Free v. Bland, 7223

• Decision Date: 12 July 1960
• Docket Number: No. 7223,7223
• Citation: 337 S.W.2d 805
• Parties: J. W. FREE, Appellant, v. James F. BLAND, Individually, and as Independent Executor, Appellee.
• Court: Texas Court of Appeals

Page 805

337 S.W.2d 805

J. W. FREE, Appellant, v. James F. BLAND, Individually, and as Independent Executor Appellee.

No. 7223.

Court of Civil Appeals of Texas, Texarkana.

July 12, 1960.

Rehearing Denied Sept. 6, 1960.

Fulton, Hancock & McClain, Edwin M. Fulton, Gilmer, for appellant.

Olin P. McWhirter, Greenville, Florence, Garrison & Holt, Gilmer, for appellee.

FANNING, Justice.

Appellant, J. W. Free, sued appellee James F. Bland, individually and as independant executor of the estate of Mary Ida Free, for recovery of the title to and possession or certain United States Savings Bonds, together with accrued interest thereon, and for a judgment declaring tht appellant was the sole owner of said bonds and that appellee had no rights therein.

Both parties are in agreement upon the essential facts of the case. J. W. Free and Mary Ida Free were husband and wife until her death on April 23, 1958. Among other United States Savings Bonds purchased during this marriage, from the years 1941 through 1945, were the following co-owner bonds, payable to 'Mrs. Mary Ida Free or Mr. John W. Free'; 'Mr. John W. Free or Mrs. Mary Ida Free'; 'John W. Free or Mrs. Ida Free'; 'J. W. Free or Mrs. Ida Free'; and 'Mr. John W. Free or Mrs. Ida Free', to-wit: seven 'E' bonds of the par value of $1,000 each; four 'F' bonds of the par value of $1,000 each; one 'F' bond of the par value of $5,000; and seven 'F' bonds of the par value of $10,000 each. Upon the death of Mary Ida Free, all the co-owner bonds listed above were uncashed, having an aggregate value of $87,035.50. Mary Ida Free's written will, duly probated in Upshur County, Texas, vested the bulk of her estate in her son, James F. Bland, appointing him independent executor, for which he duly qualified.

In appellee's answer and cross action to appellant's suit, he claimed that, because the Frees used community funds to purchase the co-owner bonds listed above, he as the heir to the bulk of Mrs. Free's estate was entitled to one-half the bonds, or, as an alternative, to one-half their value. Appellant filed a motion for summary judgment, with supporting affidavits, to which the appellee filed no reply, nor controverting affidavits. Upon a hearing on appellant's motion, the trial court, on November 23, 1959, rendered judgment for the appellant for the title to and possession of said co-owner bonds, but at the same time ordered that appellee, in equity, ought to recover from appellant one-half of the value of the bonds, and fixed a lien on the proceeds thereof to enforce the judgment.

J. W. Free has appealed. Appellant's first three points of error are based upon the contention that, since the purchase of the co-owner United States Saving Bonds constituted a contract which guarantees, among its other provisions, payment to either surviving co-owner of the bonds in the event of the death of the other, and, since there was no pleading or proof that purchase of the bonds was in fraud of the community property rights of May Ida Free, the trial court erred in rendering judgment against the appellant for one-half of the value of the bonds and fixing a lien thereon. In this connection it is appellant's prime position that under the record in this cause he is entitled to the rendition of a judgment in his favor for the full title and possession of the bonds in question and all the fruits thereof, free and clear of any and all claims and liens asserted by appellee.

The regulations of the United States Treasury Department which pertain here (Department Circular No. 530, as revised) provide that 'If either co-owner dies without the bond having been presented and surrendered for payment or authorized reissue, the surviving co-owner will be recognized as the sole and absolute owner of the bond and payment or reissue, as though the bond were registered in his name alone, will be made only to such survivor * * *.'

A few courts in states other than Texas, notably the Louisiana Supreme Court in Slater v. Culpepper, 222 La. 962, 64 So.2d 234, 37 A.L.R.2d 1216, have held this regulation to be merely a method of payment designed for the convenience of the government; also see the case of In Matter of Estate of Allen, 343 P.2d 867, Supreme Court of Washington, which follows the Slater v. Culpepper case, but which also recognizes that the Supreme Court of Texas reached the opposite conclusion in Ricks v. Smith, Tex., 318 S.W.2d 439, and in the course of its opinion in said cause the Supreme Court of Washington stated :

'We are not unmindful of the fact that the supreme court of Texas, although badly divided, reached the opposite conclusion in Ricks v. Smith, Tex., 318 S.W.2d 439. However, we prefer an adopt the view of the supreme court of Louisiana in Slater v. Culpepper, 222 La. 962, 64 So.2d 234, 237, 37 A.L.R.2d 1216. * * *'

Appellee relies principally on the Slater v. Culpepper case, supra, the Allen Estate case, supra, and the dissenting opinion of Justice Walker in Ricks v. Smith, supra.

The Supreme Court of Texas in Ricks v. Smith, Tex., 318 S.W.2d 439, 440, divided 6 to 3, with Chief Justice Hickman writing the opinion for the majority. We quote from said majority opinion in part as follows:

'It cannot be questioned that the opinion of the Court of Civil Appeals follows the rule adopted by a majority of the courts. A number of cases from other jurisdictions are cited in the annotation in 37 A.L.R.2d 1216 et seq. The annotation is to the Louisiana case of Slater v. Culpepper, 222 La. 962, 64 So.2d 234, 37 A.L.R.2d 1216, which case declined to give controlling effect to the Treasury regulations incorporated in the bonds, holding that to do so would nullify community property law of that State. While that case is the only one cited from a State having community property law, we agree with the Court of Civil Appeals that the purchase of the bonds was by a contract which created a property right,--not merely a method of payment for the convenience...