Nichols v. Wray

Dr. Patsy NICHOLS and Mary Alice Bell v.
Shirley Bell WRAY

95-1093                                            ___ S.W.2d ___

                    Supreme Court of Arkansas
                 Opinion delivered July 15, 1996


1.   Appeal & error -- burden of obtaining ruling on appellants --
     no error found. -- Where the trial court's order did not
     address the request that the certificates of deposit be
     reformed, the burden of obtaining a ruling upon that requested
     remedy was upon the appellants; as the chancellor did not
     address it, and no objection was made to his failure to
     address it, the supreme court could not say that he erred in
     not reforming the instruments.  

2.   Contracts -- reformation of -- one not party to contract may
     not obtain reformation. -- One who is not a party to a
     contract may not obtain reformation.

3.   Banks & banking -- joint tenants have survivorship rights --
     unambiguous statutes are given their clear meaning. -- The
     language of Ark. Code Ann.  23-32-1005(2)(A) and (C) is
     clear; the opening of an account in the name of two or more
     persons designated as joint tenants or as joint tenants with
     right of survivorship "shall be conclusive evidence in any
     action or proceeding to which...the surviving party is a party
     of the intention of all of the parties to the account...to
     vest title to the account...in such survivor"; the first rule
     to be applied in statutory construction is to give the words
     in the statute their usual and ordinary meaning; if there is
     no ambiguity the supreme court gives a statute effect just as
     it reads.

4.   Banks & banking -- intent of decedent clear from the face of
     the certificates -- court's refusal to impose constructive
     trust not error. -- The chancellor's decision with respect to
     the certificates of deposit was not in error where he found
     "no evidence of fraud, undue influence or misrepresentation or
     any other abuse of the familial trust" and no evidence that
     the intent of the decedent as "conclusively" determined by the
     nature of the certificates of deposit was induced by any
     impropriety on the part of the appellee; intent may indeed not
     matter when the issue is whether there has been unjust
     enrichment and a constructive trust is sought, but if there is
     no basis for establishment of that restitutionary remedy,
     other than intent, then the statute controls.

5.   Appeal & error -- Hall case not overruled -- meaning of
     statute clear. -- The appellate court declined to overrule 
     Hall v. Superior Fed. Bank, 303 Ark. 125, 794 S.W.2d 611
     (1990) absent a constitutional challenge to the statute; the
     court cannot change the language of a statute the clear
     meaning of which was applied in the Hall case; were it not for
     the statute, as interpreted, the issue of whether a
     constructive trust should be imposed would arise almost any
     time a person decided to make a gift of a bank account to one
     of several siblings, simply on the basis of an argument that
     no parent could intend to favor one over another; overruling
     would not be appropriate.  

6.   Trusts -- imposition of constructive trust -- factors on
     review. -- To impose a constructive trust, there must be full,
     clear, and convincing evidence leaving no doubt with respect
     to the necessary facts, and the burden is especially great
     when a title to real estate is sought to be overturned by
     parol evidence; the test on review is not whether the
     appellate court is convinced that there is clear and
     convincing evidence to support the chancellor's finding but
     whether it can say that the chancellor's finding that the
     disputed fact was proved by clear and convincing evidence is
     clearly erroneous; the appellate court defers to the superior
     position of the chancellor to evaluate the evidence; a finding
     is clearly erroneous when, although there is evidence to
     support it, the reviewing court, on the entire evidence, is
     left with the definite and firm conviction that a mistake has
     been committed.

7.   Trusts -- imposition of constructive trust proper -- evidence
     indicated decedent's intention for daughters to share equally.
     -- The chancellor was not clearly erroneous in his finding
     concerning the decedent's intent in conveying the last parcel
     of land in light of evidence that indicated her intention that
     her daughters share equally in her property, and appellee's
     admission that the last conveyance was intended to protect the
     property in the event her mother entered a nursing home; the
     appellate court was not left with "a definite and firm
     conviction" that the chancellor made a mistake by deciding to
     impose the constructive trust.  
     

     Appeal from Boone Chancery Court; Roger Logan, Chancellor;
affirmed on appeal; affirmed on cross-appeal.
     Davis & Goldie, by:  Steven B. Davis, for appellants.
     James D. Sprott, for appellee.

     David Newbern, Justice.July 15, 1996  *ADVREP*SC3*

DR. PATSY NICHOLS AND MARY              95-1093
ALICE BELL                              Opinion Delivered:

               Appellants                    
     v.                                 Appeal from Boone
                                        County Chancery Court

SHIRLEY BELL WRAY                       Honorable Roger Logan,
                                        Chancellor
               Appellee
                                        Affirmed on Appeal;
                                        Affirmed on Cross-Appeal  



                     David Newbern, Justice.

     The late Eppa Sisco had three daughters, Dr. Patsy Nichols,
Mary Alice Bell, and Shirley Bell Wray.  Ms. Sisco's will purported
to divide her estate equally among the daughters, and there was
evidence that she expressed that intention often.  After her
husband's death, Ms. Sisco altered certificates of deposit by
placing Ms. Wray's name on them as joint owner with the right of
survivorship.  Ms. Bell and Dr. Nichols sought reformation of the
certificates or the imposition of a constructive trust for their
benefit.  The Chancellor did not rule on the reformation request
and declined to impose a constructive trust, citing Ark. Code Ann.
 23-32-1005 (Repl. 1994), as interpreted by Hall v. Superior Fed.
Bank, 303 Ark. 125, 794 S.W.2d 611 (1990), which makes the terms of
the certificates conclusive on the issue of the intent of the
depositor.  We are asked to overrule the Hall case, and we decline
to do so. 
     The Chancellor did impose a constructive trust for the benefit
of Dr. Nichols and Ms. Bell upon one parcel of land Ms. Sisco
conveyed to Ms. Wray.  That resulted from his finding that it was
Ms. Sisco's intention to convey the land to Ms. Wray and thus avoid
losing the property in the event she had to enter a nursing home
and not to make a gift of it to Ms. Wray.  Ms. Wray cross-appeals
that part of the decision, and we affirm on cross-appeal.
     In 1979, Ms. Sisco and her husband offered Ms. Wray a one-acre
tract of land in exchange for her agreement to take care of them. 
She agreed, and the land was deeded to her.  In 1983, they gave her
another tract for the construction of a garage.  Neither Dr.
Nichols nor Ms. Bell objected to either of these gifts of real
estate, and the Chancellor, finding that the transactions were
intended as gifts, concluded there were no circumstances warranting
the imposition of a constructive trust upon those properties.
     In 1985, Mr. Sisco died.  Ms. Sisco executed new signature
cards on certificates of deposit naming Ms. Wray as Joint Tenant in
place of Mr. Sisco.  Over Ms. Wray's objection, Dr. Nichols
testified that her mother told her Ms. Wray was included on the
certificates because a bank employee said a "local person" was
needed on the accounts.  Both Dr. Nichols and Ms. Bell testified
they were aware that Ms. Wray's name was on the accounts, and that
they trusted her "judgment" regarding those funds.  The Chancellor,
as noted above, declined, on the basis of the Hall case, to
consider any evidence of Ms. Sisco's intent regarding the
certificates other than the documents themselves.
     The next transaction occurred in January 1991, when Ms. Sisco
deeded pasture land to Ms. Wray for the purpose of "squaring up"
her property.  The land was rented to farmers as pasture, and Ms.
Wray collected the rent.  The Chancellor did not find evidence
sufficient to impose a constructive trust on that property.
     The property upon which the Chancellor did impose a
constructive trust was the last of the real estate transactions
between Ms. Wray and Ms. Sisco in which Ms. Sisco, in 1994,
conveyed the property on which her residence was located.  

                           1. The CDs
     The Chancellor's order stated that  23-32-1005(2)(C) and the
Hall case precluded him from considering, with respect to the
certificates of deposit, the evidence presented by witnesses who
testified that Ms. Sisco intended her three daughters to share
equally in her estate.  His order states:

     As regards the joint accounts, there is no evidence of fraud,
     undue influence or misrepresentation or any other abuse of the
     familial trust which existed between the mother and the
     defendant [Ms. Wray], nor proof of a request from the
     defendant that the money be given to her.  The daughter [Ms.
     Wray] is a natural object of the deceased's bounty and a
     person who had, for many years, lived next door and taken care
     of the deceased's needs to a greater extent than the other
     children, who lived elsewhere.

The order does not address the request that the certificates of
deposit be reformed.  The burden of obtaining a ruling upon that
requested remedy was upon Ms. Nichols and Ms. Bell.  As the
Chancellor did not address it, and no objection was made to his
failure to address it, we cannot say he erred in not reforming the
instruments.  Barnes v. Pearson Termite and Pest Control, Inc., 266
Ark. 635, 587 S.W.2d 823 (1979).   
     We note in passing that the mistake urged as a basis for
reformation was allegedly between the bank and Ms. Sisco as to
whether a "local person" had to be named joint tenant.  We have not
seen a case in which a person who is not a party to a contract has
been allowed to obtain reformation of it.  It has been held that
one who is not a party may not obtain reformation.  Shelter Mut.
Ins. Co. v. LittleJim, 927 F.2d 1132 (10th Cir. 1991).  Cf. Hunt v.
Century Indem. Co., 192 A. 799 (R.I. 1937).
     Section 23-32-1005(1)(A) addresses instances in which "a
deposit has been made or a certificate of deposit purchased in the
names of two (2) or more persons and in form to be paid to any of
the persons so named, or the survivors of them.  It is followed by
subsection (2)(A) which states "the account or certificate of
deposit ... shall be the property of those persons as joint tenants
with right of survivorship," and then subsection (2)(C) which
provides, in pertinent part:

          (C) The opening of the account or the purchase of the
     certificate of deposit in this form shall be conclusive
     evidence in any action or proceeding to which ... the
     surviving party is a party of the intention of all of the
     parties to the account or certificate of deposit to vest title
     to the account or certificate of deposit, and the additions
     thereto, in such survivor.
     
     In the Hall case we were confronted with a dispute over joint
accounts held by a decedent and survivor in a bank and in a
brokerage firm.  There was strong evidence that the survivor's name
was on the accounts only to assist the decedent and that she
recognized her obligation to hold the proceeds for the
beneficiaries named in the decedent's will.  After pointing out
that "We have not previously addressed the underlying question of
whether in the absence of fraud, extrinsic evidence will be allowed
to reflect the intent of the parties in establishing joint accounts
with right of survivorship," we interpreted the statute as follows:

          We find that the language of Ark. Code Ann.  23-32-
     1005(2)(A) and (C) is clear; the opening of the account in the
     name of two or more persons designated as joint tenants or as
     joint tenants with right of survivorship "shall be conclusive
     evidence in any action or proceeding to which...the surviving
     party is a party of the intention of all of the parties to the
     account...to vest title to the account...in such survivor." 
     (Our emphasis.)  The first rule to be applied in statutory
     construction is to give the words in the statute their usual
     and ordinary meaning.  If there is no ambiguity we give a
     statute effect just as it reads. Pledger v. Ethyl Corp.,  299
     Ark. 100, 771 S.W.2d 24 (1989).
          The statute declares that the establishment of the 
     account as joint tenants provides conclusive evidence of the
     intention of all parties.  The signature card for the Superior
     Federal account provided that Dorothy Edwards and Virginia
     Hall held the account as joint tenants with right of
     survivorship.  Moreover, the signature card suffices to
     provide written designation to the bank that the account is
     held in joint tenancy.  Therefore, the trial court erred in
     considering extrinsic evidence as to Dorothy Edwards' intent,
     and the funds in the account belong to the appellant as
     surviving joint tenant.

     We held the statute did not apply to the account with the
brokerage firm because it is not a bank.  The evidence of intent
was admissible to show it was not the intention of the decedent to
make a gift of that account to the survivor, thus we upheld the
decision that the survivor was not the owner of the brokerage
account.
     The Chancellor's decision with respect to the certificates of
deposit is completely consistent with our decision in the Hall
case.  Ms. Nichols and Ms. Bell argue intent is irrelevant to the
question whether a constructive trust should be imposed, and that
is what we said in Edwards v. Edwards, 311 Ark. 339, 843 S.W.2d 846
(1992), the implication being that statement is inconsistent with
the Hall rationale.  We note, however, that our opinion in the Hall
case observed there had been no fraud.  We note also that the
Chancellor in this case found "no evidence of fraud, undue
influence or misrepresentation or any other abuse of the familial
trust."  In other words, he found no evidence that the intent of
Ms. Sisco as "conclusively" determined by the nature of the
certificates of deposit was induced by any impropriety on the part
of Ms. Wray.  Intent may indeed not matter when the issue is
whether there has been unjust enrichment and a constructive trust
is sought, but if there is no basis for establishment of that
restitutionary remedy, other than intent, then the statute
controls.
     We decline to overrule the Hall case.  Absent a constitutional
challenge to the statute, which we have not entertained as yet, we
are hardly in a position to change the language of the statute the
clear meaning of which we applied in the Hall case.  As Ms. Wray
points out, were it not for the statute, as interpreted, the issue
of whether a constructive trust should be imposed would arise
almost any time a person decided to make a gift of a bank account
to one of several siblings, simply on the basis of an argument that
no parent could intend to favor one over another.  We have cited
the Hall decision with approval several times, most notably in Nall
v. Duff, 305 Ark. 5, 805 S.W.2d 63 (1991), and the General Assembly
has met twice without taking any action with respect to the statute
since our decision in 1990 interpreting it to mean what it says. 
In these circumstances overruling would not be appropriate.  

                           2. The land
     In her cross-appeal, Ms. Wray argues we should reverse the
Chancellor's decision to impose a constructive trust on the last of
the four parcels of land that were transferred to her by her
mother.  The Chancellor imposed the trust because he found clear
and convincing evidence that Ms. Sisco's intention in making the
transfer was to divest herself of ownership to qualify for public
nursing home benefits.  Ms. Wray contends we should reverse the
Chancellor's decision because other evidence indicates that Ms.
Sisco's intent was to give her the property outright as recognition
for the care she had given over the years.  Ms. Wray argues that
the presence of this evidence means that "clear and convincing
evidence" to support the imposition of a constructive trust is
lacking.
     To impose a constructive trust, there must be full, clear, and
convincing evidence leaving no doubt with respect to the necessary
facts, Tillar v. Henry, 75 Ark. 446, 88 S.W. 573 (1905), and the
burden is especially great when a title to real estate is sought to
be overturned by parol evidence.  Nelson v. Wood, 199 Ark. 1019,
137 S.W.2d 929 (1940).  The test on review is not whether the court
is convinced that there is clear and convincing evidence to support
the chancellor's finding but whether it can say the chancellor's
finding that the disputed fact was proved by clear and convincing
evidence is clearly erroneous, and we defer to the superior
position of the chancellor to evaluate the evidence.  Brasel v.
Brasel, 313 Ark. 337, 854 S.W.2d 346 (1993); Wright v. Wright, 279
Ark. 35, 648 S.W.2d 473 (1983).  See also Davis v. Davis, 48 Ark.
App. 95, 890 S.W.2d 280 (1995).  A finding is clearly erroneous
when, although there is evidence to support it, the reviewing court
on the entire evidence is left with the definite and firm
conviction that a mistake has been committed.  RAD-Razorback Ltd.
Partnership v. B.G. Coney Co., 289 Ark. 550, 713 S.W.2d 462 (1986).
       We cannot say that the Chancellor was clearly erroneous in
his finding concerning Ms. Sisco's intent in conveying the last
parcel of land.  While there is testimony that indicates Ms. Sisco
stated she was glad for Ms. Wray to have the property because of
the care she had received from her over the years, there is ample
evidence that she intended her daughters to share equally in her
estate, and that her purpose for conveying the last parcel of land
was not to make a gift to Ms. Wray but to enable herself to receive
nursing home benefits.  
     Ms. Sisco's will provided her property should go in equal
shares to her three daughters.  Five disinterested witnesses,
including Ms. Sisco's three close friends and her two sisters,
testified that Ms. Sisco frequently stated she wanted her children
to share equally in her estate and she never stated that she wanted
to favor one of her daughters over the others.  Mary Alice Bell and
Patsy Nichols also testified their mother told them they would
share the estate equally with Ms. Wray.      
     The most compelling evidence of Ms. Sisco's intention for the
transfer can be found in Ms. Wray's own testimony, where she
admits, "My mother did not want the State to be able to take her
home, should I not be able to take care of her anymore.  And so, in
case she had to go to a nursing home, she did not want her home to
go to the State."  Ms. Wray also testified that although the deed
was actully executed in April 1994, her mother later "falsified"
the document by reexecuting the second page of the deed to show it
was signed on April 1, 1991.  The deed was filed for record on
April 20, 1994.  Ms. Wray stated that her mother decided to alter
the deed to make it appear to the State that the conveyance had
occurred some three years previous to its actual date.
     In light of the evidence that indictates Ms. Sisco's intention
for her daughters to share equally in her property, and Ms. Wray's
admission that the last conveyance was intended to protect the
property in the event her mother entered a nursing home, we cannot
say that we are left with "a definite and firm conviction" that the
Chancellor made a mistake by deciding to impose the constructive
trust.  
     Affirmed on appeal; affirmed on cross-appeal.
     Dudley, J., not participating.