Rooney v. Rooney

Annotate this Case

                                 ENTRY ORDER

                       SUPREME COURT DOCKET NO. 90-295

                             DECEMBER TERM, 1991

 Nancy Rooney, Administratrix      }          APPEALED FROM:
 of the Estate of Thomas Rooney    }
      v.                           }          Lamoille Superior Court
 David Rooney                      }
                                   }          DOCKET NO. S50-88LaC

              In the above entitled cause the Clerk will enter:

      Defendant appeals a judgment that defendant pay plaintiff's estate
 fifty percent of the value of farm real estate formerly owned as joint
 tenants by Thomas and David Rooney.  We reverse.

      The facts are undisputed.  Hubert Rooney and his wife Katherine farmed
 in Morristown, Vermont, for many years.  In 1968, Hubert, father of Thomas
 and David Rooney, died leaving his widow sole owner of the farm.  Thomas and
 David had gradually taken over operation of the farm as their father's
 health deteriorated.  In 1971, Katherine transferred ownership of the farm
 into joint tenancy between herself and her two sons.  At that time, an acre
 lot was deeded outright to David and his wife Charlene, where they built
 their home.  Thomas was single then and lived with his mother at the
 homestead on the farm.  In 1980, Katherine died.

      Until Katherine's death, the farm was operated informally by the sons
 and their mother.  All expenses, personal and business, were paid from farm
 income.  Substantial improvements were made, including new barns and a tool
 shed.  In 1977, the brothers purchased as joint tenants an adjacent farm,
 consisting of 150 acres and a house, where Thomas began to live.  A sugar
 house and garage were built there.  In 1979, Thomas married Nancy.  After
 Katherine's death, David and Charlene moved into the house on the home farm
 and rented their former home.  In 1987, Thomas died in a farming accident
 leaving Nancy and three children as the sole heirs of his intestate estate.

      Throughout, all expenses for all properties continued to be paid out of
 farm income.  David and Thomas did business as a partnership and filed
 federal partnership income tax returns.

      From the beginning, the brothers believed what had been explained to
 them by their lawyer, that the farm would pass to the survivors in the
 joint tenancy.  Thomas expressed this belief on a number of occasions and
 even purchased life insurance on his life in the face amount of $120,000 so
 that Nancy would be able to provide for a place to live because the house on
 the farm would not pass to her.  From time to time suggestions were made by
 various family members, including David, to place parts of the farm property
 in separate ownership. Thomas consistently was unwilling to do that, wanting
 to keep the entire farm intact.  Shortly before his death, however, Thomas
 expressed to Nancy that the partnership should be dissolved and separate
 farms created.  This suggestion was made to David by Thomas on one occasion,
 but neither pursued it.

      In 1987, Nancy was appointed administrator of Thomas's estate and
 requested an accounting of the partnership from David and one-half of the
 partnership interest.  While David agreed to pay nearly $70,000 as the
 estate's interest in the farm's personal property, he maintained the real
 estate became his by virtue of the joint tenancy.

      The trial court held that the brothers' conduct in operating the farm
 created a partnership which was sufficient evidence under the circumstances
 to find that the partners intended that ownership of the real estate be
 converted from a joint tenancy to partnership ownership, one-half going to
 the surviving partner upon death of the other partner.

      We agree with the trial court that the brothers were equal partners in
 operating, maintaining and making improvements on the entire farm property.
 The court recognized that the brothers appreciated the significance of being
 joint tenants in ownership of all the real estate, except the small lot
 deeded to David.  Nevertheless, the court concluded that the actual belief
 was not controlling, and by conducting their affairs as partners, the legal
 effect of joint tenancy was per se dissipated.  The critical findings of
 fact on the brothers' state of mind about ownership of the real estate in
 question was stated by the trial court as follows:

             The evidence does show clearly that Thomas and David
           believed that the property continued to be owned by
           themselves as joint tenants. . . .  However, the fact
           that they held this belief is hardly dispositive of
           their intent.  All objective manifestations of their
           intent show that they intended the real estate to be
           partnership property.

      While "objective manifestations" demonstrate the brothers intended to
 use the real estate in the partnership business, the only objective view of
 their intent with regard to the ownership of the real estate was their ack-
 nowledgement that it existed in joint tenancy, with full knowledge that the
 surviving brother would acquire the real estate.

      We appreciate that the evidence suggests that the brothers were moving
 toward rearranging ownership of the real estate, but we know of no law
 which supports a conclusion that the mere planning to convert one form of
 ownership of real estate to another is tantamount to conversion.  Here, the
 planning stage consisted only of exploratory suggestions by the brothers to
 change ownership of the farm.  No significant steps toward accomplishment
 of the vaguely expressed goals were undertaken, however.

      Contrary to the analysis used by the trial court, real estate not in
 partnership title is not a partnership asset unless there is a clear
 manifestation of intent that it was meant to be partnership property.
 Reuschlein & Gregory, Hornbook on the Law of Agency and
 Partnership, Ch. 18, {212 at 323 (1979).  Mere use or occupancy by the
 partners in and of itself does not convert real estate into partnership
 property.  See id. {215 at 326.

      The findings established that the brothers intended that the
 property be owned by themselves as joint tenants, but the court went farther
 and concluded that they intended the real estate to be partnership property.
 When the findings do not support the court's conclusion, it cannot stand.
 See, e.g., Krupp v. Krupp, 126 Vt. 511, 515, 236 A.2d 653 (1967).


 Do Not Publish.

                                    BY THE COURT:

                                    Frederic W. Allen, Chief Justice

 [ ]  Publish                       Ernest W. Gibson III, Associate Justice

 [ ]  Do Not Publish
                                    John A. Dooley, Associate Justice

                                    James L. Morse, Associate Justice

                                    Denise R. Johnson, Associate Justice