Ross v. Ross

• Citation: 314 N.E.2d 888,2 Mass.App.Ct. 502
• Parties: Etta B. ROSS v. James W. ROSS, Jr.
• Decision Date: 08 August 1974
• Court: Appeals Court of Massachusetts

Page 888

314 N.E.2d 888

2 Mass.App.Ct. 502

Etta B. ROSS v. James W. ROSS, Jr.

Appeals Court of Massachusetts, Middlesex.

Argued Oct. 12, 1973.

Decided Aug. 8, 1974.

Robert R. Clark, Boston, for defendant.

Morris Michelson, Boston, for plaintiff.

Robert W. Hagopian, Wrentham, for Orion Research, Inc., amicus curiae, submitted a brief.

Before HALE, C.J., and GRANT and ARMSTRONG, JJ. ARMSTRONG, Justice.

By this suit in equity the plaintiff seeks to establish her sole ownership of certain shares of corporate stock held in the name of the defendant, her 'former husband' ¹, of certain shares of stock and real property held in their names jointly, and of certain household furnishings and art objects in their home. In his counterclaim the defendant seeks a determination that certain real property in Lafayette, California, held in the plaintiff's name, is their joint property. The defendant has appealed from a final decree by which the plaintiff was determined to be sole owner of all the properties, with minor exceptions. The judge made a report of material facts. The evidence is reported in full.

' The appeal brings before this court questions of fact as well as of law. It is the duty of the court in these circumstances to examine the evidence and to decide the case according to its judgment; but the decision of the trial judge upon questions of fact based upon oral testimony heard by him will not be reversed unless it is plainly wrong. Lindsey v. Bird, 193 Mass. 200, 201, 79 N.E. 263 (1906)'. Hogan v. Hogan, 286 Mass. 524, 525, 190 N.E. 715, 716 (1934). Krasner v. Krasner, --- Mass. ---, ---, ^a 285 N.E.2d 398 (1972). Albano v. Jordan Marsh Co., --- Mass.App. ---, ---, ^b 311 N.E.2d 568 (1974). 'From the evidence we can find facts not expressly found by the judge. If convinced that he was plainly wrong we can find facts contrary to his findings.' Lowell Bar Assn. v. Loeb, 315 Mass. 176, 178, 52 N.E.2d 27, 30 (1943), and cases cited. Younker v. Pacelli, 354 Mass. 738, 739, 242 N.E.2d 141 (1968). Turner v. Guy, --- Mass.App. ---, ---, ^c 311 N.E.2d 921 (1974). Figueiredo v. Silvia, --- Mass.App. ---, ---, ^d 311 N.E.2d 924 (1974).

We summarize the facts as found by the judge and by us. The parties were married in 1950 in California where the defendant was attending college and receiving a stipend under the G. I. Bill. The plaintiff was receiving rental income from some real estate, and was holding a parttime clerical job. The job terminated in 1951, when the parties had a daughter, their only child. After graduating the defendant worked for a time as a chemist for an oil company. While in California the plaintiff bought a parcel of land for $1,000 which the judge found to be her own money. That land, record title to which is in the plaintiff (defendant so states in his answer; there is no evidence on the subject), is in dispute in this case. In 1954 the couple moved to Madison, Wisconsin, where the defendant was a graduate student and was earning only fellowship or assistantship income. The plaintiff became a real estate broker and earned money from commissions and from capital gains on the resale of real estate she purchased. When they left Madison in 1957 to come to Boston, they had $14,000, which the judge found to be the sole property of the plaintiff.

At an undisclosed time the defendant became an assistant professor at the Massachusetts Institute of Technology (M.I.T.), an employment he left in mid-1962 to become vice president and director of research for Orion Research, Inc. (Orion), a company founded in August, 1962, by the defendant and three other persons. One of these persons held 1500 shares; the defendant and the others held 500 shares each. The defendant paid $500 for his shares, by a check drawn on the parties' joint checking account. The judge made no finding whether the $500 was the entire consideration for the shares issued. On the uncontradicted evidence by the President and Treasurer of Orion, respectively, we find that the $500 was nominal consideration only, and that the principal consideration was Orion's desire to retain the services and technical expertise of the defendant. In 1964 the defendant was given the opportunity to purchase another 500 shares, for a nominal $500, and did so, again drawing the check on the joint account. In 1966 the defendant purchased shares for a nominal price of ten cents apiece--this time 1333 1/3 shares. These shares were issued at a time when Orion was arranging financing to develop manufacturing capacity, and the issue was apparently subject to a contingent liability for an additional payment if Orion failed to achieve a certain level of profitability over the ensuing five years. The contingency did not arise. In 1967 one of the original founders resigned: his 500 shares were purchased back by Orion and were resold to the other founders. The defendant purchased 127 of those shares on March 30, 1967, for a price of either $4,152.90 ($32.70 per share) or $4,762.50 ($37.50 per share) by check drawn on the joint account. The funds thus drawn had been deposited for that purpose by the plaintiff, who obtained the funds by pledging a savings bank passbook issued in her name alone. On the same day, March 30, 1967, the defendant purchased 169 1/3 shares from Orion for a nominal price of ten cents per share, or $16.93. Later in 1967--the year Orion shares were first sold publicly--approximately 500 shares were purchased by the parties and were issued in the name of the defendant as custodian for their daughter. These last shares, which cost in excess of $18,000 are not in dispute. All other shares purchased--originally totalling 2629 2/3 shares but now totalling 68,716 shares due to stock splits--although issued in the name of the defendant individually, are claimed by the plaintiff as her sole property.

The defendant was salaried during the employments discussed. His annual salary at M.I.T. was between $9,000 and $10,000. He started with Orion in 1962 at $12,000 per year, by 1964 was paid $15,000 per year, and by 1967, $18,000 per year.

After coming to Boston the plaintiff continued her activities in real estate investment and realized substantial gains, notwithstanding limited capital, by purchasing properties with heavy mortgage financing and then selling them at a profit. In 1961 she owned in her own name a six-apartment house on Bowdoin Street in Cambridge from which she received gross rental income of $11,000 per year and which she operated at a profit. She sold the property that year for $50,000, for a profit of $15,000. Between 1961 and 1964 she owned in her own name a three-apartment building at 7 Chauncy Street in Cambridge, which she operated at a profit, and which she sold in 1964, along with 9 Chauncy Street, for $185,000. Her gain on the sale was $100,000. Her rental income, gains from the sale of real estate, and income and gains from the purchase and sale of stock were all deposited in the parties' joint checking account. The parties during this period also held in their joint names the house they then lived in at 140 Dudley Road, Newton, which was sold in 1965 for $50,000, a profit of $15,000. In 1964 they purchased their present family house, 61 Gatehouse Road, Newton, for $52,500. They mortgaged the house for slightly more than half of its purchase price. Their own payment consisted of two cashier's checks purchased with funds from the joint checking account, which the judge found to be 'her sole property.' The judge also found, 'The title to the house was put in their names as tenants by the entirety just for convenience. I find that there was no intent to make a gift of the property to him or to give him any interest in the property. It was just done for convenience with the understanding that in reality it was to be her sole property.'

During this period the parties purchased various works of art and household furnishings, title to which is here in dispute, and as to the value of which there was sharply conflicting testimony. Little purpose would be served by reciting the testimony concerning the many purchases. The items were all paid for by checks drawn on the joint account, usually written by the plaintiff, sometimes in the defendant's presence. Sometimes the purchases (according to the judge's finding) were accompanied by bills of sale made out to the plaintiff. The judge found that, with the exception of two primitive wood carvings, which the plaintiff testified she bought as gifts for the defendant, all the art works and household furnishings were paid for by the plaintiff from her sole funds, that title to them was taken in her name, and that she had no intention of giving any beneficial interest therein to the defendant.

The last item in dispute is 124 shares of Cambridge Trust Company (bank) common stock, held in the parties' names jointly. The shares were purchased by the plaintiff directly from the bank, out of the proceeds of the sale of other shares of stock. The latter shares were purchased subsequent to 1957 with funds from the parties' joint account but were registered in the plaintiff's name alone. The judge found that the plaintiff furnished the entire consideration for the purchase of the bank shares, that 'she put the stock in the joint names for convenience only, after discussing with the bank the advantages of doing this, mainly the income tax deduction', and that 'the . . . (defendant's) name was used on the shares of stock as a joint tenant merely for convenience and that no gift was intended to him.'

The Shares of Bank Stock.

The general rule is well settled that where one provides the entire purchase price for property but causes title to be transferred to another, a presumption arises that the latter holds the property on a resulting trust for the one who provided the entire purchase price. This rule is subject to the exception that where a husband or wife (as to the wife, see English v. English, ...