funds in that account are the
               sole and separate property of the Estate of J. E. Hartman;

               3. That in addition to the disposition of the principal balances
               described above, the Estate of J. E. Hartman is entitled to all interest
               accrued on the savings account from the date of death of J. E.
               Hartman on December 13, 1997, up until the funds are paid to the
               Estate, less any previous withdrawals made by the Estate, and the
               Defendant, Ina Ruth Hartman, is entitled to any interest that has
               accrued on the checking account from the date of death of the
               decedent up until the funds are paid to her, less any funds used or
               expended by her out of said account;

               4. That the Plaintiff, Citizens Tri-County Bank, be and it is hereby
               authorized to disburse the remaining funds in these accounts in
               accordance with the terms of this decree;

               5. That the costs of this cause be and the same is hereby taxed to the
               Estate of J. E. Hartman.




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        Mrs. Hartman appeals and presents one issue for review as stated in her brief: “Whether the
evidence in this case establishes a Tenancy by the Entireties with the Right of Survivorship for the
second Mrs. J.E. Hartman in the disputed savings account when the account was owned in the name
of ‘Mr. or Mrs. J.E. Hartman’ at the death of Mr. J.E. Hartman.” Frank Hartman, executor of the
estate of J.E. Hartman, presents a second issue, as stated in his brief: “Whether the trial court erred
in holding that it was the intention of the Testator, Mr. J.E. Hartman, deceased, that his checking
account established during his first marriage should pass under tenancy by the entireties to his second
wife, the present Mrs. Hartman, at the time of his death.”

        Since this case was tried by the trial court sitting without a jury, we review the case de novo
upon the record with a presumption of correctness of the findings of fact by the trial court. Unless
the evidence preponderates against the findings, we must affirm, absent error of law. T.R.A.P. 13(d).

         Mrs. Hartman contends that both the checking account and the savings account were owned
by J. E. Hartman and herself as tenants by the entireties with the right of survivorship, as evidenced
by the name on both accounts: “Mr. or Mrs. J. E. Hartman.” She asserts that during her fourteen year
marriage to Mr. Hartman, he made deposits in both accounts in the name of Mr. or Mrs. J.E.
Hartman and received bank statements on both accounts showing that they were in the name of “Mr.
or Mrs. J.E. Hartman.” Mrs. Hartman contends that it is inconceivable that a man of Mr. Hartman’s
intelligence would not have known that the language “Mrs. J.E. Hartman” would include her in the
ownership of the accounts, inferring that he would have changed the name on the accounts had his
intent been other than her joint ownership in them.

       Frank Hartman, as executor of the estate of J. E. Hartman, asserts that both the checking
account and the savings account passed to the estate at the death of J.E. Hartman. The executor
contends that after the death of Mildred Hartman, Mr. Hartman simply left his accounts in the same
name, however did not intend to create a survivorship interest for any future Mrs. Hartman. The
executor further asserts that neither the 1977 nor the 1982 signature cards for the savings account
have any designation showing the account to be joint with a right of survivorship, although both
cards have a specific location to designate the account as such.

      In determining the proprietary interests in certificates of deposit and a joint bank account our
Supreme Court in Grahl v. Davis, 971 S.W. 2d 373 (Tenn. 1998) stated:

               [W]e begin with the well-settled proposition that tenancy by the
               entirety is a form of property ownership which is unique to married
               persons. Griffin v. Prince, 632 S.W.2d 532, 534 (Tenn.1982). The
               essential characteristic of a tenancy by the entirety is that "each
               spouse is seized of the whole or the entirety and not of a share,
               moiety, or divisible part." Sloan v. Jones, 192 Tenn. 400, 241 S.W.2d
               506, 507 (1951). Upon the death of one spouse, ownership of
               tenancy by the entirety property immediately vests in the survivor,
               and the laws of descent and distribution do not apply. Id. 241 S.W.2d


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               at 509. It is well-settled in this state that personal property as well as
               realty may be owned by spouses by the entirety. Griffin, 632 S.W.2d
               at 535. It has also been expressly held that a tenancy by the entirety
               with the right of survivorship may exist in certificates of deposit and
               bank accounts.        White v. Watson, 571 S.W.2d 493, 495
               (Tenn.App.1978); Smith v. Haire, 133 Tenn. 343, 181 S.W. 161
               (1915) (certificates of deposit); Sloan, supra, and Griffin, supra,
               (bank accounts). In fact, there is clear authority in this state that a
               bank account or negotiable instrument in the name of "husband or
               wife" will be deemed to create a tenancy by the entirety with right of
               survivorship, in the absence of proof to the contrary.

Griffin, 632 S.W.2d at 536. In a tenancy by the entirety, each party owns the whole, and on the
death of either party, the survivor takes no new title or estate as the survivor is in possession of the
whole from its inception. Hull v. Johnson, No. W1999-02011-COA-R3-CV, 1999 WL 1336086
at * 4 (Tenn. Ct. App. Dec. 15, 1999) (citing Catt v. Catt, 866 S.W.2d 570 (Tenn. Ct. App. 1993)
and Moore v. Cole, 200 Tenn. 43, 289 S.W.2d 695 (1956)). Furthermore, the law presumes that
when a husband and wife create a joint bank account, they have created a tenancy by the entireties
with the right of survivorship. Grahl v. Davis, 971 S.W.2d at 378; Edwards v. Edward, 713 S.W.2d
642, 647 (Tenn. 1986); Griffin v. Prince, 632 S.W.2d at 536-37; and Sloan v. Jones, 241 S.W.2d
at 508-09.

         Tennessee courts have long held in will construction cases to determine intent of the testator,
a will must be considered in reference to the circumstances which existed at the time of its execution.
Nashville Trust Co. v. Grimes, 179 Tenn. 567, 167 S.W.2d 994, 996, (Tenn. 1943). Likewise, intent
in the form of ownership of a bank account, circumstances existing at the time of its establishment,
shall control. Our Supreme Court indicated as much in Lowry v. Lowry, 541 S.W.2d 128 (Tenn.
1976), stating:

                         Absent clear and convincing evidence of contrary intent
                expressed at the time of its execution, we hold that a bank signature
                card containing an agreement in clear and unambiguous language that
                a joint account with rights of survivorship is intended, creates a joint
                tenancy enforceable according to its terms; and upon the death of one
                of the joint tenants, the proceeds pass to the survivor.

Id. at 132.

        In Lambert v. S & L Plumbing, 935 S.W. 2d 411 (Tenn. Ct. App. 1996) the Middle Section
of this Court, in holding that the widow of the sole stockholder in an incorporated plumbing
company did not own the company as a surviving tenant by the entirety given the absence of
evidence that the widow and her husband intended to hold the shares jointly, stated:



                                                  -7-
               Creation of an estate by the entireties is a question of intent; it may be
               inferred from the circumstances, “but should rest upon convincing
               evidence and never upon conjecture.” Oliphant v. McAmis, 197
               Tenn. 367 at 373, 273 S.W.2d 151 at 154 (1954).

Id. at 412.

         In the case at bar, it is undisputed that both accounts were opened in the name of “Mr. or Mrs.
J. E. Hartman,” that the Mrs. J. E. Hartman referred to Mr. Hartman’s then wife, Mildred Hartman.
It is undisputed that subsequent to Mildred Hartman’s death, Mr. Hartman continued to operate both
accounts with the same account name and later, when he married the present Mrs. Hartman, he
continued to use the accounts as he had after the death of his first wife. It really makes no difference
whether the accounts as originally established created tenancies by the entirety, because if Mr.
Hartman had not become the sole owner of the accounts upon the death of his wife, Mildred
Hartman, he certainly had owned the accounts from their establishment. It is without controversy
that at the time Mr. Hartman married Mrs. Ina Hartman, he was the sole owner of the accounts.
There is no evidence in the record to indicate that subsequent to his marriage to Mrs. Ina Hartman
he evidenced any intent to create any right of survivorship in the accounts. The fact that he
continued using the accounts as he had before he married the second time does not establish any
intent that the accounts were to be considered jointly held.

         Accordingly, the decree of the trial court declaring Mrs. Ina Hartman the owner of the
checking account is reversed, and the decree declaring the estate owner of the savings account is
affirmed. Both accounts are declared to be a part of J. E. Hartman’s estate. The case is remanded
to the trial court for such further proceedings as may be necessary. Costs of the appeal are assessed
against the appellant, Mrs. Ina Hartman, and her surety.

                                               __________________________________________
                                               W. FRANK CRAWFORD, PRESIDING JUDGE, W.S.




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