Hutchinson Nat'l Bank & Tr. Co. v. Brown - 12 Kan. App. 2d 673, 753 P.2d 1299 (1988)

Rule:

The creation and continued existence of a joint tenancy requires the coexistence of four unities: time, title, interest, and possession.

Facts:

Harry Brown purchased a $15,000 certificate of deposit (CD) at the Hutchinson National Bank. It was issued in the names of Harry and his wife, as joint tenants. When Harry Brown’s grandson, Dale Brown, applied for a loan, Harry agreed to pledge the CD as security. Harry pledged the CD without his wife’s knowledge. When Harry died, the Bank paid the interest on the CD to the wife. Subsequently, Dale filed a petition for bankruptcy. The bank filed suit, asking that the CD be applied to Dale’s loan. The district court denied the request, concluding that the pledge did not sever the joint tenancy, that the wife was not estopped to contest the pledge, and that the CD had passed to her free and clear of the lien. The bank sought review of the decision. 

Issue:

Did the unilateral pledge of the certificate of deposit, held in joint tenancy, sever any of the four unities required for the continued existence of a joint tenancy? 

Answer:

Yes.

Conclusion:

On appeal, the court held that a joint tenancy could be terminated (1) by mutual agreement of parties; (2) by conduct sufficient to indicate that all parties had mutually treated their interests as belonging to them in common; or (3) by operation of law upon destruction of any one or more of necessary unities. The record indicated that the parties did not mutually agree to terminate joint tenancy or to engage in conduct that would indicate that they both treated their interest in the CD as belonging to them in common. The court found, however, that the pledge had destroyed one of the four unities and had acted as a severance of the joint tenancy because there was no legal distinction in the operative effect of a mortgage or pledge. The court reversed the district court’s judgment and remanded the case.