Bishop v. Bishop

Sandra Kay BISHOP v. James R. BISHOP

CA 97-23                                           ___ S.W.2d ___

                  Court of Appeals of Arkansas
                           Division II
               Opinion delivered January 28, 1998


1.   Gifts -- inter vivos gift -- requirements for. -- The
     requirements for an effective inter vivos gift are an actual
     delivery of the subject matter of the gift to the donee with
     a clear intent to make an immediate, unconditional, and final
     gift beyond recall, accompanied by an unconditional release by
     the donor of all future dominion and control over the property
     so delivered; these elements must be established by clear and
     convincing proof for an inter vivos gift to be sustained;
     clear and convincing evidence is evidence by a credible
     witness whose memory of the facts about which he testifies is
     distinct, whose narration of the details is exact and in due
     order, and whose testimony is so direct, weighty, and
     convincing as to enable the fact-finder to come to a clear
     conviction, without hesitance, of the truth of the facts
     related.

2.   Appeal & error -- standard of review -- when finding is
     clearly erroneous. -- The appellate court's test on review is
     not whether it is convinced that there was clear and
     convincing evidence to support the trial judge's finding but
     whether it can say that the finding is clearly erroneous; a
     requirement that the evidence be clear and convincing does not
     mean that the evidence must be uncontradicted; even where the
     burden of proof is by clear and convincing evidence, 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 is left with the definite and firm conviction
     that a mistake has been committed. 

3.   Gifts -- delivery of -- decisive factor. -- The gravamen of
     delivery is a showing of an act or acts on the part of the
     putative donor displaying an intention or purpose to part with
     dominion over the object of the gift and to confer it on some
     other person; intention to give, by itself, is not sufficient;
     there must be a delivery to consummate the gift and to pass
     title; the decisive factor is whether the putative donor has
     the power to reclaim the property; although the rule with
     respect to delivery of gifts is less strictly applied to
     transactions between members of a family, delivery must occur
     for a gift to be effective. 

4.   Gifts -- certificate of deposit may be inter vivos gift --
     requirements of intent and delivery also apply. -- A
     certificate of deposit may be the subject of a gift inter
     vivos; a promissory note, or any chose in action or other
     evidence of debt may be the subject of a gift inter vivos; a
     certificate of deposit falls into this category; the
     requirements of intent and delivery apply to an inter vivos
     gift of a certificate of deposit; to constitute a valid gift
     of a certificate of deposit, there must be an intent by the
     donor that title pass immediately and a delivery of the
     certificate.  

5.   Gifts -- chancellor's finding that parties made gift of CD to
     son not clearly erroneous. -- The chancellor's finding that
     the parties made a gift of the CD account to their son was not
     clearly erroneous where the account was established in the
     son's name, using his social security number, where the son
     paid taxes on the account's earnings, and where there was
     evidence that the delivery of the account was completed in
     January 1995, when the son cashed it; the chancellor did not
     err in refusing to charge off an amount equal to half of this
     account against appellee's property.

6.   Contracts -- settlement agreement binding -- cases appellant
     cited to support rescission inapplicable. -- Where the cases
     cited by appellant concerned rescission based on the discovery
     of a mistake prior to formal acceptance of a bid, but
     appellant's attempt to set aside the settlement agreement
     arose after appellant and appellee entered into a binding
     contract, the appellate court found the cited cases to be
     distinguishable and not applicable to the facts at hand; when
     a stipulation dictated into open court covers all the rights
     and liabilities of the parties in a total and complete
     agreement, it will have the full force and effect of a binding
     agreement, and it will not be modifiable.  


7.   Contracts -- rescission of contractual stipulation --
     rescission generally not allowed for unilateral mistakes. --
     A contractual stipulation can only be withdrawn on grounds for
     nullifying a contract, i.e., fraud or misrepresentation; the
     generally accepted rule is that rescission cannot be enforced
     or ordered on account of unilateral mistake unless some
     special ground for the interference of a court of equity is
     shown; there can be no rescission on account of the mistake of
     one party only, where the other party was not guilty of any
     fraud, concealment, undue influence, or bad faith, did not
     induce or encourage the mistake, and will not derive any
     unconscionable advantage from the enforcement of the contract;
     the fact that appellant entered into an agreement that later
     appeared improvident to her is no ground for relief.  

8.   Appeal & error -- chancery cases reviewed de novo on appeal --
     appellate court defers to chancellor's superior opportunity to
     assess credibility. -- Chancery cases are reviewed de novo on
     appeal, and the appellate court will not disturb the
     chancellor's findings unless they are clearly erroneous or
     clearly against the preponderance of the evidence; because the
     question of the preponderance of the evidence turns largely on
     the credibility of the witnesses, the appellate court will
     defer to the chancellor's superior opportunity to assess
     credibility. 

9.   Appeal & error -- chancellors' findings not clearly erroneous
     -- decision affirmed. -- Where the chancellor heard the
     testimony and found appellant's former attorney to be more
     credible than appellant and her father, the chancellor's
     findings were not clearly erroneous in light of the testimony
     and proof; the appellate court could not say that the
     chancellor erred in refusing to set aside the settlement
     agreement due to appellant's unilateral mistake. 
     

     Appeal from Jefferson Chancery Court; Fred D. Davis,
Chancellor; affirmed.
     Anne Orsi Smith, for appellant.
     Ramsay, Bridgforth, Harrelson & Starling, by:  Rosalind M.
Mouser, for appellee.

     D. Franklin Arey, III, Judge
     This is a divorce case.  Sandra Bishop appeals from the
Jefferson County Chancery Courtþs decree finding that a certificate
of deposit account amounting to approximately $37,000 did not
belong to the parties because it had been given to their son, and
from the denial of her motion to set aside the partiesþ property
settlement agreement.  We find no error and affirm.
     After almost thirty years of marriage, the parties separated
in January 1995.  Later that year the appellee, James Bishop, filed
for divorce.  The partiesþ only child, J.R. þRickyþ Bishop, Jr.,
was an adult at the time of the divorce.  Appellee worked for
International Paper Company for the entire length of the marriage
and acquired rights to a retirement pension there.  Appellant did
not work during the marriage.  The parties owned, among other
assets, a home on which there was no debt and several bank
accounts.  
     One of these accounts was a certificate of deposit account
held in the names of Ricky Bishop and appellee, under Rickyþs
social security number.  This account was set up when Ricky was
fourteen and was funded by the parties.  Even though Ricky paid
taxes on the earnings from this account, it is undisputed that the
parties reimbursed him.  The sole withdrawal from the CD account
occurred in 1987 when the parties purchased a van.  Appellee was
the only person who monitored the activity in this account.  The
bank statements from this account came to the partiesþ residence
until appellee changed the address to a post office box at a time
when the parties were having marital difficulties.  Appellee later
changed the address back to that of the partiesþ residence, but
changed it to Rickyþs address when it became apparent to appellee
that divorce was imminent. 
     At trial, appellant contended that the certificate of deposit
account belonged to the parties and that she was entitled to have
her half of this account charged off against appelleeþs portion of
the marital assets.  Appellant testified that the parties had
simply placed the money into an account in their sonþs name to
lessen their tax burden, and that appellee kept control of this
account throughout their marriage.  She contended that appellee
decided to give this money to Ricky because the parties were
separated and because appellee, who was living with Ricky at the
time, wanted to conceal this asset from her. 
     Appellee responded that these funds were no longer marital
property because a valid inter vivos gift had been completed to
Ricky.  Appellee testified that on January 5, 1995, Ricky cashed in
the CD account in his presence and deposited the money into a new
account at Simmons Bank in Rickyþs name.  He stated that his
(appelleeþs) name is on the account only as the designated
beneficiary in the event of Rickyþs death.  Ricky admitted at trial
that he had never accessed the CD account until January 1995.  He
also testified that, although appellee is listed as a beneficiary,
he is not an owner of the new account.
     At trial, the parties agreed upon every issue except the
ownership of the CD account and entered into a stipulated property
settlement agreement, which was read into the record.  At the
conclusion of the reading of the stipulation, appellantþs attorney
asked appellant if there was anything that they had not covered. 
Appellant affirmed that she had no further questions, agreed to the
stipulation, and wanted the court to approve it.  Appellee likewise
stated that he understood the stipulation and agreed to it.
     Before the divorce decree was entered, appellant filed a
motion to set aside the property settlement agreement on the ground
that she had been misinformed as to the retirement benefits to
which she was entitled.  At the hearing on the motion to set aside
the agreement, appellant testified that her attorney had
erroneously informed her that, if appellee did not survive,
appellant would not receive anything from his pension plan. 
Appellant contended that she had opted to accept the house instead
of any interest in appelleeþs retirement plan in reliance upon her
attorneyþs incorrect advice.  Appellantþs father corroborated
appellantþs testimony. 
     Appellantþs former attorney testified that, as a package deal,
appellant had agreed to give up any interest in appelleeþs
retirement account in order to receive the marital residence.  He
stated that he had informed appellant that her interest in
appelleeþs retirement account would terminate if Mr. Bishop died
first and a joint and survivor benefit had not been designated.  He
stated that he told her that if a joint and survivor election was
made, there would be a reduction in the monthly benefit, but he was
not sure how appelleeþs death would affect it.  He stated that they
had gone over this subject for quite some time and in more than one
discussion, and that Mrs. Bishop had made her decision in
consultation with several members of her family.  He stated that he
had been uncertain about the effect appelleeþs death would have on
appellantþs benefits, and that this was taken into consideration
when she decided to keep the house in lieu of an interest in
appelleeþs retirement plan.
     At the conclusion of the hearing, the chancellor stated that
appellant had offered no credible proof that she received any
inaccurate information from her former attorney.  He found that the
agreement was fair and equitable and held that he would enforce it. 
The chancellor then entered the divorce decree in which he found
that the CD account did not belong to the parties and entered an
order denying appellantþs motion to set aside the property
settlement agreement.  
     In her first point on appeal, appellant argues that the
evidence does not support the chancellorþs finding that appellee
made an inter vivos gift of the CD account to Ricky.  The
requirements for an effective inter vivos gift are:  an actual
delivery of the subject matter of the gift to the donee with a
clear intent to make an immediate, unconditional, and final gift
beyond recall, accompanied by an unconditional release by the donor
of all future dominion and control over the property so delivered. 
Chalmers v. Chalmers, 327 Ark. 141, 937 S.W.2d 171 (1997).  These
elements must be established by clear and convincing proof in order
for an inter vivos gift to be sustained.  Jamison v. Estate of
Goodlett, 56 Ark. App. 71, 938 S.W.2d 865 (1997).  Clear and
convincing evidence is evidence by a credible witness whose memory
of the facts about which he testifies is distinct, whose narration
of the details is exact and in due order, and whose testimony is so
direct, weighty, and convincing as to enable the fact-finder to
come to a clear conviction, without hesitance, of the truth of the
facts related.  First Natþl Bank v. Rush, 30 Ark. App. 272, 785 S.W.2d 474 (1990).  This courtþs test on review is not whether it
is convinced that there was clear and convincing evidence to
support the trial judgeþs finding but whether it can say that the
finding is clearly erroneous.  Id.  A requirement that the evidence
be clear and convincing does not mean that the evidence must be
uncontradicted.  OþFlarity v. OþFlarity, 42 Ark. App. 5, 852 S.W.2d 150 (1993).  Even where the burden of proof is by clear and
convincing evidence, this court defers to the superior position of
the chancellor to evaluate the evidence.  Id.  A finding is clearly
erroneous when, although there is evidence to support it, the
reviewing court is left with the definite and firm conviction that
a mistake has been committed.  Nichols v.  Wray, 325 Ark. 326, 925 S.W.2d 785 (1996).  
     The gravamen of delivery is a showing of an act or acts on the
part of the putative donor displaying an intention or purpose to
part with dominion over the object of the gift and to confer it on
some other person.  Chalmers v. Chalmers, supra.  Intention to
give, by itself, is not sufficient; there must be a delivery to
consummate the gift and to pass title.  Id.  The decisive factor is
whether the putative donor has the power to reclaim the property. 
Id.  Accord Swaffar v. Swaffar, 327 Ark. 235, 938 S.W.2d 552
(1997); Gibson v. Boling, 274 Ark. 53, 622 S.W.2d 180 (1981);
Hudson v. Bradley, 176 Ark. 853, 4 S.W.2d 534 (1928).  Although the
rule with respect to delivery of gifts is less strictly applied to
transactions between members of a family, delivery must occur for
a gift to be effective.   Chalmers v. Chalmers, supra.  
          There can be no doubt that a certificate of deposit
     may be the subject of a gift inter vivos.  We have stated
     that a promissory note, or any chose in action or other
     evidence of debt, may be the subject of a gift inter
     vivos and that a certificate of deposit falls into this
     category.  Boling v. Gibson, 266 Ark. 310, 584 S.W.2d 14
     (1979).  Likewise, there can be no doubt that the
     requirements of intent and delivery apply to an inter
     vivos gift of a certificate of deposit.  We have also
     stated that in order to constitute a valid gift of a
     certificate of deposit, there must be an intent by the
     donor that title pass immediately, and a delivery of the
     certificate.  Id.

Irvin v. Jones, 310 Ark. 114, 118, 832 S.W.2d 827, 828-29 (1992).

     We cannot say that the chancellorþs finding that the parties
made a gift of the CD account to Ricky is clearly erroneous.  The
account was established in Rickyþs name, using his social security
number.  Ricky paid taxes on the accountþs earnings, which further
indicates his parentsþ intent to give the funds to him.  There is
evidence that the delivery of this account was completed in January
1995 when Ricky cashed it.  We cannot say that the chancellor erred
in refusing to charge off an amount equal to half of this account
against appelleeþs property.
     In her second point on appeal, appellant argues that the
chancellor erred in refusing to set aside the property settlement
agreement due to her unilateral mistake.  Citing Mountain Home
School District No. 9 v. T.M.J. Builders, Inc., 313 Ark. 661, 858 S.W.2d 74 (1993), appellant claims that she is entitled to
rescission or reformation of the agreement due to her unilateral
mistake.  The conditions essential for obtaining rescission due to
a unilateral mistake were set forth in that case as follows: 
(1) the mistake must be of so great a consequence that to enforce
the contract as actually made would be unconscionable; (2) the
matter as to which the mistake was made must relate to a material
feature of the contract; (3) the mistake must have occurred
notwithstanding the exercise of reasonable care by the party making
the mistake; and (4) the party seeking it must be able to get
relief by way of rescission without serious prejudice to the other
party, except for the loss of his bargain. 
     The rule applied in T.M.J. Builders originates from State ex
rel. Arkansas State Highway Commission v. Ottinger, 232 Ark. 35,
334 S.W.2d 694 (1960).  In both cases a contractor discovered a
mistake in its bid prior to formal acceptance of the bid.  In
Ottinger, our supreme court stressed the contractorþs attempt to
withdraw its bid þbefore any award of the contract and within a
matter of hours after the bids were opened....þ  Ottinger, 232 Ark.
at 37, 334 S.W.2d  at 695.  No other bids had been rejected.  Id. 
In both cases, the other party did not recognize the withdrawal,
and formally accepted the bid.  In Ottinger, the chancellor found
that the contractor had proven his entitlement to rescission, and
the supreme court affirmed; in T.M.J. Builders, the chancellor
found that the contractor had not proven entitlement to rescission,
and the supreme court affirmed.
     The case before us differs from Ottinger and T.M.J. Builders. 
It does not involve an attempt to withdraw a bid prior to its
acceptance.  Instead, appellantþs attempt to set aside the
settlement agreement arose after appellant and appellee entered
into a binding contract.  þ[W]hen a stipulation dictated into open
court covers all the rights and liabilities of the parties in a
total and complete agreement, it will have the full force and
effect of a binding agreement, and it will not be modifiable.þ 
Kunz v. Jarnigan, 25 Ark. App. 221, 224, 756 S.W.2d 913, 915 (1988)
(citing Linehan v. Linehan, 8 Ark. App. 177, 649 S.W.2d 837
(1983)).  Thus, we find Ottinger and T.M.J. Builders
distinguishable, and not applicable to the facts at hand.
     A contractual stipulation can only be withdrawn on grounds for
nullifying a contract, i.e., fraud or misrepresentation.  See
Linehan, supra.  The generally accepted rule is that rescission
cannot be enforced or ordered on account of unilateral mistake
unless some special ground for the interference of a court of
equity is shown.  There can be no rescission on account of the
mistake of one party only, where the other party was not guilty of
any fraud, concealment, undue influence, or bad faith, and did not
induce or encourage the mistake, and will not derive any
unconscionable advantage from the enforcement of the contract. 
Lowell Perkins Agency, Inc. v. Jacobs, 250 Ark. 952, 469 S.W.2d 89
(1971).  The fact that appellant entered into an agreement which
later appeared improvident to her is no ground for relief.  Helms
v. Helms, 317 Ark. 143, 875 S.W.2d 849 (1994).
     Chancery cases are reviewed de novo on appeal, and the
appellate court will not disturb the chancellor's findings unless
they are clearly erroneous or clearly against the preponderance of
the evidence.  Jones v. Jones, 43 Ark. App. 7, 858 S.W.2d 130
(1993).  Because the question of the preponderance of the evidence
turns largely on the credibility of the witnesses, the appellate
court will defer to the chancellor's superior opportunity to assess
credibility.  Id.
     The chancellor heard the testimony and found appellantþs
former attorney to be more credible than appellant and her father. 
The chancellorþs findings are not clearly erroneous in light of the
testimony and proof summarized above.  We therefore cannot say that
the chancellor erred in refusing to set aside the settlement
agreement due to appellantþs unilateral mistake. 
     Affirmed.
     Jennings and Stroud, JJ., agree.