Oehler v. Falstrom, 39841

• Decision Date: 01 April 1966
• Docket Number: No. 39841,39841
• Citation: 142 N.W.2d 581,273 Minn. 453
• Parties: (Charles E. Briney), Harry W. OEHLER, Executor of Estate of Charles E. Briney, deceased, substituted as appellant, Appellant, v. Oscar FALSTROM et al., Respondents.
• Court: Minnesota Supreme Court

Page 581

142 N.W.2d 581

273 Minn. 453

(Charles E. Briney), Harry W. OEHLER, Executor of Estate of Charles E. Briney, deceased, substituted as appellant, Appellant, v. Oscar FALSTROM et al., Respondents.

No. 39841.

Supreme Court of Minnesota.

April 1, 1966.

On Appeal from Taxation of Costs

May 6, 1966.

Rehearing Denied May 10, 1966.

SYLLABUS BY THE COURT

1. In order to constitute a valid gift inter vivos, the donor must deliver the property to the donee, or to someone for him, with intent to invest title in the donee, and without reserving any right to reclaim the property. It must be voluntary, gratuitous, absolute, and made by a person competent to contract. The legal elements are (1) delivery, (2) intention to make a gift on the part of the donor, and (3) absolute disposition by him of the thing which he intends to give to another.

2. When the plaintiff had established by the evidence submitted in his behalf that he had delivered two checks totaling $5,500 to defendants, that these had been applied in making the downpayment on the home purchased by them, and that such payments were intended to be a loan to defendants, plaintiff had made out a prima facie case of ownership. Thereafter the burden rested on the defendants to establish by clear and convincing evidence their claim that said payment as made to them constituted a gift.

3. Issue was fully joined between plaintiff and defendants when plaintiff claimed that money he paid over to defendants was a loan and defendants claimed that such money was a gift. Both fact issues were properly before the court for determination.

Harry W. Oehler, St. Paul, for appellant.

Mansur, Mansur & Mansur, St. Paul, for respondents.

NELSON, Justice.

Plaintiff appeals from a judgment of the district court. ¹

The record indicates that in September 1959 the defendants moved to St. Paul and became adjoining neighbors and friends of plaintiff and his wife. Plaintiff's wife died in 1960 but the friendly association between plaintiff and defendants continued. In April 1961 defendants told plaintiff that they were going to purchase a home and it appears that in subsequent discussions it was agreed that if a suitable home could be found plaintiff would move in and live with defendants and also assist in financing the home.

A home located at 2160 Highland Parkway, St. Paul, was finally purchased by defendants pursuant to a contract for deed dated April 11, 1961. The contract set the purchase price at $26,500, and required defendants to make a downpayment of $5,500. They were to obtain a first mortgage of $21,000 to pay the balance and the contract provided that if they were unable to obtain the mortgage within 2 weeks the earnest money paid was to be refunded and the contract canceled. Defendants made a payment of $1,000 to the sellers by check on April 11, 1961, and obtained the mortgage loan for $21,000 within a day or two. Plaintiff had delivered his check for $1,000 on April 11 to defendants and on April 15 delivered his check for $4,500 to them to cover the total downpayment of $5,500.

Thereafter, plaintiff and defendants moved into and occupied the home at 2160 Highland Parkway. While so residing with defendants, plaintiff paid them $100 per month for room and board, this arrangement continuing until plaintiff moved out in December 1961.

It appears that during the period between April and October, 1961, plaintiff made no demand upon defendants for the return of the money advanced to cover the downpayment and that no conversation was had between the parties as to the status of the money at the time of the delivery of the checks. It appears that within 6 months from the time defendants made the purchase of the home and plaintiff advanced to them the downpayment, he contended that the money was a loan and presented to defendants a writing which was offered as plaintiff's exhibit C in the court below. This was in plaintiff's handwriting and contained the following words:

'I, Charles E. Briney, have loaned to Oscar and/or Elaine Falstrom the sum of 5500.00 dollars toward the purchase of a home located at 2160 Highland Pkwy., St. Paul, Minn. Said sum of money to be repaid in yearly installments without interest. On my death payments are to be paid to my estate.'

In various conversations during the period before plaintiff prepared this statement, defendants had thanked him for his generosity and defendant Oscar Falstrom informed plaintiff that he had been named a beneficiary in Falstrom's will so that if defendants predeceased plaintiff he would inherit the property. At these times plaintiff made no comment concerning, or demand for, payment. When he presented the statement to defendant Oscar Falstrom, the latter said that plaintiff would have to sue for it and also that Falstrom would see a lawyer for advice about the matter.

It also appears that prior to October 1961 plaintiff had gone to Pittsburgh and before going had taken out a travel insurance policy running to defendants as beneficiaries. However, when plaintiff returned from Pittsburgh he presented defendants with the foregoing writing and demanded that the money advanced be recognized by them as a loan. Defendants refused to do so and contend that the money was a gift. Defendant Oscar Falstrom testified that sometime before the money for the downpayment had been advanced he had said to plaintiff that 'Elaine (his wife) tells me that you want to give us the down payment on a home.' The record indicates that neither at the time of the delivery of the checks nor subsequently did the parties discuss repayment except when plaintiff presented the written statement--approximately 6 months after the downpayment had been made.

Suit was thereafter brought by the plaintiff demanding judgment against defendants for $5,500 and interest thereon from October 1961; that such judgment be decreed a first lien against the property subject only to the first mortgage thereon; and that the real estate be sold under the direction of the court. Separate answers were filed by defendants, each consisting, except for certain admissions, of a general denial of the allegations contained in plaintiff's complaint. Just before trial, which was had to the court by consent of the parties, defendants moved to amend their answers to delete the general denial and make the following allegation in lieu thereof:

'That the defendants, and each of them, admit the receipt of $5500.00,.$1000.00 having been received on April 8, 1961, and $4500.00 having been received on April 11, 1961, but allege that the receipt of said money was in the form of a gift by the plaintiff and not in the form of a loan as set forth in the complaint.'

The court permitted the amendments.

After trial the court ordered judgment for defendants after determining that '(p)laintiff has not proved by a fair preponderance of the evidence that the transaction was a loan and, therefore, plaintiff is not entitled to recover anything from the defendants herein.' The court made no reference to defendants' claim that plaintiff had made a gift to them nor to their testimony on that issue. Plaintiff's subsequent motion to vacate the order and amend the findings and conclusions in his favor was denied, as was his alternative motion for a new trial, and judgment was thereafter entered in defendants' favor.

A careful perusal of the entire record makes clear the contentions of the parties--plaintiff's, that the money he had paid to defendants constituted a loan; and defendants', that the money constituted a gift for the purpose of enabling them to purchase the home at 2160 Highland Parkway.

1. To constitute a valid gift inter vivos, the donor must deliver the property to the donee, or to someone for him, with intent to vest title in the donee, and without reserving any right to reclaim the property. It must be voluntary, gratuitous, absolute, and made by a person competent to contract. There must be freedom of will; the gift must be complete; the property must be delivered by the donor and accepted by the donee, and the gift must be put into immediate and absolute effect. The legal elements are (1) delivery, (2) intention to make a gift on the part of the donor, and (3) absolute disposition by him of the thing which he intends to give to another. See, 8A Dunnell, Dig. (3 ed.) § 4020, and cases cited.

A delivery must be made with the present intention of making a gift and passing the title absolutely. Questions of intent are questions of fact. 8A Dunnell, Dig. (3 ed.) § 4024, and cases cited. Questions of acceptance are questions of fact. A gift perfected by delivery is an executed contract and needs no consideration, but a mere promise to make a gift, being executory, is invalid without a consideration. Id. §§ 4026, 4027, and 4028. A gift, however, can only be established by clear and convincing evidence. Id. §§ 4038, 4039; Hooper v. Vanstrum, 92 Minn. 406, 100 N.W. 229; Jenning v. Rohde, 99 Minn. 335, 109 N.W. 597; Werner v. Miller, 248 Minn. 75, 78 N.W.2d 63.

2. Here, it would appear that when plaintiff had established by the evidence submitted in his behalf that he had delivered the two checks totaling $5,500 to defendants and that these had been applied in making the downpayment on the home purchased by them, and that such payments were intended to be a loan to them, he had made out a prima facie case of ownership and the burden then rested on defendants to establish a gift. While the answers were practically general denials to begin with, their amendment alleging that the receipt of the money was 'in the form of a gift by the plaintiff and not in the form of a loan' asserted as a defense the claim that the plaintiff made a gift inter vivos. It was thereafter defendants' burden to establish, by clear and convincing evidence, a gift as against plaintiff's claim of a loan.

In the case of Chard v. Darlington, 243 Minn. 489, 68 N.W.2d 405, the plaintiff brought an action to...