This section of the book is from the "Canadian Banking Practice" book, by John T. P. Knight.
Question 358.— (1) In the event of a deposit being made to the credit of two parties, father and son, payable to both or either, would the government be entitled to succession duty on the death of the party who made the deposit?
(2) In such a case would the son be entitled to hold the money against other heirs?
(3) In the event of the death of the party who made the deposit could the bank be sued by the other heirs should it pay the amount to the survivor ?
(4) If one of two parties who have a joint deposit with the bank, payable to both or either, dies, and under his will bequeaths a portion of the deposit to a third party, can the bank legally pay the survivor (a) if it has no knowledge of the will; (b) if it has knowledge of the will?
(5) It is the practice of some banks not to pay to the survivor in these cases without the production of a probate of the will or letters of administration, and then to require the consent of the legal representatives of the deceased depositor. Is it not a pity that the practice is not uniform ?
Answer.— (1) The right of the government in the matter seems to be settled by the Act of 1893, chap. 5, sec. 4 (d), the substance of which is that if the deceased person had been absolutely entitled to the amount of the money so deposited, the succession duty must be paid. The sub-section quoted mentions a beneficial interest passing by survivorship and it is clear that this legislation does not affect the relations between the bank and the survivor.
(2) We think he could, but there might be circumstances connected with the matter which would affect his title.
(3) The executor or administrator might, of course, sue, but as the survivor has a right to draw the money the bank would be technically protected in paying it to him. If a suit were brought it would be prudent for the bank to pay the money into Court.
(4) The will of the deceased joint depositor would not affect the bank's position one way or the other. The most that could be said is that the legatee might have a claim on the money in the hands of the survivor.
(5) We think that most banks recognize the right of the survivor of two joint depositors to control the deposit, which right exists whether the deposit is by its terms payable to either of them or to both, but there will no doubt always be some who will take the extra precaution which you mention, but which in the absence of anything like fraud we believe to be unnecessary.
You speak of the person "making the deposit" as if there were some distinction between the joint depositors; but we think that when money is paid in to the credit of two parties it must be regarded (so far as the bank is concerned) as deposited by and the property of both, and the person who pays in the money as the agent of both.