A.G. Edwards & Sons, Inc. v. Beyer, 235 S.W.3d 704 (Tex. 2007).
Father and Daughter established a joint account with rights of
survivorship. For tax reasons, the account was converted into a single
party account in Father’s name. Later, Father told Broker over the
telephone that he wanted Daughter’s name added back to the account.
Broker prepared documents reflecting the change and delivered them to
Daughter who then gave them to Father who signed them. Daughter left the
documents with Broker’s receptionist. Later, Broker could not locate the
new joint account agreement despite a diligent search. Before father
could sign a replacement agreement, he lapsed into a coma and died. A
dispute arose over whether the balance of the funds in the account, over
$1 million, belonged to Daughter or passed to Father’s six children by
intestacy. Daughter settled the dispute with her siblings by agreeing to
share the account equally with them.
Daughter then sued Brokerage Firm for the difference between the balance
in the account and the one-sixth share she received. The jury determined
that Brokerage Firm was liable under six theories. Daughter elected to
recover under contract. Brokerage Firm appealed, the intermediate
appellate court affirmed, and Brokerage firm appealed again.
The Texas Supreme Court affirmed. Brokerage Firm argued that the trial
court improperly admitted extrinsic evidence of Father’s intent for the
account to have the survivorship feature. The court recognized that
Texas courts consistently hold that in the absence of a written
agreement described in Probate Code § 439(a), extrinsic evidence is
inadmissible to prove rights of survivorship against the depositor’s
estate. See Stauffer v. Henderson, 801 S.W.2d 858 (Tex. 1990). However,
Daughter was not seeking a recovery from Father’s estate or against a
party to the joint account. Instead, she was attempting to recover from
Brokerage Firm for losing the survivorship agreement thereby breaching
its contract with Daughter and Father to create a joint account with
rights of survivorship.
Moral: Although the survivorship feature of a joint account may not be
established by extrinsic evidence to claim the funds in the account
itself, such evidence may be used to show the depositor’s intent in an
action against the financial institution.