Flinspach v. Sears

AGEE, J. pro tem.* This is an action brought by a daughter to have a trust declared in certain real property and the proceeds of the sales of certain real property which had been deeded by a mother to her son. The trial court held than no trust had been created.

For many years, Sara Belle Sears had owned as her separate property some 137 acres of land located at Pacheco, California. In 1927, she mortgaged it to the Bank of Martinez for $4,400. The mortgage was renewed in 1932 for the same amount. Later on, the bank sued to foreclose, but on April 14, 1939, again renewed the mortgage in the amount of $5,428.24, and dismissed the suit. In April, 1940, the bank again threatened foreclosure. In order to avoid this, Sara Belle Sears and William A. Sears, Sr., her husband, executed a grant, bargain and sale deed of the property to their son, William A. Sears, Jr. The deed was dated April 22, 1940, and contained an agreement by the son to assume and pay the mortgage. The son accepted delivery of the deed and caused it to be recorded on April 25, 1940. The only consideration, other than love and affection, was the agreement to pay the mortgage. The son did in due course pay the mortgage in full, as well as all taxes and assessments. He went into possession and made substantial improvements on the property. In a letter from the son to his mother, dated April 19, 1940, he enclosed the form of deed to be signed by her and her husband and in the letter he stated: “Remember my agreement with you that when a sale is made, it is all yours.” Sara Belle Sears filed state and federal gift tax returns for the year 1940 in both of which she reported the transfer of the property as a gift and placed the gross value of the property as $8,965.40, the amount due on the mortgage as $5,428.24, and the net value of the gift as $3,537.16. William A. Sears, Sr., died on July 19, 1941, leaving his entire estate to his wife, Sara Belle, from which she received $1,200 in cash, $1,000 in stocks, an automobile and a note secured by a deed of trust on which there was due some $16,000. In 1944, she received $3,300 from another source. This is of significance because William Jr. had told his mother that she could have the property back any time by paying him what he had paid out. The mother never attempted to get the property back. On May 13, 1945, Sara Belle Sears died intestate, leaving as heirs, two sons, William A. Sears, Jr., and George Sears, her daughter, Emma [636]Pauline Sears Flinspach, appellant herein, and two grandsons, Richard Baird and Robert Baird, the children of a daughter who had predeceased her. Sara Belle Sears had made complete provision for disposition at her death of all of her properties. Her home at Porterville, California, was transferred to her daughter, appellant herein, by a deed of gift. Money, bonds and a note secured by a deed of trust went to the daughter as surviving joint tenant. After all expenses of last illness, taxes, and legal fees were paid the net value of what was received by the daughter was $21,740. The daughter was the one who took charge of all of her mother’s estate, she employed an attorney and executed the California Inheritance Tax Affidavit, Form 22, in which she stated that the decedent, Sara Belle Sears, did not execute or enter into a declaration of trust or trust agreement and that decedent was not a beneficiary under a trust. The daughter testified that she saw and read William’s letter of April 19, 1940, to his mother at the time it was received by her.