NO. 84-92
IN THE SUPREME COURT OF THE STATE OF MONTANA
1.984
-
DONA B. PETERSON,
Plaintiff and Respondent,
-vs .-
DONNA KABRICH,
Defendant and Appellant.
APPEAL FROM: District Court of the Tenth Judicial District,
In and for the County of Fergus,
The Honorable Peter L. Rapkoch, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Torger S. Oaas argued, Lewistown, Montana
For Respondent :
Craig R. Buehler argued, Lewistown, Montana
Submitted: September 20, 1984
Decided: November 28, 1984
Clerk
Mr. Justice L. C. Gulbraildson delivered the Opinion of the
Court.
Donna Kabrich appeals from an order of the Tenth
Judicial District Court, Fergus County, directing her to
transfer title to certain real property in Fergus County,
Montana, into the name of the respondent, Dona Peterson. We
affirm the decision of the District Court.
The respondent, Dona Peterson, is a retired school
librarian living in El Paso, Texas. She is a widow, and her
immediate family at the time this action accrued consisted of
her sister, Etta Trankle, and three nephews. Del Kabrich was
one of these nephews, and the son of Etta Trankle. The
appellant, Donna Kabrich, was married to Del Kabrich.
Sometime after her husband died in 1978, respondent added Del
Kabrich's name to a joint tenancy signature card for her
checking account, number 726-015-8, at First State Bank in El
Paso, Texas. Peterson mailed the signature card to Kabrich,
who signed it and returned it by mail to Peterson. This was
apparently done in hopes of facilitating the administration
of her estate upon her death. Respondent had designated Del
Kabrich the administrator of her estate in her will because
he had a law degree and business experience. All of the
money in account 726-015-8 was deposited by the respondent,
who also exercised exclusive control over the account.
The Kabriches rented a home in Lewistown, Montana. In
June of 1980, Del and Donna Kabrich were advised by their
landlord in Lewistown, Montana, that they must either buy the
home they were renting, or move out. The Kabriches discussed
their predicament with the respondent, and on June 24, 1980,
respondent transferred $10,000 from account number 726-015-8
to Del Kabrich, which was used as a down payment on the
property. The balance of the purchase price, $20,000, was
transferred from the account on July 10, 1980, to Del
Kabrich. Title to the Lewistown property was transferred to
Del and Donna Kabrich. On July 15, 1980, respondent advanced
an additional $4,200 to the Kabriches for the purpose of
making improvements on the property. There is no written
agreement concerning the nature of the transfer between
respondent Peterson and her nephew, Del Kabrich. The only
written evidence of the transaction consisted of two letters
allegedly written by Del Kabrich.
The first, dated January 10, 1981, is a typewritten
note allegedly from Kabrich to his mother, Etta Txankle,
acknowledging the transfer as a loan from respondent. It is
signed simply "Jr.", Kabrich's nickname. A handwriting
expert for the defendant-appellant concluded the letter was a
forgery after defendant entered the letter into evidence.
The second letter, acknowledged to be handwritten by Del
Kabrich to his aunt, the respondent, detailed the financial
status of the Kabriches as of February 19, 1981. The letter
ended by tendering a $500 payment to respondent, although no
mention was made of any loan.
In September, 1981, Del Kabrich died. Title to the
Lewistown property passed to Donna Kabrich alone. Respondent
made several demavds of appellant to the effect that she make
some arrangement to repay the $34,200 transfer, alleged by
respondent to be a loan. Appellant resisted, maintaining
that the transfer was a gift. On April 28, 1982 the
respondent filed an action against appellant in District
Court, alleging that the entire transfer of funds from her
checking account to purchase the Lewistown property was a
loan, which appellant had refused to acknowledge or repay.
The prayer requested a decree ordering Kabrich to transfer
title in the Fergus County property to Peterson. A trial was
held on September 19, 1983, before the Honorable Peter
Rapkoch, sitting without a jury. On November 18, 1983, the
court entered its findings of fact and conclusions of law.
The court found that gift was intended the
transfer, that a resulting trust had arisen in favor of the
plaintiff, and that plaintiff was entitled to have the
property transferred into her name. On the same day, the
court issued its order requiring Donna Kabrich to transfer
C
tit1.e in the Lewistown property to Peterson, and from this
order Kabrich appeals.
The first issue raised by appellant is whether the
District Court erred in failing to find that the transfer of
funds from Peterson to Del Kabrich was a gift under Montana
law regarding joint tenancy bank accounts.
Appellant contends that under Montana law, the addition
of Del Kabrich's signature to the signature card for
Peterson's checking account created a gift of the monies held
in that account. In order to constitute a gift, the addition
of a party's signature to a bank account signature card must
satisfy all the requirements of a gift inter vivos: (1)
delivery; (2) donative intent; (3) acceptance by the donee.
State Board of Equalization v. Cole (1948), 122 Mont. 9, 14,
195 P.2d 989, 992. Thus the question here is whether
Peterson intended to make a gift of the funds in her checking
account when she added her nephew's name to the signature
card. The language on the signature card is quoted below:
"I or we in making this deposit and at
all times in doing business with this
bank, specifically agree to all of the
terms and conditions printed on the
reverse side hereof.
"The above entitled joint account
deposited by us, or either of us, and all
moneys credited to the same, or
heretofore or hereafter credited, is by
mutual agreement payable to either of the
undersigned, or the survivor or survivors
of them. The receipt or acquittance by
any one of the undersigned, to whom such
payment is made, shall be valid and
sufficient release and discharge to said
bank for all payments made."
It is true, as appellant argues, that Montana cases
have held that "signing a signature card containing an
agreement that the deposit is payable to either of the
co-depositors or the survivor settles the question of
donative intent to make a joint tenancy." Casagranda v.
Donahue (1978), 178 Mont. 479, 483, 585 ~ . 2 d1286, 1288;
Cole, 122 Mont. at 15, 195 P.2d at 992. However, when the
donor-depositor raises the issue of donative intent during
his or her lifetime, the language on the signature cards is
not conclusive evidence that a gift was intended. Anderson
v. Baker (Mont. 1982), 641 P.2d 1035, 1038, 39 St.Rep. 273,
276-77. In Anderson, the donor added her son's name as joint
tenant to a savings account and two certificates of deposit,
and delivered the passbook and certificates to him. Later,
she demanded their return and her son refused to comply. The
donor filed a complaint praying for the return of the
documents and for the removal of her son's name from them.
Both sides moved for summary judgment and the trial court
awarded each one-half of the total amount on deposit. The
donor appealed, and in reversing the district court this
Court held as follows:
" [Wlhere . . .
a depositor during his or
her lifetime raises the issue of
ownership of funds in a joint tenancy
account, the statements on the signature
card are not conclusive and additional
evidence may be examined to ascertain the
true intent of the parties ...
". . . We are also mindful that the
signature cards are forms containing
language drafted by the depository
institution. While the 1a.nguage thereon
may very well describe the agreements
between the depositor"and the depository,
it can hardly be expected to accurately
express the intentions and relationships
between the joint tenants about which the
depository typically has little, if any
knowledge. Where the donor-depositor, as
in the instant suit, indicates during her
lifetime that her intent is other than
that revealed on the signature card, we
hold such evidence admissible."
Anderson, 6 4 1 P.2d at 1 0 3 8 , 39 St.Rep. at
276-77.
Here, the donor is still alive, and testified at length
at trial. She testified that by having her nephew sign the
signature card, she hoped to promote an uncomplicated
administration of her estate following her death. This hope
was based on her belief that Del Kabrich had greater business
and legal experience than any other of her close relatives.
In addition, Peterson emphatically testified that none of the
money was intended a.s a gift. Rather, it was considered a
loan with expectation of repayment. Peterson's understanding
in this regard was based to a certain extent on an earlier
loan from her to Kabrich, made when he mustered out of the
armed forces. That loan, used to purchase an automobile, was
repaid in full by Kabrich.
Peterson also presented testimony that she had loaned
money to another nephew to purchase real estate under a
similar arrangement, i.e. there was no writing formalizing
the loan, the debtor nephew having simply agreed to repay the
money as he was able. This loan was being repaid according
to the oral agreement, and Peterson testified that she
expected the same result when she transferred funds to Del
Kabrich to purchase the Lewistown property.
The Anderson rule clearly applies here. We find that
the addition of Del Kabrich's signature to the signature card
of Peterson's checking account is insufficient evidence to
overcome Peterson's testimony that there was no donative
intent to make a gift.
The appellant's second issue is whether the transfer of
funds from the respondent to her nephew, Del Kabrich, raised
a presumption that the transfer was intended as a gift.
Section 72-24-104, MCA provides: "When a transfer of
real property is made to one person and the consideration
thereof is paid by or for another, a trust is presumed to
result in favor of the person by or for whom such payment is
made. "
This presumption, however, is supplanted by a
rebuttable presumption of gift in those cases where the
parties stand in close relation to one another, such as
husba.nd.and wife, or parent and child. Platts v. Platts
(1959), 134 Mont. 474, 480-81, 334 P.2d 722, 727; Clary v.
Fleming (1921), 60 Mont. 246, 198 P. 546. We have refused to
extend the presumption to more distant relationships than
those mentioned above. See Detra v. Bartoletti (1967), 150
Mont. 210, 433 P.2d 485 (denying extension of presumption of
gift to the unexplained transfer of property between
siblings) .
However, the appellant argues that Peterson stood -
in
loco parentis to Del Kabrich, and that relationship should.
trigger the presumption of gift.
The trial court specifically found that no - -
in loco
parentis relationship existed between Peterson and Del
Kabrich. The trial court's findings will not be disturbed
when supported by substantial evidence. Poepping v. Monson
(1960), 138 Mont. 38, 43, 353 P.2d 325, 328. Here, there was
ample evidence upon which the trial court could base its
finding. In order to stand - -
in loco parentis to another, a
person must intentionally assume the status of a parent by
accepting those responsibilities and obl.igations incident to
the parental relationship without benefit of legal adoption.
Fevig v. Fevig (N.M. 1977), 559 P.2d 839, 841. See also In
re Marriage of Allen (Ct.App.Wash. 1981), 626 P.2d 16, 21;
Workman v. Workman (Okla. 1972), 498 P.2d 1384, 1386.
Evidence before the District Court indicated that
although Peterson was close to all three of her nephews, she
never assumed any parental obligations toward Del Kabrich.
Their relationship was limited to occasional visits and the
excha.nge of letters and Christmas gifts. At the time the
transfer was made, Del Kabrich was a grown man, and he lived
in close contact with his actual mother. With the exception
of a loan from Peterson to Kabrich made when he left the
armed forces (which was repaid), there is no indication in
the evidence that Peterson had ever attempted or intended to
assume the status of parent with respect to Del Kabrich. The
trial court's finding that no - -
in loco parentis relationship
existed between. Del Kabrich and the respondent was supported
by substantial evidence, and therefore will not be disturbed..
Since no presumption of gift arose under the facts of
this case, and because it is evident that Peterson advanced
the entire purchase price of the Lewistown property while
title passed to Del and Donna Kabrich, a resulting trust in
favor of Peterson is presumed. Section 72-24-104, MCA;
Poeppinq, 138 Mont. at 46-47, 353 P.2d at 330; First State
Bank of Philipsburg v. P.lussigbrod (1928), 83 l l n . 68, 92,
uot
271 P. 695, 704. The presumption is rebuttable, McQuay v.
McQuay (19281, 81 Mont. 311, 320, 263 P. 683, 686, and the
only remaining issue is whether the appellant sustained her
burden of proof in overcoming the statutory presumption.
Absent a presumption of gift, the appellant must establish
that a gift was made by "clear, convincing, strong and
satisfactory evidence . . . more than a mere preponderance of
the evidence." Detra, 150 Mont. at 218, 433 P . 2 d at 489.
In the instant case, tne evidence offered by the
appellant falls short of establishing a gift by clear,
convincing, strong and satisfactory evidence. An examination
of the trial transcript reveals that Peterson understood the
transfer of funds to be a loan, to be repaid by her nephew
and appellant as they were able. As discussed above, this
understanding was based in part on prior dealings between
Peterson and her nephews. Peterson also introduced into
evidence without objection a February 19, 1981, letter
written by Del Kabrich to her discussing the Lewistown
property, detailing Kabrich's financial affairs at the time,
and then tendering an unexplained payment of $500. At the
trial, respondent maintained that she understood the $500 to
be a repayment on the money she advanced to pay for the
Lewistown property. Appellant, however, maintained that the
unexplained $500 payment was rather a "token of good will,"
and that the transfer of funds had been intended as a gift.
As further proof that the transfer was originally intended to
be a gift, appellant maintains that Peterson attempted to
introduce a forged letter at trial, supposedly from Del
Kabrich to his mother, Etta Trankle, which referred to the
money used to purchase the Lewistown property as a "loan"
from Peterson.
Testimony d u r i n g t h e t r i a l i n d i c a t e d t h a t t h e a p p e l l a n t
and h e r mother-in-law had a stormy r e l a t i o n s h i p . In fact,
Trankle had sued appellant following her son's death to
prevent appellant from o u s t i n g T r a n k l e from the Lewistown
p r o p e r t y , where s h e was r e s i d i n g .
The record also indicates that Etta Trankle died in
November of 1982, and shortly thereafter her personal
r e p r e s e n t a t i v e d i s c o v e r e d t h e l e t t e r , d a t e d J a n u a r y 1 0 , 1981,
in Trankle's purse. The letter was turned over to the
a t t o r n e y f o r T r a n k l e ' s e s t a t e , Leonard McKinney. The l e t t e r
was t y p e w r i t t e n e x c e p t for the signature, " J r . " , which was
Del K a b r i c h ' s nickname. I n t h e course of h i s i n v e s t i g a t i o n ,
c o u n s e l f o r t h e r e s p o n d e n t d i s c o v e r e d t h e l e t t e r and o b t a i n e d
it from M r . McKinney. H e t h e n s e n t c o p i e s t o t h e c o u r t and
appellant's attorney, and notified them of his intent to
introduce t h e letter i n t o evidence a t t r i a l . Counsel for
a p p e l l a n t t h e n r e t a i n e d a h a n d w r i t i n g e x p e r t , who on t h e d a t e
of trial, confided t o Peterson's a t t o r n e y t h a t he believed
the letter to be a forgery. Peterson's attorney then
withdrew the letter as one of plaintiff's exhibits, and
counsel for appellant instead entered the letter into
evidence. The expert then testified that "based on his
analysis of the two characters "Jr.", the letter was a
forgery.
It is appellant's contention that respondent Dona
Peterson attempted to present the court with a forgery,
thereby i n d i c a t i n g t h a t she o r i g i n a l l y intended t h e t r a n s f e r
of h e r f u n d s t o buy t h e Lewistown p r o p e r t y t o be a g i f t . We
n o t e t h a t t h e r e was no p r o o f introduced a t t r i a l i n d i c a t i n g
any c o n n e c t i o n between P e t e r s o n and t h e f o r g e d L e t t e r . And
in fact, it was the appellant, and not respondent, who
presented the court with the January 10, 1981 letter. The
trial court was obviously not impressed with appellant's
contention in this regard, as it found a resulting trust to
have arisen in favor of Dona Peterson. We are bound here to
follow the conclusion of the trial judge, who had the
opportunity to observe the conduct and demeanor of the
witnesses on the stand. Poeppinq, 138 Mont. at 44, 353 P.2d
at 329; McQuay, 81 Mont. at 320-321, 263 P. at 686. There is
substantial evidence of record to support the determination
by the trial court that no gift was made by the respondent in
this case. Poepping, 138 Mont. at 43, 353 P.2d at 328.
We therefore affirm the jud.gment of the District Court.
We concur:
Chief Justice
d, -wwdAd&J
I I /
Justices '