Monday, January 6, 2014

Hutchinson National Bank v. Brown case brief

Hutchinson National Bank v. Brown case brief summary
753 P.2d 1299 (1988)

Appellant bank sought review of a judgment of the Reno County District Court (Kansas), which granted a declaratory judgment to appellee wife on the issue of whether a unilateral pledge of certificate of deposit (CD), as security for a loan, held in joint tenancy with her husband, severed the joint tenancy when the husband pledged it prior to his death.

The husband pledged the CD as security for a loan for his grandson without his wife's knowledge. After the husband died, the grandson filed a petition for bankruptcy. The bank filed suit, asking that the CD be applied to the grandson'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.


  • 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.

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