McDonald v. Clemens

• Decision Date: 18 February 1971
• Docket Number: No. 538,538
• Citation: 464 S.W.2d 450
• Parties: Charles J. McDONALD et al., Appellants, v. C. C. CLEMENS, Appellee.
• Court: Texas Court of Appeals

Page 450

464 S.W.2d 450

Charles J. McDONALD et al., Appellants, v. C. C. CLEMENS, Appellee.

No. 538.

Court of Civil Appeals of Texas Tyler.

Feb. 18, 1971.

R. L. Whitehead, Sr., R. L. Whitehead, Jr ., Longview, for appellants.

Smead, Roberts, Harbour, Smith, Harris, French & Parker, Paul E. French, H. P. Smead, Jr., Longview, for appellee.

DUNAGEN, Chief Justice.

This is an appeal from an order of the 188th District Court of Gregg County, Texas, granting a summary judgment. Appellee C. C. Clemens instituted a suit for declaratory judgment concerning certain United States Savings Bonds, the face amount of which totaled $118,000.00. C. C. Clemens is the surviving husband of Hannah McDonald Clemens, deceased. Hannah McDonald Clemens died testate on the 5th day of July, 1969. Charles J. McDonald and the other appellants in this cause are the children of Hannah McDonald Clemens, deceased, by a prior marriage and are the sole beneficiaries under the last will and testament of Hannah Clemens, deceased, which has been admitted to probate by the County Court of Gregg County, Texas. C. C. Clemens and Hannah Clemens were married in 1924 and lived together as husband and wife until the death of Hannah Clemens.

Appellee's original petition sought a declaratory judgment that certain Series H United States Savings Bonds, payable jointly to himself and his deceased wife, Hannah Clemens, were his sole and separate property. Appellants filed a general denial and thereafter appellee filed a motion for summary judgment which was supported by the affidavit of appellee attached thereto.

In response, appellants filed their first amended answer sworn to by Charles J. McDonald and therein set up the defense of fraud and also that it was the intention of the deceased that the bonds would be community property upon her death. In support of this, appellants filed an affidavit by Charles J. McDonald, who is the Independent Executor of the Estate of Hannah Clemens, deceased, and attached to the affidavit a note addressed 'To whom it may concern', bearing date 'April 4--56', alleged to have been written by Hannah Clemens, deceased, during her lifetime. Appellants offered nothing further in opposition to appellee's motion for summary judgment.

Following a hearing, the trial court entered judgment sustaining plaintiff-appellee's motion for summary judgment.

Appellants present three points of error which are as follows:

'FIRST POINT

'The trial court erred in rendering Summary Judgment for Plaintiff when the pleading and affidavits which must be taken as true raised numerous disputed genuine material fact issues.

'SECOND POINT

'The trial court erred in rendering Summary Judgment for Plaintiff when Plaintiff failed to negate Defendants' pleading of fraud.

'THIRD POINT

'The trial court erred in rendering Summary Judgment for Plaintiff when Plaintiff failed to negate Defendants' contention that the intent of the deceased was that the bonds would be community property upon her death.'

Appellee alleges in his motion for summary judgment that he and Mrs. Clemens were married in 1924 and said marriage continued until the death of Mrs. Clemens on July 5, 1969; that at the date of her death there were United States Savings Bonds on hand, the face amount of which totaled $118,000.00 which were listed by serial numbers, face amount, issue date and payee on Exhibit 'A' attached to appellee's motion for summary judgment and made a part of the same by reference for all purposes; that Hannah H. Clemens whose name appears as a payee on these bonds is one and the same person as Hannah Clemens, deceased; also that Claude C. Clemens whose name appears as a payee on these bonds is one and the same person as C. C . Clemens; further, that upon the death of Hannah Clemens (or Hannah H. Clemens) all of the savings bonds involved herein became the sole and separate property of C. C. Clemens; that the affidavit of C. C. Clemens is attached thereto and made a part of his motion for summary judgment by reference for all purposes, and that the pleadings, together with his motion for summary judgment, show that there is no genuine issue as to any material fact and that C. C. Clemens is entitled to a judgment as a matter of law.

The statements contained in appellee's affidavit are substantially the same as the allegations in his motion for summary judgment except for this additional statement in his affidavit: 'At the date of the death of Hannah Clemens, United States Savings Bonds were on hand all of which were payable to Hannah Clemens or this Affiant.'

Appellants in their first amended answer allege 'that C. C. Clemens was guilty of actionable fraud in from time to time representing to the deceased Hannah Clemens that said bonds were community property and thereby inducing her to invest therein to the detriment of the Defendants in this cause of action' and also that they would 'show to the Court that in May, 1931, the Plaintiff, as part of the consideration of the deceased, Hannah Clemens, placing her income from the McDonald Estate into the joint account, contracted with the said Hannah Clemens that any investment made out of said joint account would be community property.'

The essential parts of appellant Charles J. McDonald's affidavit insofar as the question to be determined on this appeal is concerned read as follows:

'I have known C. C. Clemens practically my entire life as he married my mother, Hannah McDonald, when I was a young boy. The act of C. C. Clemens in inducing my mother, Hannah Clemens, to buy, and in buying himself, the bonds made the basis of this lawsuit, so that they would contain a survivorship clause was done for the purpose of defrauding me and the other heirs of Hannah McDonald out of our portion of this property. In addition, the intent of my mother was that we would receive one-half of the bonds at the time of her death . This was represented to me both orally and in writing.

'Mr. Clemens has told various people in the community that upon my mother's death there would be very little left for the McDonalds, and I sincerely believe that he has done and is doing everything in his power to deprive us of the property of my deceased mother.

'There is attached hereto and made a part hereof a copy of a note which my mother wrote in 1956 which shows that the intention of she and my step-father was that the bonds would be community property and would vest in her children at the time of her death.'

The note referred to by the affiant Charles J. McDonald allegedly written by his mother, Hannah McDonald Clemens, reads:

'To Whom it may Concern:

'We leased our home place and 1/2 the royalty before the oil boom. Claude had leased the 60A. joining us and when he sold some royalty under the 60A he found out he didn't have any royalty. He had to go to court to get the childrens part as their mother was dead.

'When the oil boom came we leased 1/4 of our home place.

'Before the oil boom Claude sold 15A under the 62 1/2A. He brought out Mr. J. Afton Burke of Corsicana Tex. and a Notary. I begged him not to sell, we had quite an argument on our Front Porch which I can prove by Mr. Burke. The only excuse he could give, that it was more than it was worth.

'Sure we owed some debts and had for years, but none that just had to be paid. We were making a good living trucking at the same time we had about 15A royalty and it was community property under the home place which could have been sold if necessary. Claude realized what he had done when it was to late. Now he claims he had to sell to pay of our place. Which is not true. He just wanted the money and the 15A royalty was his.

'In May--31 we leased our 75A more or less to the Humble Refining Co. for $700.00 an acre. They paid $400.00 cash and $300.00 in oil. We received $18000.00 which we deposited in The First National Bank, Longview, Tex. in a joint acct.

'I give all the credit to Claude for making the trade. I put the McDonald estate, with the consent of the Court as part payment on the place and Claude & I paid out the rest so have some community property. To show my appreciation to Claude all the income from my part of the McDonald estate has been deposited to our joint acct. If it hadn't been for Claude, my children wouldn't have had anything . The cash and bonds in the Bank will be community property. 'April 4--56

'/s/ Mrs. Hannah Clemens'

The case of Free v. Bland, 369 U.S. 663, 82 S.Ct. 1089, 8 L.Ed.2d 180, which was decided by the United States Supreme Court in 1962, involved an appeal from the District Court of Upshur County, Texas, is squarely in point and has in no way been subsequently distinguished or overruled. In Free v. Bland, Series 'E' and 'F', United States Savings Bonds had been issued to husband and wife living in Texas, the savings bonds in question were payable to 'Mr. or Mrs. Free.' After Mrs. Free's death, her husband, J. W. Free, claimed exclusive ownership by operation of the applicable Treasury Regulations ¹ which provide that the survivor will be recognized as the sole and absolute owner. Bland, who was a son of Mrs. Free by a prior marriage and who was the principal beneficiary under her last will and testament, claimed an interest in the United States Savings Bonds by virtue of the Texas Community Property Laws. The lawsuit was originally filed by Bland against his stepfather, Free. Following an appeal to the Court of Civil Appeals, 337 S.W.2d 805, and the Texas Supreme Court, 162 Tex. 72, 344 S.W.2d 435, the United States Supreme Court granted writ of certiorari.

The similarity in Free v. Bland and the case now before this Court is readily apparent. In the instant case the United States Savings Bonds in issue are Series 'H' bonds. The applicable Treasury Regulations governing Series 'E', 'F' and 'H' bonds are identical. The payees in the United States Savings Bonds involved in this case are 'Mr. or Mrs. Clemens.' In the case at bar as was in the case of Free v....