dissenting:
I disagree with the majority opinion which holds that a separate signature card signed by all parties is not necessary for creation of a valid joint tenancy for a time certificate of deposit. I would affirm the judgment of the appellate court.
The majority opinion determines that the aforesaid instrument may be classified as an evidence of indebtedness under section 2(b) of the Joint Rights and Obligations Act, which does not require a separately signed agreement to create a joint tenancy. I find this reasoning unconvincing. In McCormick v. Hopkins, 287 Ill. 66, 71, it was recognized that the issuance of the certificate of deposit arises from a deposit transaction. Joint passbook and checking accounts have been described as deposit accounts. (Doubler v. Doubler, 412 Ill. 597, 601; In re Estate of Wilson, 404 Ill. 207, 216.) As the court recognized in People v. McGraw Electric Co., 375 Ill. 241, 250, “Bank deposits *** create the relationship of debtor and creditor.” Thus the mere fact that the certificate in this case may be characterized as an evidence of indebtedness is not controlling, for in Doubler and Wilson it was held that a separate signed agreement was necessary to create a joint tenancy.
The majority opinion seeks to buttress its position by quoting at length from Frey v. Wubbena, 26 Ill.2d 62, in an attempt to equate a time certificate of deposit to shares of corporate stock and a promissory note with emphasis on the latter’s negotiable characteristic. Such comparison would seem inappropriate, for in Frey certain time certificates of deposit were considered by the court and disposition made of them without a specific attempt to compare them to stock shares or promissory notes. Moreover the majority, while relying on McCormick v. Hopkins, 287 Ill. 66, seemingly ignores incisive language contained therein at pages 71 and 72. “While the certificate of deposit is a promissory note and is negotiable, nevertheless the transaction out of which it arises is a deposit and not a loan. *** The word ‘deposit’, according to its commonly accepted and generally understood meaning among bankers and by the public, includes not only deposits payable on demand and subject to check, but deposits not subject to check, for which certificates, whether interest-bearing or not, may be issued, payable on demand or on certain notice or at a fixed future time.” This language in part may be said to describe an instrument which could be negotiable, yet McCormick recognizes nonetheless that the instrument originates from a deposit. Negotiability is therefore not the determinative characteristic.
The majority opinion says that a certificate of deposit has the characteristics of a corporate share of stock as noted in Frey v. Wubbena. It concludes that this similarity differentiates a time certificate of deposit from a regular withdrawable bank account. From its discussion the majority malees clear that the crucial comparison attendant to a share of stock and a time certificate of deposit is the lack of a “fluctuating res.” The majority attempt to equate these investment devices on this general basis is illusory in light of present-day financial practices which permit withdrawal of funds from time certificate accounts.
It is recognized that financial institutions are subject to various Federal regulations pertaining to their operation. On its face the present instrument purports to prohibit withdrawal of the funds until the maturity date, thereby lending support to the majority’s position that the amount of funds in a time certificate account remains stable. Present Federal banking regulations, however, permit withdrawal of funds represented by time certificates of deposit prior to maturity. These regulations allow withdrawal of such funds in an insured “member bank” if that institution agreed that a sufficient emergency necessitated payment. (12 C.F.R. sec. 217.4(d) (1973).) This regulation has recently been modified to the extent that urgent circumstances need no longer exist before funds may be withdrawn prior to the maturity date. However, early withdrawal will allow the bank to impose a penalty resulting in a loss of interest on the funds. (38 Fed. Reg. 18641 (July 13, 1973).) Early withdrawal of funds evidenced by a time certificate of deposit in insured “nonmember banks” was similarly restricted. (12 C.F.R. sec. 329.4(a), (d) (1973).) This regulation has been comparably modified. 38 Fed. Reg. 18543 (July 12, 1973).
The aforementioned Federal regulations should not be determinative of the issue in this case, yet I believe they are of value to a complete understanding of the matter, for they demonstrate that the “res” of the certificate may be subject to fluctuation through withdrawal of funds from the time certificate account. In fact I believe that examination of these regulations accurately suggests the possibility that the form of instrument in this case is not being presently issued.
I am of the opinion that the substance of the transaction must govern. (Lanigan v. Apollo Savings, 52 Ill.2d 342.) The various reasons upon which the majority relies, i.e., evidence of indebtedness, negotiability, and inability to change the amount of funds in a time certificate of deposit, are not of consequence to the determination of this matter. McCormick v. Hopkins makes clear that this is a deposit, and it must therefore be governed by section 2(a) of the Joint Rights and Obligations Act, which also pertains to passbook and checldng accounts. Further, to hold as the majority does emasculates the explicit legislative intent expresssed in section 2(a) which requires a separately signed agreement by all necessary parties in order to create a valid joint tenancy for a “deposit in any bank *** transacting business in this State ***.”