Brown v. Hanger, 78-217

• Decision Date: 13 February 1979
• Docket Number: No. 78-217,78-217
• Citation: 368 So.2d 63
• Parties: Lorraine W. BROWN, Individually, and as Personal Representative of the Estate of Andrew G. Brown, Deceased, Appellant, v. Elizabeth HANGER and the Florida National Bank and Trust Company at Miami, Appellees.
• Court: Florida District Court of Appeals

Page 63

368 So.2d 63

Lorraine W. BROWN, Individually, and as Personal Representative of the Estate of Andrew G. Brown, Deceased, Appellant, v. Elizabeth HANGER and the Florida National Bank and Trust Company at Miami, Appellees.

No. 78-217.

District Court of Appeal of Florida, Third District.

Feb. 13, 1979.

Rehearing Denied March 19, 1979.

Knight, Peters, Pickle, Niemoeller & Flynn and J. T. Blackard, Miami, for appellant.

Starr W. Horton, Miami, Edmonson S. Couric, Jr., Coral Gables, for appellees.

Before KEHOE and SCHWARTZ, JJ., and CHARLES CARROLL (Ret.), Associate Judge.

SCHWARTZ, Judge.

This appeal challenges a final judgment which denied a widow's attempt to reach funds in the hands of a person who had been given them by her husband during his lifetime, the source of which was allegedly property owned by the entireties by the husband and wife. We affirm in part and reverse in part.

The appellant Lorraine W. Brown is the widow of Dr. Andrew G. Brown. They had been married for over 40 years when he died in February, 1975. During the marriage Dr. and Mrs. Brown held several parcels of real property by the entireties. One such parcel, on Biscayne Boulevard in Miami, was sold in 1965 for over $65,000.00 cash. Another was an operating orange grove in Polk County which the couple had owned for many years and was still held by the entireties at Dr. Brown's death.

From 1959, until his death, the appellee, Elizabeth Hanger, had been Dr. Brown's medical assistant, secretary and friend. For some years before his death the doctor had been giving Ms. Hanger a great deal of money, well over $150,000.00 in all. These gifts took the form, among other things, of various savings accounts, life insurance, and a $50,000 inter vivos trust of which Ms. Hanger was the beneficiary and Florida National Bank and Trust Company the trustee. The source of these payments was in turn, three checking accounts which were in Dr. Brown's name alone: a "personal account," an "office account," which held the proceeds of his medical practice, and a "grove account," in which the receipts from the Polk County grove were deposited.

After Dr. Brown died and Mrs. Brown then purportedly first discovered the gifts which had been made to Ms. Hanger, ¹ she filed this action against her, seeking money damages and to impose a constructive trust against assets in Ms. Hanger's name. The basis of the claim was that Ms. Hanger had been "unjustly enriched" by the receipt of property which really belonged to Mrs. Brown, that is, entireties properties which had been owned by Dr. and Mrs. Brown, and to which Mrs. Brown was wholly entitled as the surviving spouse. By the time of trial, Mrs. Brown had narrowed the alleged sources involved to the proceeds of the sale of the Biscayne Boulevard property and the "profits" of the Polk County grove.

In the final judgment rendered after a non-jury trial, the trial judge specifically found that

" . . . the plaintiff has traced the assets from the sale of a home on Biscayne Boulevard owned as tenants by the entireties by the decedent and plaintiff to (the Florida National Bank and Trust Company) inter vivos trust ultimately modified in favor of the defendant Hanger . . . " (emphasis supplied)

Nonetheless the court denied the plaintiff all relief and Mrs. Brown appealed. She claims error (a) in the lower court's refusal to impose a constructive trust in her favor upon the inter vivos trust established with the proceeds of the Biscayne Boulevard property, and (b) in the denial of her claim for money damages against Ms. Hanger in the amount Dr. Brown paid to her benefit from the "grove account." We agree with the appellant's first contention, and disagree with the second.

Since it was demonstrated to the trial court's satisfaction that the source of the inter vivos trust was the Biscayne Boulevard entireties property, we hold, on the authority of Lerner v. Lerner, 113 So.2d 212 (Fla.2d DCA 1959), that Mrs. Brown must be deemed the equitable owner of that trust. The record demonstrated that Dr. Brown received the proceeds of the sale of the Biscayne Boulevard property and placed them into an individually held account. Under the law of Florida, he is deemed to have held those funds as trustee for himself and his wife, or, more precisely, as trustee for the estate by the entireties. See Merrill v. Adkins, 131 Fla. 478, 180 So. 41 (1938); Sheldon v. Waters, 168 F.2d 483 (5th Cir. 1948). As the supreme court stated in Dodson v. National Title Ins. Co., 159 Fla. 371, 31 So.2d 402, 404 (1947):

"The income from, or The proceeds of, the sale of real estate held by the entirety is equally the property of the husband and the wife. It is held by the unity. Either one taking possession holds for the benefit of both. That is the rationale of our prior decisions." (emphasis supplied)

When these proceeds were given, in turn, to Ms. Hanger and found their way into the identified Res represented by the Florida National inter vivos trust, they retained their trust character. 33 Fla.Jur., Trusts, § 73, p. 75, and cases cited. Florida National thus became the trustee, not for the named beneficiary, Ms. Hanger, who was not a purchaser for value, but rather for the entireties estate. E. g., Sewell v. Sewell Properties, Inc., 159 Fla. 570, 30 So.2d 361 (1947). Finally, when Dr. Brown died, Mrs. Brown became the owner of the entire estate, in this case, the beneficial interest in the inter vivos trust. E. g., Anderson v. Trueman, 100 Fla. 727, 130 So. 12 (1930).

In accordance with this line of analysis, the court, in Lerner v. Lerner, supra, upheld the claim of a widow which was in all material aspects identical to that asserted by Mrs. Brown against Ms. Hanger's interest in the trust. In that case, both Mr. and Mrs. Lerner joined in the conveyance of real property they owned by the entireties. The consideration for the sale, 46 shares of stock, was issued to the husband alone; he at once assigned them, without the wife's knowledge, to his brother, Max Lerner. The court held, at 113 So.2d 216:

" . . . Appellee, Lydia E. Lerner, may trace the forty-six shares of stock (Lerner Groves, Inc.) into the hands of appellant, Max Lerner, who received same without paying any consideration therefor; and the estate by the entireties is preserved in said stock, as between the appellee and appellant . . . "

This holding is determinative of Mrs. Brown's right to the Florida National trust estate. ²

As to the separate claim made with respect to the funds allegedly derived from the grove property, we affirm the judgment below. The plaintiff admits that she is unable to trace any such monies to any particular assets now owned by Ms. Hanger. She seeks only a money judgment of over $100,000.00 against the defendant in the total amount of "grove funds" Dr. Brown gave to Ms. Hanger, on the ground that the defendant has to that extent been "unjustly enriched" at the plaintiff's expense. The appellant has cited no authority, and we have found none, which suggests that such a cause of action exists. Absent...