Hyland v. Standiford

• Decision Date: 17 October 1961
• Docket Number: No. 50435,50435
• Citation: 111 N.W.2d 260,253 Iowa 294
• Parties: Mrs. L. A. HYLAND, Mrs. Mary Josephine Justin, nee Van Cleave, and William H. Longman, Appellees, v. Mary A. STANDIFORD; Claude M. Clovis, Executor of the Estate of B. E. Standiford, Deceased; and Claude M. Clovis, Guardian of the Property of Mary A. Standiford, Incompetent, Appellants.
• Court: Iowa Supreme Court

Page 260

111 N.W.2d 260

253 Iowa 294

Mrs. L. A. HYLAND, Mrs. Mary Josephine Justin, nee Van Cleave, and William H. Longman, Appellees, v. Mary A. STANDIFORD; Claude M. Clovis, Executor of the Estate of B. E. Standiford, Deceased; and Claude M. Clovis, Guardian of the Property of Mary A. Standiford, Incompetent, Appellants.

No. 50435.

Supreme Court of Iowa.

Oct. 17, 1961.

Rehearing Denied Dec. 12, 1961.

Stephens, Thornell & Millhone, Clarinda, for appellants.

Paul V. Nichols, Shenandoah, for appellees.

SNELL, Justice.

This is an action in equity to determine the ownership and right to possession of shares of stock of American Telephone and Telegraph Company. The facts are not in material dispute. The conclusions to be drawn therefrom present the issue.

A trust estate created by residents of California provided for its termination after the death of a beneficiary for life. It was then provided, 'Upon such termination, the entire principal of the trust estate, or so much thereof as then remains, together with any undistributed income therefrom, shall be distributed to Benjamin Edgar Standiford, of Northboro, Iowa, if he be living, and if he be not living, then to his wife Mary Ann Standiford, and if she be not living then to' contingent beneficiaries not involved herein. Benjamin Edgar Standiford and Mary Ann Standiford both survived the termination of the trust.

The beneficiary for life died in June 1950. The assets in the trust estate, consisting of extensive real and personal property, included 54 shares of capital stock of American Telephone and Telegraph Company. On February 17, 1951, Benjamin Edgar Standiford, as succeeding trustee, assigned this stock to 'Benjamin E. Standiford and (Mrs.) Mary A. Standiford, as joint tenants with right of survivorship and not as tenants in common.' The 54 shares were then reissued by the company under date of February 28, 1951, to 'Benjamin E. Standiford and Mary An. Standiford as joint tenants with right of survivorship and not as tenants in common.'

Through the purchase and conversion of debentures and stock purchase rights between June 1951 and May 12, 1958, additional shares of stock, all issued in the same way, were acquired. One thousand shares in all were so issued and were evidenced by 16 separate certificates. One certificate for 100 shares is dated May 12, 1958. All others are dated prior to September 1957. The number of certificates (16) issued on six different dates over a period of seven years is significant in view of the claim that it was all a mistake and error.

The purchases of the additional shares were financed from the sale of other assets and from income over the Standifords' frugal needs.

Mr. Standiford was a successful investor of funds. From time to time, in order to purchase stock, money would be borrowed in anticipation of income. Notes with collateral clauses for borrowed money were signed by Benjamin E. Standiford. The notes were secured by stock assignments signed by both Benjamin E. Standiford and Mary A. Standiford. It is interesting to note that these assignment signatures were guaranteed by W. H. Longman, then the cashier and now vice president of the lending bank. Mr. Longman is one of the plaintiffs in the present action. Apparently, from the premise of commendable precaution, Mrs. Standiford was not ignored. Her signature assigning the stock was required. Mr. Longman's position while acting as a banker does not bolster his present insistence that Mrs. Standiford had no interest in the stock.

On January 1, 1954, Benjamin E. Standiford and Mary A. Standiford rented a safety deposit box at the bank. Mrs. Standiford was named as one of the lessees but her signature does not appear. There is no record that she ever attempted or had access to the box. Between January 2, 1954, an January 17, 1958, Mr. Standiford signed to enter the box 22 times.

There is no record that Mrs. Standiford ever had physical possession of the American Telephone and Telegraph stock separate from her husband. To what extent Mr. and Mrs. Standiford may have consulted and conferred about their business does not appear, but Mr. Standiford was the business head of the family. In letters to a cousin, he used the personal pronoun 'I' in telling of his business deals and used the words, 'I have,' 'I borrowed,' 'I bought,' and other words of like import.

By 1955 Mrs. Standiford was in failing health. Since April 30, 1957, she has been confined in the Mental Health Institute as incurably insane. Benjamin E. Standiford was appointed guardian of her property. The guardianship inventory signed by Benjamin E. Standiford lists 'joint title' in some real estate and general assets of personal property, 'none.' Mr. Standiford must have thought that his wife had some property rights. Otherwise there would have been no reason for a guardian of her property.

Mr. and Mrs. Standiford had no children.

On September 18, 1957, Mr. Standiford executed a will. This was after his wife's confinement in the hospital. He devised and bequeathed all his property to a trustee for the use and benefit of Mary A. Standiford 'so long as she shall live.' Subject to the life estate, Mr. Standiford bequeathed 100 shares of American Telephone and Telegraph stock to his banker and 100 shares to each of two nieces. Six hundred shares were bequeathed to five of his wife's relatives. One hundred of the shares owned at the time of Mr. Standiford's death were acquired after the execution of his will. Specific devises and a residuary bequest disposed of the remainder of his property.

Mr. Standiford died November 27, 1958, survived by his incompetent widow but without issue. For Federal Estate Tax purposes, his estate, consisting of a home, farm land in Iowa and Missouri, bank accounts, farm equipment, government bonds and American Telephone and Telegraph stock, was valued at $348,923.27. Mr. Standiford's will was admitted to probate. Mr. Claude M. Clovis, Mr. Standiford's attorney, the draftsman of the will and the nominated executor, was appointed executor and qualified. Mr. Clovis was also appointed successor guardian for Mrs. Standiford.

After Mr. Standiford's death, a stock split resulted in the acquisition of 2,000 additional American Telephone and Telegraph shares issued in the same names and form as before.

Mr. Clovis, as guardian of Mrs. Standiford, claimed all of the American Telephone and Telegraph stock for his ward as surviving joint tenant. An election to disavow the will has been made for the incompetent surviving widow. Just how much property there is other than what is claimed to be in joint tenancy does not appear.

Mr. Longman, the banker friend, Mrs. Hyland and Mrs. Justin, nee Van Cleave, nieces of Mr. Standiford and beneficiaries under his will, feeling aggrieved by the prospective failure to receive property bequeathed to them, brought this action claiming that the words creating a joint tenancy were a mistake; that Mr. Standiford never intended to pass title; never parted with ownership or possession; that there was neither gift nor consideration; that Mr. Standiford was the owner and that they are entitled to possession and ownership under his will.

The trial court held that the property passed pursuant to the will and sustained plaintiffs' claims.

I. Together with the trial court, we regret the uncertainties that frequently arise when property is held in joint tenancy. We are aware of the disappointment that follows when a benefaction fails because not subject to testamentary disposition. However, we cannot ignore plain and positive words and actions establishing property rights. A change in conditions does not act retrospectively in establishing an original intent.

The original source of the property now in dispute was a trust estate. The creator of the trust provided that the property should go to Mr. Standiford, if living, and if he be not living, then to his wife. While the provision for Mrs. Standiford was contingent, it did indicate the thinking of the parties that Mrs. Standiford might become the sole owner of the property. Mr. and Mrs. Standiford having no children, it was perfectiy natural for them to think and provide that upon death of either the survivor should take whatever property they owned. Sixteen separate records of property ownership made on six different dates over a period of seven years created just such a right of survivorship. Not until after the failure of Mrs. Standiford's mental health was there any indication of a contrary intent. The use by Mr. Standiford of the personal pronoun 'I' when referring to transactions he was handling is not very persuasive. Such a habit is common with many men. Certainly such usage is not sufficient to overcome plain and positive written records of title and ownership. Neither does failure to show activity by a wife in business affairs handled by her husband prove either lack of interest or ownership.

In 1957, with Mrs. Standiford confined in a mental hospital and described in the guardianship as non compis (sic) mentis, Mr. Standiford, for the first time, did something that might conflict with the survivorship rights of his wife. By will, he attempted to control the ultimate testamentary disposition of the property. His efforts were 'too little and too late.'

II. The common law unities of interest, title, time and possession necessary for the creation or determination of joint tenancies have lost their importance. There has been no comparable diminution of importance in questions of termination or severance.

The common law presumption favoring joint tenancies has been reversed by statute in many jurisdictions including Iowa. Section 557.15 of the Code, I.C.A. (chapter on real property) provides that conveyances to two or more in their own right create a tenancy in common, unless a contrary intent is expressed. Comparable provisions indicating legislative intent are found in Section 637.3, the ...