Mary K. STAUFFER, Petitioner, v. J.D. HENDERSON, Respondent, 801 S.W.2d 858

OPINION HECHT, Justice. We consider here whether funds in a joint account belong to the survivor of the account parties. The trial court held as a matter of law that the survivor is not entitled to the funds. The court of appeals affirmed. 746 S.W.2d 533. We affirm the judgment of the court of appeals. I Marian K. Henderson opened a joint bank account with her sister, Mary K. Stauffer. All funds deposited to the account belonged to Marian.

The only written agreement between Marian and Mary pertaining to the joint account was contained on the signature card provided by the depository and signed by both Marian and Mary. That agreement stated in pertinent part: JOINT ACCOUNT — PAYABLE TO EITHER OR SURVIVOR ...

We agree and declare that all funds now or hereafter deposited in this account are and shall be our joint property, that either of us shall have power to act in all matters relating to such account, whether the other be living or dead, and that upon the death of either of us any balance in said account or any part thereof may be withdrawn by, or upon the order of the survivor.

It is especially agreed that withdrawal of funds by the survivor shall be binding upon us and upon our heirs, next of kin, legatees, assigns and personal representatives.... [The depository] is hereby authorized to act without further inquiry in accordance with writings bearing any [signature of Marian or Mary], and any such payment or delivery or a receipt or acquittance signed by [Marian or Mary] shall be a valid and sufficient release and discharge of [the depository]. When Marian died, Mary withdrew the funds. Marian’s husband, J.D.

Henderson, the independent executor of her estate, then sued Mary to recover the funds, claiming that they were his and Marian’s community property and that consequently half belonged to him individually and half belonged to Marian’s estate. Mary answered, contending that she was entitled to the funds by right of survivorship created by her agreement with Marian contained in the signature card quoted above. J.D. and Mary both moved for partial

summary judgment based entirely upon the language of the signature card. The trial court granted J.D.’s motion, holding that Mary was not entitled to the funds. The trial court severed this judgment from the remaining issues in the case. II A Jus accrescendi, the right of survivor-ship, was the “grand incident” of a joint estate held, in the ancient language of the common law, “per my et per tout”. 2 W. BLACKSTONE, COMMENTARIES *183; C.

Moyni-HAN, INTRODUCTION TO THE LAW OF REAL Property 210-211 (2d ed. 1988); Niles & Walsh, Concurrent Estates and Their Characteristics, in 2 American Law of Property 3-11, 16-18 (J. Casner ed. 1952); J. Schouler, Treatise on the Law of Personal Property § 156, at 224-226 (5th ed. 1918); J. Williams, Principles of the Law of Personal Property 518-522 (1926). The right of survivorship as an essential legal incident of joint ownership has not been favored in this country, however, and consequently has been abolished in most American jurisdictions.

See Moynihan, supra, at 211; Niles & Walsh, supra, at 11-15; 20 Am.Jur.2d Cotenancy and Joint Ownership § 11 (1965); 48A C.J.S. Joint Tenancy § 5 (1981).

The Second Legislature of Texas did so in 1848 by the following statute: When two or more persons hold an estate, real, personal or mixed jointly, and one joint tenant dies before severance, his interest in said joint estate shall not survive to the remaining joint tenant or joint tenants, but shall descend to and be vested in the heirs or legal representa- ' tives of such deceased joint tenant, in the same manner as if his interest had been severed and ascertained. Law of March 18, 1848, ch. 103, § 12, 1848 Tex.Gen.Laws 129, Í32, 3 H. Gammel, Laws of Texas 129, 132 (1898).

Elimination of the right of survivorship as a necessary, legally imposed element of joint estates does not prohibit joint owners from agreeing that each will take the other’s interest in the property at the other’s death. Although the 1848 statute quoted above does not expressly allow joint owners to agree to a right of survivorship, it also does not prevent them “from providing among themselves that the property in question should pass to and vest in the survivor as at common law.” Chandler v. Kountze, 130 S.W.2d 327, 329 (Tex.Civ.App.—Galveston 1939, writ ref’d); see Adams v.

Jones, 258 S.W.2d 401 (Tex.Civ.App.—Austin 1953, no writ); Shroff v. Deaton, 220 S.W.2d 489 (Tex.Civ.App.—Texarkana 1949, no writ). The power of joint owners to agree to a right of survivor-ship, implicit in the 1848 statute, was made explicit when that statute was moved to

section 46 of the new Probate Code adopted in 1955, and amended to provide as follows: Where two or more persons hold an estate, real, personal, or mixed, jointly, and one joint owner dies before severance, his interest in said joint estate shall not survive to the remaining joint owner or joint owners, but shall descend to, and be vested in, the heirs or legal representatives of such deceased joint owner in the same manner as if his interest had been severed and ascertained.

Provided, however, that by agreement in writing of joint owners of property, the interest of any joint owner who dies may be made to survive to the surviving joint owner or joint owners, but no such agreement shall be inferred from the mere fact that the property is held in joint ownership. Law of Sept. 1, 1956, ch. 55, § 46, 1955 Tex.Gen.Laws 88, 103. Although the language of

section 46 has been amended several times since it was adopted in 1955, its essential provisions have continued in effect to the present. B There has been little doubt before or after the adoption of

section 46 that the parties to a joint account at a bank or other depository may, absent fraud or other illegal purpose, make a valid and enforceable written agreement that funds deposited by either of them will belong to the survivor. See Davis v. East Texas Sav. & Loan Ass’n, 163 Tex. 361, 354 S.W.2d 926, 929-931 (1962); Johnson v. Johnson, 306 S.W.2d 780, 781-783 (Tex.Civ.App.—Amarillo 1957, writ ref’d); Brown v. Lane, 383 S.W.2d 649, 650-651 (Tex.Civ.App.—Dallas 1964, writ ref'd). There has been considerable confusion, however, over the effect of particular agreements.

This confusion is due in part to the very different reasons parties have for opening joint accounts. It is not at all unusual for a person to deposit his or her funds into an account upon which another person is authorized to draw merely for the convenience of the depositor. The owner of the money intends only to facilitate disbursement of the funds for his or her own purposes, not to transfer title to the co-sig-nator on the account.

It is no less common for a depositor of funds into a joint account to intend that at some point in time, at the depositor’s death if not before, those funds will become the property of the co-signator. Thus, both common experience, as well as the express language of

section 46, prohibit an inference from the mere creation of a joint account that the parties intend for ownership of the funds to pass automatically upon the death of one of them. Frequently, the only written agreement of the parties which might reflect their intent is the signature card or similar form provided by the depository and signed when the account is opened. The principal purpose of such forms, however, is to authorize the depository to pay funds in the account upon the direction of any party, not to establish ownership of the funds as between the parties upon the death of one of them. See Reed v.

Reed, 283 S.W.2d 311, 316 (Tex.Civ.App.—Dallas 1955, no writ). A joint account agreement which authorizes funds to be paid to or withdrawn by one party allows the party to insist that the depository honor a request for payment but does not establish the right of that party to the funds against other claimants. Thus, the account agreement provided by the depository and signed by the parties ordinarily authorizes delivery of the funds to any party to a joint account but may or may not settle the issue of actual ownership of the funds.

Construction of joint account agreements has been further complicated by uncertainty over the proper legal theory to be used to determine a survivor’s right to account funds. A written agreement under

section 46 has not been viewed as the exclusive means of transferring ownership of funds to surviving parties on joint accounts. In analyzing the right to funds in a joint account, courts have considered the surviving party as a donee, see, e.g., Ottjes v. Littlejohn, 285 S.W.2d 243, 245-246 (Tex.Civ.App.—Waco 1955, writ ref’d n.r.e.); Adams v. Jones, 258 S.W.2d at 403; as a third party beneficiary of the contract between the decedent and the depository, see, e.g., Quitter v. Wendland, 403 S.W.2d 335, 336-338 (Tex.1966); and as a trust beneficiary, see, e.g., Adams, 258 S.W.2d at 403.

In considering whether a right of survivor-ship may be created apart from the written agreement of joint owners, the courts have, not surprisingly, looked beyond any account agreement to parol evidence of the parties’ intent. Thus, in Krueger v. Williams, 163 Tex. 545, 359 S.W.2d 48 (1962), the Court did not consider the language of the joint account receipt card provided by the’ bank and signed by the decedent to be dispositive of the survivor’s right to the funds.

The card stated only that the funds were “payable to the survivor of either” party and did not evince a clear intention to vest ownership of the funds, as opposed to mere possession, in the survivor. Nevertheless, the Court held that the survivor’s right of control over the funds before the decedent’s death and her right to possession of the funds afterward created a presumption that the decedent intended her to have the funds at his death, and that the burden of proof was on the adverse claimant to demonstrate a contrary intent. Krueger did not apply

section 46 because there was no written agreement signed by both the decedent and the survivor. By holding that contract language which did not create a right of survivorship might nevertheless give rise to a rebuttable presumption that one was intended, Krueger authorized consideration of evidence extrinsic to an agreement pertaining to the joint account, at least in instances when the agreement used the word “survivor”. See Quilter, 403 S.W.2d at 337-338. Absent some written reference to “survivor”, the Court held in Forehand v.

Light, 452 S.W.2d 709 (Tex.1970), that no presumption was invoked and suggested that a right of survivorship could not be established, even by extrinsic evidence of intent. If, on the other hand, a right of survivorship was clearly created by the language of a joint account signature card signed by both parties, the Court held in Dulak v. Dulak, 513 S.W.2d 205 (Tex.1974), that the right could nevertheless be defeated by parol evidence of contrary intent.

The courts of appeals after Krueger did not always draw these rather close distinctions, uniformly acknowledging simply that extrinsic evidence was admissible in every case on the issue of intent to create a right of survivorship. See William Marsh Rice University v. Birdwell, 624 S.W.2d 661 (Tex.App.—Houston [14th Dist.] 1981, no writ); Kennedy v. Beasley, 606 S.W.2d 1 (Tex.Civ.App.—Houston [1st Dist.] 1980, writ ref’d n.r.e.); Alexander v. Bowens, 595 S.W.2d 176 (Tex.Civ.App.—Tyler 1980, no writ); Griffin v. Robertson, 592 S.W.2d 31 (Tex.Civ.App.—Texarkana 1979); Cooper v.

Durham, 565 S.W.2d 308 (Tex.Civ.App.—Eastland 1978, writ ref’d n.r.e.); Worden v. Thornburg, 564 S.W.2d 480 (Tex.Civ.App.—Corpus Christi 1978, writ ref’d n.r.e.); Henry v. Powers, 447 S.W.2d 738 (Tex.Civ.App.—Houston [1st Dist.] 1969, no writ); Estate of Reynolds v. Reynolds, 443 S.W.2d 601 (Tex.Civ.App.—Dallas 1969, writ ref’d n.r.e.); Wallrath v. Calvert, 442 S.W.2d 884 (Tex.Civ.App.—Austin 1969), modified and affirmed, 457 S.W.2d 376 (Tex.1970); Turner v. Merchants & Planters Nat’l Bank, 392 S.W.2d 889 (Tex.Civ.App.—Texarkana 1965, no writ); Groos Nat’l Bank v.

Norris, 384 S.W.2d 401 (Tex.Civ.App.—Eastland 1964, no writ). The results in these cases are difficult to reconcile and appear to have been heavily affected by the particular circumstances of each. C In 1979, the Legislature added to the Probate Code

chapter XI entitled “Nontestamentary Transfers”. Included in this

chapter is

section 439, entitled “Right of Survivorship”.

Section 439(a), which applies to joint accounts, states in part: Sums remaining on deposit at the death of a party to a joint account belong to the surviving party or parties against the estate of the decedent if, by written agreement signed by the party who dies, the interest of such deceased party is made to survive to the surviving party or parties. A survivorship agreement will not be inferred from the mere fact that the account is a joint account. Law of Aug. 27, 1979, ch. 713, § 31, 1979 Tex.Gen.Laws 1740, 1758. Besides applying

section 46 specifically to joint accounts,

section 439 is significant in two respects. First,

section 439 provides the exclusive means for creating a right of survivorship in joint accounts. In addition to simple joint accounts treated in

section 439(a), it applies to P.O.D. (payable on death) accounts (section 439(b)) and trust accounts (section 439(c)).

Section 439(

d) states: “In other cases, the death of any party to a multiple-party account has no effect on beneficial ownership of the account other than to transfer the rights of the decedent as part of his estate.”

Section 441 adds: “Transfers resulting from the application of

Section 439 of this code are effective by reason of the account contracts involved and this statute and are not to be considered as testamentary or subject to the testamentary provisions of this code.” We conclude that the Legislature has replaced the various legal theories which have been used to determine the existence of a right of survivorship in a joint account with

section 439. Second, the necessity of a written agreement signed by the decedent to create a right of survivorship in a joint account is emphatic.

Section 439, like the other provisions of

chapter XI adopted in 1979, is derived from

article VI,

part 1 of the Uniform Probate Code. The uniform provision which corresponds to the two sentences of

section 439(

a) quoted above is the following single sentence: Sums remaining on deposit at the death of a party to a joint account belong to the surviving party or parties against the estate of the decedent unless there is clear and convincing evidence of a different intention at the time the account is created. Unif.PROB.Code § 6-104(a), 8 U.L.A. 562 (1983) (emphasis added.) “Clear and convincing evidence” is a standard used consistently in' the provisions of

article VI,

part 1 of the Uniform Probate Code. See Unif.Prob.Code §§ 6-103(a), 6-103(c), 6-104(a), 6-104(c), 8 U.L.A. 520-‘533. In adopting these provisions into the Probate Code, the Legislature used this same standard in each, except for

section 439(a). See Tex.Prob.Code Ann. §§ 438(a), 438(c), 439(c) (Vernon 1980). For proving a right of sur-vivorship in a joint account, however, the Legislature has determined that clear and convincing evidence is not enough, and that a written agreement signed by the decedent is required. These conclusions are consistent with the 1987 amendments to

section 439(a), which added the following sentence: Notwithstanding any other law, an agreement is sufficient to confer an absolute right of survivorship on parties to a joint account under this subsection if the agreement states in substantially the following form: “On the death of one party to a joint account, all sums in the account on the date of the death vest in and belong to the surviving party as his or her separate property and estate.” Not only has the Legislature made a written agreement both necessary and sufficient for a right of survivorship in a joint account, it has undertaken to specify language that will meet its requirements. D

Section 439(

a) makes a written agreement determinative of the existence of a right of survivorship in a joint account. If such agreement is complete and unambiguous, then parol evidence is inadmissible, as with written agreements generally, to vary, add to or contradict its terms. See Hubacek v. Ennis State Bank, 159 Tex. 166, 317 S.W.2d 30, 32 (1958). Furthermore, no presumption can be created to contradict the agreement or to supply a term wholly missing from its provisions. Any such presumption would violate both the parol evidence rule by necessitating admission of extrinsic evidence to rebut the presumption, and the express prohibition of

section 439(

a) against inferring a right of survivorship from the mere creation of a joint account. Thus, if the terms of an agreement pertaining to a joint account are clear, the parties may not introduce extrinsic evidence of the parties’ intent.

Section 439(

a) effectively overrules prior case law to the contrary. The courts of appeals which have considered

section 439(

a) have generally agreed that extrinsic evidence of the intent of parties to a joint account is inadmissible to show a right of survivorship. In Sheffield v. Estate of Dozier, 643 S.W.2d 197 (Tex.App.—El Paso 1982, writ ref d n.r.e.), the court held that parol evidence was inadmissible to defeat a right of survivorship clearly created by the account card signed by the parties. Observing that prior to

section 439(a) “the courts of this State had consistently held that parol evidence was admissible to determine the intention of the depositor in setting up a joint survivorship account, even though such evidence contradicted the express terms of the joint account agreement”, the court concluded that “[tjhere can be no question that the legislature intended to change the Texas rule when it enacted the new

chapter on ‘Nontestamentary Transfers.’ ” Id. at 198. Similarly, in Magee v. Westmoreland, 693 S.W.2d 612 (Tex.App.—San Antonio 1985, writ ref’d n.r.e.), the court held that a certificate of deposit which was “payable to survivor” was insufficient to create a right of survivorship. Absent any other agreement signed by the depositor, the court concluded that the survivor was not entitled to the funds. Referring to

section 439, the court stated: The unequivocal phraseology of the language in the Code and the requirements of an agreement in writing by joint owners of an account including a certificate of deposit prevent a court from scrutinizing the circumstances surrounding the establishment of such multiple-party accounts and declaring the existence of a contract for the benefit of the third party or the intent of the decedent.

In the absence of the mandated agreement in writing, the interest of a joint owner who dies before severance shall not survive to the remaining joint owner but shall descend to and is vested in his heirs or legal representatives. Id. at 616. Again, in Chopin v. InterFirst Bank Dallas, 694 S.W.2d 79 (Tex.App.—Dallas 1985, writ ref’d n.r.e.), the court held that absent an agreement creating a right of survivorship, none could be established by extrinsic evidence. After noting the enactment of

chapter XI of the Probate Code, the court stated: The Code provisions were adopted for the purpose, among others, of removing the confusion and uncertainty created by the then prevailing case law which had consistently held that parol evidence was admissible to determine the intent of the depositor in setting up a joint account. ... ... The intent of the decedent must ... be determined from the agreement, and extrinsic evidence may not be offered to prove intent.... Finally, by the terms of the agreement the account must be “made to survive” to the remaining party. Id. at 84.

Citing Chopin, the court in Dickerson v. Brooks, 727 S.W.2d 652 (Tex.App.—Houston [1st Dist.] 1987, writ ref’d n.r.e.), upheld a right of survivorship created by the plain language of the account agreement, stating: In order for an account to comply with the requirements of

section 439(a), there must be a written agreement signed by the decedent, and the agreement must provide that upon the death of any party, the interest of the deceased survives to the other party.... Language to the effect that ‘the account is held as joint tenants with rights of survivorship’ is sufficient to create a valid survivorship agreement. Id. at 653. See also McCarty v. First State Bank & Trust Co., 723 S.W.2d 792 (Tex.App.—Texarkana), rev’d on other grounds, 730 S.W.2d 656 (Tex.1987) (per curiam); Isbell v.

Williams, 705 S.W.2d 252 (Tex.App.—Texarkana 1986, writ ref’d n.r.e.), appeal after remand, 738 S.W.2d 20 (Tex.App — Texarkana 1987, writ ref d n.r. e.); Otto v. Element, 656 S.W.2d 678 (Tex.App.—Amarillo 1983, writ ref’d n.r.e.). In Sawyer v. Lancaster, 719 S.W.2d 346 (Tex.App.—Houston [1st Dist.] 1986, writ ref’d n.r.e.), the court considered an account signature card which authorized payment to the surviving party but did not create a right of survivorship.

The court observed: “Since the enactment of 439(a), every Texas case has held that evidence of the deceased person’s intent is not admissible to alter a survivorship agreement.” Id. at 349. However, the court held, relying on Krueger, that

section 439(

a) did not prohibit a rebuttable presumption that the depositor intended to create a right of sur-vivorship even though the language of the signature card did not express that intent. In this regard, Sawyer conflicts with the result in Chopin. As we have noted above, a presumption regarding a joint account party’s intent to create a right of survivor-ship is inconsistent with the necessity of a written agreement required by

section 439(a). We therefore disapprove Sawyer to the extent it is inconsistent with this opinion. We agree with the courts of appeals which have held that

section 439(

a) allows neither extrinsic evidence nor a rebuttable presumption to create a right of survivor-ship which is not established by a written agreement signed by the deceased joint account party. Ill The account which Marian Henderson opened with Mary Stauffer is a joint account. The only written agreement pertaining to that account is the signature card, which is quoted above. That card authorizes payment of funds to the surviv- or at the other party’s death but does not create a right of survivorship. We therefore hold under

section 439(

a) of the Probate Code that no right of survivorship in the account exists. Both courts below correctly held as a matter of law that Mary was not entitled to the funds in the account. The judgment of the court of appeals is accordingly affirmed. . Those issues are whether the money deposited by Marian was separate or community property, whether Mary is liable for conversion of the funds, and whether Mary is liable for attorney fees. . Now

section 46(

a) of the Texas Probate Code, the provision states: If two or more persons hold an interest in property jointly, and one owner dies before severance, the interest of the decedent in the joint estate shall not survive to the remaining joint owner or owners but shall pass by will or intestacy from the decedent as if the decedent’s interest had been severed. The joint owners may agree in writing, however, that the interest of any joint owner who dies shall survive to the surviving joint owner or owners, but no such agreement shall be inferred from the mere fact that the property is held in joint ownership. .

Depositories obtain such agreements from joint account parties out of what appears to be an abundance of caution, as payment to or on order of a joint account party is protected by statute. See Tex.Rev.Civ.Stat.Ann. art. 342-706 (Vernon 1973) (banks); Tex.Rev.Civ.Stat.Ann. art. 852a, § 6.08 (Vernon Supp.1990) (savings and loan associations); Tex.Prob.Code Ann. §§ 445, 448 (Vernon 1980, Supp.1990). . Subsequent opinions suggest that our holding in Williams was limited to the facts of that case. Forehand v.

Light, 452 S.W.2d 709, 710 (Tex. 1970) ("The word 'survivor' was vital to our decision in Krueger.")-, Quilter v. Wendland, 403 S.W.2d 335, 339 (Tex. 1966) (Smith, J., dissenting) (“The result in the Krueger case was reached because of its particular facts.”). .

Of course, in addition to this legislatively drafted "safe harbor,” banks may also ask in plain language, on their applications, signature cards, or other documentation for joint accounts, whether or not their customers intend ownership of the funds remaining in the account on the death of one joint account holder to go to the surviving joint account holders. .The account agreement in McCarty did not create a right of survivorship.

The surviving party attempted to establish his right to the funds by offering an affidavit of two witnesses averring that the deceased depositor intended the survivor to have the funds at her death. Somewhat peculiarly, the depositor had signed the affidavit before her death but did not swear to the statement made by the witnesses. The court correctly held that "[t]he mere intention of a depositor as to use or ownership of the funds upon his death cannot be considered in determining the disposition of those funds.” 723 S.W.2d at 794.

The court incorrectly added, however: "Only the language of the contract with the bank may be considered." Id. Any agreement signed by the depositor may be considered under

section 439(a). The devisees under the decedent's will sued the bank to recover the funds it paid to the survivor on the account. The bank claimed against the survivor for indemnity. The trial court held that the survivor was entitled to the funds and therefore rendered judgment for the bank. The court of appeals reversed, holding that the devisees were entitled to the funds, but did not remand the case for further proceedings on the banks claim of indemnity. This Court reversed the court of appeals’ judgment and remanded the bank's claim to the trial court.

On the survivor's application for writ error challenging the appeals court’s holding as to ownership of funds, however, this Court denied the application with the notation, no reversible error. . Otto involved three separate accounts: a savings account, a checking account and a certificate of deposit. The court correctly held that the savings account agreement expressly created a right of survivorship. The checking account was "designated” a joint survivorship account by the depositor, but the account agreement itself only permitted payment to the survivor and did not clearly create a right of survivorship.

It is therefore unclear from the facts recited in Otto whether its holding that there was a right of survivorship in the checking account was correct. There was no agreement signed by the depositor as to the certificate of deposit, and the court appears to have held that parol evidence was admissible to determine whether the certificate of deposit was a trust account of which the surviving party listed on the certificate was the beneficiary. See Tex.Prob.Code Ann. § 439(c) (Vernon 1980). .

It is interesting to note that the same court of appeals which decided Sawyer also decided Dickerson, and the author of the opinion in the latter case joined in the opinion in Sawyer. However, the court in Dickerson relies upon Chopin, the opinion of another court of appeals which Sawyer criticizes, and does not cite its own prior opinion in Sawyer.