Gilbert v. Brown

• Decision Date: 08 March 1985
• Citation: 693 P.2d 1330,71 Or.App. 809
• Parties: Irene L. GILBERT, Respondent, v. Helen Jo BROWN and John A. Brown, Personal Representatives of the Estate of Joe L. Gilbert, Deceased; Helen Jo Brown, personally; Traci Ann Gilbert Cory; Gayle Rae Jaca Leuenberger; Debra Jo Roser; John Gilbert Brown; Lisa Marie Brown; and Marcelyn Retallack Gilbert, Appellants. 83-0140; CA A30466.
• Court: Oregon Court of Appeals

Page 1330

693 P.2d 1330

71 Or.App. 809

Irene L. GILBERT, Respondent, v. Helen Jo BROWN and John A. Brown, Personal Representatives of the Estate of Joe L. Gilbert, Deceased; Helen Jo Brown personally; Traci Ann Gilbert Cory; Gayle Rae Jaca Leuenberger; Debra Jo Roser; John Gilbert Brown; Lisa Marie Brown; and Marcelyn Retallack Gilbert, Appellants.

83-0140; CA A30466.

Court of Appeals of Oregon.

Argued and Submitted July 13, 1984.

Decided Jan. 23, 1985.

Reconsideration Denied March 8, 1985.

Michael G. Cowgill, Albany, argued the cause, for appellants. With him on the briefs were Weatherford, Thompson, Brickey & Powers, P.C., Albany.

J. Ray Rhoten, Salem, argued the cause, for respondent. With him on the brief were Rhoten, Rhoten & Speerstra, Salem.

Before RICHARDSON, P.J., and WARDEN and NEWMAN, JJ.

NEWMAN, Judge.

Defendants appeal a judgment that plaintiff owns ten bonds, the coupons and the coupon proceeds and that defendant personal representatives hold those items in trust for her. The bonds were each $5,000, unregistered bearer bonds denominated The Port of Portland, Industrial Development Revenue Bonds, 1980 series (Hayden Island, Inc. Project), maturing December 1, 1989. The bond coupons are payable on June 1 and December 1 of each year. The amount of interest accruing semiannually on the bonds is $2,312.50. We affirm.

Plaintiff is the widow of Joe L. Gilbert, who died in 1982. Helen Jo Brown is the only surviving child of the decedent. She and her husband, John A. Brown, are defendants and the personal representatives of the decedent's estate. Helen Jo Brown and the remaining defendants, other than John A. Brown, are beneficiaries under the will.

Before filing the action, plaintiff filed a claim for the bonds with the personal representatives, who disallowed her claim. Plaintiff asserted that she owned the bonds, coupons and proceeds but that the personal representatives had possession of them. The court tried plaintiff's action as an equitable matter and imposed a constructive trust on those items for her benefit. We review de novo. ORS 19.125(3).

Plaintiff and the decedent were married on December 29, 1977. Just before their marriage they executed an antenuptial agreement that provides:

"All property acquired by husband or wife, or both of them, after solemnization of the marriage, whether real or personal, shall be owned by them jointly or severally as agreed by them and as provided by the instrument of acquisition or conveyance to them, or instruments or conveyances between them, including all rents, issues, profits, substitutions for and proceeds of said property."

On June 27, 1980, they opened an account at the Salem brokerage office of Shearson Hayden Stone, Inc. (Shearson). The account application shows that plaintiff and decedent opened a brokerage account in the name of "Joseph L. Gilbert and Irene L. Gilbert JT TEN." Each signed the account application. It designated the initial transaction as the purchase of "50 Hayden Is. BD." The account application stated, "If you wish to have a joint account with rights of survivorship (when one dies his interest passes to the survivor(s)), STRIKE OUT PARAGRAPH (b)," and provides:

"If instead, you desire to have an account as Tenants-in-Common without rights of survivorship (when one dies, his interest passes to his estate), STRIKE OUT PARAGRAPH (a) and FILL IN PARAGRAPH (b) indicating names and percentage amounts of the interests of each tenant. (The only names to be inserted are those of the present owners of the account. Heirs or beneficiaries CANNOT be designated on this form.)"

Plaintiff and decedent struck paragraph (b). They did not strike the paragraph headed "Paragraph (a) Joint Tenants with Rights of Survivorship" that provides:

"It is the express intention of the undersigned to create an estate or account as joint tenants with the right of survivorship and not as tenants in common. In the event of the death of either or any of the undersigned, the entire interest in the joint account shall be vested in the survivor or survivors on the same terms and conditions as therefore held, without in any manner releasing the decedent's estate from the liability provided for in the next preceding paragraph." ¹

The account statement shows that on August 22, 1980, Shearson received $50,000 for the bonds and $950.69 for the purchase commission. The decedent paid for the bonds and the commission from his own funds, and the bonds were listed in the account. Plaintiff did not pay anything.

Plaintiff testified:

"A. Well, we talked it over about the bonds. And Joe and I talked about buying the bonds as a gift. And then we went down. We made an appointment and went down.

"Q. Where did you go?

"A. We went to Shearson's in Salem.

"Q. And when you signed that, what was the conversation about those bonds; who they were to belong to?

"A. Well, they were for if anything happened to Joe, I would receive 'em, or if anything happened to me, Joe would receive them.

"Q. And was there other conversation about the ownership of those bonds?

"A. Well, he said they were ours."

"Q. And what's the basis of your claim?

"A. Well, they are in our joint names. And Joe bought those bonds--we bought them for gift. If anything happened to Joe, I would get them. If anything happened to me, he would get them."

Shearson received the bonds for the account some time before October 1, 1980, after which it delivered the bonds by mail to plaintiff and the decedent. Plaintiff testified:

"Q. Now, after you acquired those bonds, were they delivered to you folks?

"A. Yes, sir.

"Q. How? Sent in the mail? Did you go get 'em?

"A. I can't remember exactly, but I think they were sent in the mail. Registered, probably.

"Q. Now, what happened to those bonds after you got delivery?

"A. Joe took them down to Warren Gill's office."

The purchase and delivery of the bonds was the only transaction that plaintiff and the decedent, or either of them, conducted through the Shearson account.

After receiving the bonds from Shearson, and before December 1, 1980, the decedent delivered the bonds to the law office of Warren Gill, his attorney in Lebanon, ² who was not in his office when the decedent delivered the bonds. The decedent handed them to Francis Rice, Gill's secretary, and stated, "Here are my Port of Portland bonds. I want you to put them in your safe." The bonds remained in the office safe until after the decedent's death.

Gill was unable to contact the decedent on December 1, 1980. He clipped the ten coupons due that date and deposited the proceeds in an account that the decedent maintained at First Interstate Bank under the name of "Helen Jo Brown, et al." The decedent deposited the proceeds due June 1, 1981, and December 1, 1981, in the same account. He deposited the proceeds due June 1, 1982, in his individual checking account at First Interstate Bank.

Rice testified that on several occasions the decedent told her that, after his death, "[The bonds] are Helen Jo's." Gill testified that the decedent told him that he wanted to use the bonds to pay inheritance taxes and that after his death the bonds were to be delivered to Helen Jo and would belong to her. Gill testified that decedent frequently referred to the bonds as "mine" and "These are mine. Give them to Helen Jo." Both Helen Jo and her husband testified that the decedent had told each of them that, if anything should happen to him, the bonds belonged to Helen Jo.

Plaintiff did not see the bonds after the decedent delivered them to Gill's office. She did not discuss them again with the decedent, or talk about the bonds with Gill, his secretary, Helen Jo Brown or John Brown before the decedent's death.

The court stated that it was

"the Court's determination and finding that the nature of the ownership of these bonds was established when they were bought. They were owned with rights of survivorship and there's not been a sufficient showing of any change.

"That the bonds rested in Mr. Gill's office is not determinative of the issue in this case, and if the case is examined in terms of interest, the Court accepts the testimony of the plaintiff that there was a donative intent for an inter vivos gift at the time of the purchase of the bonds."

The judgment provides that the court:

"Finds generally for the plaintiff that the gift of the Port of Portland, Hayden Island bonds was and is an inter vivos gift, and determines that defendants, Helen Jo Brown and John A. Brown, as Personal Representatives of the Estate of Joe L. Gilbert, Deceased, should deliver the bonds and remaining coupons and the proceeds of the coupons cashed by them, and pay interest on the proceeds of the coupons cashed, to the plaintiff, now, therefore

" * * * * *

"IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the plaintiff is the owner of Port of Portland, Industrial Development Revenue, 1980 Series, (Hayden Island) Bonds Nos. 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, together with all coupons or the proceeds of all coupons becoming due on and after December 1, 1982, and defendants, Helen Jo Brown and John A. Brown, Personal Representatives of the Estate of Joe L. Gilbert, Deceased, are ordered to deliver such to the plaintiff.

"IT IS FURTHER ADJUDGED AND DECREED that the defendants, Helen Jo Brown and John A. Brown, Personal Representatives of the Estate of Joe L. Gilbert, Deceased, are declared to hold and to have held such bonds and coupons and the proceeds of cashed coupons in trust for the plaintiff.

"IT IS FURTHER ADJUDGED that the plaintiff have and recover judgment against the defendants, Helen Jo Brown and John A. Brown, as Personal Representatives of the Estate of Joe L. Gilbert, Deceased, for the sum of $2,312.50 on account of proceeds of the coupons due December 1, 1982, together with interest thereon at the rate of 9% per annum from December 1, 1982, and for the further sum of $2,312.50 on account of coupons on...