Opinion ID: 1736657
Heading Depth: 2
Heading Rank: 3

Heading: The Hagler-Shirley Transfers

Text: As noted previously, the Hagler-Shirley Transfers included documents containing language concerning an attempted gift in trust to the Church. Moreover, these transfers were irrevocable, because the settlor did not expressly reserve the right to revoke the transfers in trust for the benefit of the Church. See Underwood v. Bank of Huntsville, 494 So.2d 619 (Ala. 1986); Restatement (Second) of Trusts § 330 (1959); Comment, The Law of Trusts in Alabama, 25 Ala.L.Rev. 467, 523-27 (1973). Thus, the attempted revocation in Item Two of the will, quoted at length above, is of no effect in determining the validity of these gifts in trust. If these inter vivos transfers are valid, then the fact that the subsequent testamentary devise fails is of no import in sustaining the prior inter vivos transfers. As the following analysis will show, we hold that these two transfers resulted in valid inter vivos transfers in trust for the benefit of the Church, and that the trial court was correct in establishing a trust in favor of the Church as to these proceeds. There is no doubt from the previously quoted language of these transfers that a transfer in trust was intended. The issues presented by these transfers concern the related matters of whether a present intent to convey an interest in the property was manifested by the language of the notes and mortgages, and whether such a transfer actually occurred. The problem arises because the decedent expressly provided that she was to receive the mortgage proceeds during her life and that, upon her death, the proceeds were to go in trust to the Church for the specified purpose of building maintenance. The defendants argue that the language to this effect manifests an intent to establish a trust in the future, and is therefore invalid, as was the case with the Tierce Transfer. We disagree. It is undisputed that mortgage proceeds may be held in trust, City Bank & Trust Co. v. Gardner, 225 Ala. 136, 142 So. 535 (1932); Hill v. Hill, 216 Ala. 435, 113 So. 306 (1927), and that such proceeds are considered to be personal property, City Bank & Trust Co., supra ; Hill, supra . Moreover, we have recognized that the reservation of a life estate in personalty does not serve to defeat a gift of the remainder interest in such personalty, so long as the gift of the remainder interest is reduced to a writing. Livingston v. Powell, 257 Ala. 38, 57 So.2d 521 (1952). In addition, Hill v. Hill, supra , recognizes by implication that a remainder interest in mortgage proceeds is permissible, and we also note that [i]t is lawful to give a present vested right to future enjoyment. Thus there may be a present gift of a future interest in a fund or in the balance of the fund remaining when the time for enjoyment arrives; and, it has been held, such a gift is valid even though the donor reserves the power to draw out the fund. A conveyance to one as life tenant with power to dispose of or consume is not inconsistent with a present valid gift of the remainder. 38 C.J.S. Gifts § 41, at 820-21 (1943). The language in the documents exchanged as a result of the Hagler-Shirley Transfers is consistent with the construction that the decedent intended a present transfer in trust of a remainder interest in the mortgage proceeds for the benefit of the Church, retaining to herself a life estate in the proceeds. The transfer of this remainder interest was irrevocable and tied to no particular contingency; it was thus not ambulatory or testamentary in nature, but represented an attempt to make a present and absolute gift in trust of the balance of the mortgage proceeds existing at the time of the testatrix's death. Accordingly, we hold that this transfer in trust does not fail for lack of a present intent to create a trust. Unlike the Tierce Transfer, in which the proceeds were explicitly to go to a trust which will be set-up in the future, the Hagler-Shirley Transfers represent present transfers in trust of a future interest in the mortgage proceeds. [6] The defendants also argue that the Hagler-Shirley Transfers failed because there was no effective delivery of the interest. We disagree. These attempted trusts sprang from gratuitous transfers to the Church trust fund. Therefore, the question of whether an effective delivery occurred must be answered by reference to the general law of gifts. In this regard, we have recognized that the evidence in support of the gift must be clear and convincing. DeMouy v. Jepson, 255 Ala. 337, 51 So.2d 506 (1951). We have also recognized, however, that the rule [requiring delivery in the case of a gratuitous transfer] has been relaxed as to personal property not capable of manual delivery. In such a case a symbolic delivery is held sufficient.... First Nat. Bank of Birmingham v. Hammel, 252 Ala. 624, 626, 42 So.2d 459, 460 (1949). We are concerned here not just with intangible personal propertychoses in action but with a future interest in that property, further incorporealizing the interest conveyed. That such an interest is incapable of actual manual delivery would appear to be beyond dispute. We think, therefore, that the specification in the notes and mortgages of the interest to be conveyed and the subsequent recordation of those mortgages is a sufficient symbolic or constructive transfer to satisfy the delivery requirement in this case. We regard the recordation of the mortgages as particularly persuasive that delivery occurred in this case, in view of the rule, long recognized in this state, that the recording of a deed by a grantor can often constitute sufficient delivery of the instrument to convey title, if that is the intention of the grantor. See Henslee v. Henslee, 263 Ala. 287, 82 So.2d 222 (1955); Gulf Red Cedar Lumber Co. v. Crenshaw, 169 Ala. 606, 53 So. 812 (1910). We also reject the defendant's contention that there was no valid transfer in trust of the mortgage proceeds, due to a lack of acceptance. Although acceptance by the donee of the gift is an essential requisite to consummation of a gratuitous transfer, we note that such acceptance may be implied or presumed in the absence of evidence of the donee's contrary intention, see Henslee, supra ; Gulf Red Cedar Lumber Co., supra ; R. Brown & W. Raushenbush, The Law of Personal Property 127-28 (1975); 38 Am.Jur.2d, Gifts § 96 (1968), and that acceptance is frequently presumed or implied in the transfer of notes, see Annot., Delivery of Bill or Note of Third Person by Way of Gift, 25 A.L.R. 642, 646 (1923). In view of these rules, and in view of the incorporeal nature of the future interest transferred in this case and the concommitant difficulty of manifesting its acceptance in the first place, we will imply acceptance by the donee on these facts, there being no manifestation of a contrary intent on the part of the donee. See also Watson v. Watson, 283 Ala. 214, 215 So.2d 290 (1968) (acceptance of trust is ordinarily presumed). In summary, we hold that the evidence in this case, considered in light of the applicable law and presumptions, establishes that a valid inter vivos trust was etablished in regard to the proceeds of the Hagler-Shirley Transfers, and that the gratuitous transfers giving rise to the trust are supported by clear and convincing evidence.