Owen v. Owen

• Decision Date: 21 June 1976
• Docket Number: No. 57467,57467
• Citation: 336 So.2d 782
• Parties: J. B. OWEN et al. v. W. H. OWEN et al.
• Court: Louisiana Supreme Court

Page 782

336 So.2d 782

J. B. OWEN et al. v. W. H. OWEN et al.

No. 57467.

Supreme Court of Louisiana.

June 21, 1976.

Joseph A. Reeves, Jr., Emmons, Henry & Reeves, Jonesboro, for plaintiffs-respondents.

D. G. Brunson, Baker, Culpepper & Brunson, Jonesboro, for defendants-applicants.

CALOGERO, Justice.

This is a lawsuit by six of the seven children of I. M. and Henrietta Owen, including one J. B. Owen, against their brother (the seventh child W. H. Owen) and his vendees (Wayne S. Bush and Charles Wayne Bush) to have two transfers from their father, I. M. Owen, one to W. H. Owen and the other to W. H. Owen and J. B. Owen jointly, declared simulations, or, alternatively, nullified because they were donations in disguise and donations Omnium bonorum, or, alternatively, to have such property collated in a partition. ¹

On March 22, 1957, I. M. Owen executed three separate deeds of sale covering tracts composed respectively of 40 acres, 40 acres, and 15 acres. He conveyed 40 acres to his son W. H. Owen for a stated consideration of $100,40 acres to a second son J. B. Owen for a stated consideration of $720, and 15 acres to both W. H. Owen and J. B. Owen for a stated consideration of $300. The property descriptions are more fully given in the Court of Appeal opinion, Owen v. Owen, 325 So.2d 283 (La.App.2nd Cir. 1975), and are incorporated herein by reference. The properties are here referred to respectively as tracts one, two, and three. Ownership of tracts one and three are those at issue in this lawsuit.

In October 12, 1957, I. M. Owen died intestate, and on February 1, 1970 his widow, Henrietta Owen, died intestate. In 1972, following the deaths of Mr. and Mrs. Owen and, of course, subsequent to the execution of the three deeds mentioned above, one of the plaintiffs, J. B. Owen, conveyed all of his interest in tract three to his brother W. H. Owen for $1500. Thereafter, on January 29, 1973, W. H. Owen conveyed the acreage made up of tracts one and three in the following manner: twenty-seven and one-half acres comprising the western half thereof to defendant, Wayne S. Bush for $7,837.50, and twenty-seven and one-half acres comprising the eastern half thereof to defendant Charles Wayne Bush, Wayne S. Bush's son, for $7,837.50. Some nine months thereafter this suit was instituted by six of the Owen children against the seventh child, W. H. Owen, and his vendees Wayne and Charles Bush. Plaintiffs asked that the court set aside the transfers from I. M. Owen to his sons, and order the property returned to the decedent's estate or declare that each of the forced heirs own an undivided one-seventh interest in the property. Alternatively, plaintiffs asked that the property be collated under the provisions of Article 1227 Et seq. of the Civil Code.

After trial on the merits the Second Judicial District Court rendered judgment in favor of plaintiffs declaring that the two deeds attacked were null and void. In his reasons for judgment the trial judge described the transfers as 'simulations and donations in disguise.' The trial court judgment further declared that each of the seven children owned an undivided one-seventh interest in the designated tracts at issue in this suit.

From this judgment defendants W. H. Owen, Wayne Bush, and Charles Bush appealed to the Second Circuit Court of Appeal alleging error in the trial court's judgment. The Second Circuit Court of Appeal affirmed the trial court's decision holding that the conveyances from I. M. Owen of the controverted tracts one and three were donations in disguise, donations Omnium bonorum and consequently absolutely null. Owen v. Owen, supra.

We granted writs upon defendants' application. 326 So.2d 376 (La.1976). In this Court, defendants allege that the Court of Appeal erred in finding that the conveyances by I. M. Owen were donations in disguise and donations Omnium bonorum, that they erred in concluding that a donation Omnium bonorum is an absolute nullity, and that they erred in decreeing that the seven heirs of Mr. and Mrs. I. M. Owen were owners each of an undivided one-seventh interest in the subject property.

The following facts are borne out by the record and are not seriously contested. In March 1957, at the time I. M. Owen purported to sell the land in question to his sons, he sold tract number three, comprising 15 acres, for $300, although the property was worth $45 per acre, or $675. ² On that same date he purported to sell tract one, comprising 40 acres, for a stated consideration of $100, although it was worth $45 per acre, or $1800.

In 1970 the fifty-five acres owned by W. H. Owen were valued at $10,725. He sold the land to the Bushes in 1973 for approximately $16,000. In 1975, that same property was worth $18,700. Although neither of the courts below reached this issue, it is clear that the Bushes purchased the disputed property for a fair price.

The acts of sale by which I. M. Owen conveyed the three tracts in 1957 identified the vendor as I. M. Owen and the vendees as W. H. Owen and J. B. Owen. The deeds, in authentic form, recite that the properties were sold to the respective vendees for the stated consideration 'cash in hand paid, the receipt of which is hereby acknowledged.' The deeds do not indicate that I. M. Owen was the father of W. H. and J. B., nor that these three properties constituted all of the property owned by Mr., or by Mr. and Mrs., Owen.

The only contested issue of fact in the case is whether the sons actually paid their father for the property. J. B. judicially confessed that he paid nothing for the property. W. H. claimed that he did pay for the property which was transferred to him, but could produce no evidence to support his assertion. The trial court found that nothing was paid by either brother for the land, a finding the Court of Appeal upheld. There is no error in this finding, and we agree with the courts below that the March 22, 1957 sales of tracts one and three to W. H. Owen and to J. B. Owen and W. H. Owen, respectively, were not sales but were disguised donations under Article 2444 of the Civil Code. ³

It was established at the trial that before the Bushes purchased the property in question from W. H. Owen they were told by J. B. Owen that there was some question as to whether W. H. Owen could transfer a 'clear deed,' but they were given no reason for J. B.'s assertion. Wayne Bush also learned from W. H. Owen that he had bought the property from his father. However, there is no evidence that the Bushes ever had any knowledge of Mr. and Mrs. I. M. Owen's financial condition (at any time) nor any knowledge of the value of the property in March of 1957, some fifteen years before their purchase of the property.

The plaintiffs established at trial that at the time of the transfers in question Mr. and Mrs. Owen were living on social security and welfare payments, and that they owned no immovable property other than the three tracts transferred; but there was no evidence as to the amount of income they were receiving, nor was there any evidence as to what their living expenses were. It was established that I. M. Owen had $600 when he died in late 1957, a sum W. H. Owen kept in an account 'for his mother.' ⁴

The plaintiffs contend, and the courts below found, that when I. M. Owen sold these two tracts he had divested himself of all of his property without reserving to himself enough for subsistence. Article 1497 prohibits such a donation in the following language:

'The donation Inter vivos shall in no case divest the donor of all his property; he must reserve to himself enough for subsistence; if he does not do it, the donation is null for the whole.'

In order to sustain an attack on a gift as a donation Omnium bonorum, the heirs must prove conclusively that the donation divested the donor of all of his property. Whitman v. Whitman, 206 La. 1, 18 So.2d 633 (1944); Potts v. Potts, 142 La. 906, 77 So. 786 (1918); Hearsey v. Craig, 126 La. 824, 53 So. 17 (1910); Hinton v. May, 241 So.2d 583 (La.App.2nd Cir. 1970). In light of the stringent requirements set forth in the aforementioned cases, we are not as certain as were the lower courts that the requirements of Article 1497 were met so as to brand I. M. Owen's disguised donations as donations Omnium bonorum. We nonetheless accept the finding of the lower courts, for, even assuming the donations were Omnium bonorum, the decision of the Court of Appeal in our view must be reversed for the reasons we relate thereinafter.

The plaintiffs allege first that the transfers from parent to sons were simulations. In our law, a simulation is a transfer of property which is not what it seems. Simulations are of two types: pure simulations, and disguised transfers. ⁵ In a pure simulation, sometimes called a non-transfer, the parties only pretend to transfer the property from one to the other, but in fact both transferor and transferee intend that the transferor retain ownership of the property. When this type of simulation is successfully attacked, the true intent of the parties is revealed, which was that no transfer had in fact taken place. In a contest between a vendor and vendee in this situation the true intent of the parties is effectuated and the courts hold that no transfer took place because the simulated sale is an absolute nullity. Successions of Webre, 247 La. 461, 172 So.2d 285 (1965); Schalaida v. Gonzales, 174 La. 907, 142 So. 123 (1932); Milano v. Milano, 243 So.2d 876 (La.App.1st Cir. 1971). The other type of simulation is a disguised transfer which seems on its face to be a valid sale, but which is intended by the parties to be a gift rather than a sale. When this sort of simulation is attacked successfully, as it has been here under Article 2444, the true intent of the parties is likewise effectuated by the law. A valid transfer has taken place, but its form is a donation rather than a sale and the Code articles on donations apply to the transfer....