Court Opinion

ID: 9619609
Source: CourtListenerOpinion
Date Created: 2023-08-22 05:30:13.732423+00
Date Added: 2024-06-11T18:04:42.770519
License: Public Domain

Hall, Justice,
dissenting as to Division 1.
Code Ann. § 108-116 provides that "[a]s between husband and wife,.. payment of purchase money by one, and causing the conveyance to be made to the other, shall be presumed to be a gift, but a resulting trust in favor of the one paying the money may be shown and the presumption rebutted.” In Adderholt v. Adderholt, 240 Ga. 626(2) (242 SE2d 11) (1978), a majority of this court chose to follow a line of Georgia cases represented by Scales v. Scales, 235 Ga. 509 (220 SE2d 267) (1975) and Williams v. Thomas, 200 Ga. 767 (38 SE2d 603) (1946). That line of authority holds that in order to rebut the presumption of gift and establish a resulting trust under Code Ann. § 108-116, evidence showing an agreement between the parties to create a trust at the time of the conveyance is required.
I dissented in Adderholt v. Adderholt, supra, because I believed its view too narrow and restrictive. The view of other jurisdictions and other Georgia cases focuses the inquiry on the intent of the payor. Ashbaugh v. Ashbaugh, 222 Ga. 811 (152 SE2d 888) (1966). The Restatement, Trusts 2d, also makes the intent of the payor to make a gift or create a trust the crucial issue and provides, "where one person pays the purchase price for property which is transferred at his direction to another who is the natural object of his bounty, parol evidence is *768admissible to show that the payor intended that the transferee should not have the beneficial interest in the property... The intention of the payor not to make a gift to the transferee may be shown not only by oral declarations of his intention, but also by the circumstances under which the transfer is made"1(Emphasis supplied.) Restatement, Trusts 2d, § 443 (1959).
Thus the intention of the payor is the relevant inquiry, and both oral declarations and the circumstances surrounding the transfer may show the payor’s intention. An agreement, either express or implied, between payor and donee to create a trust is not required. The donee’s intention to receive a gift or hold the property in trust is relevant only because it may reflect the payor’s intention. Insofar as Adderholt made the donee’s agreement the crucial issue, this court erred. When a purchaser supplies the funds for a transaction, donative intent must be present before a gift and not a resulting trust exists. Code Ann. § 48-101; Ashbaugh v. Ashbaugh, 222 Ga. 811, supra. Code Ann § 108-116 presumes that the intention exists to make a gift, but the payor should be allowed to rebut the presumption by proof that his intention was to retain the beneficial interest.
The type of proof which demonstrates the intention of the payor has been collected by one treatise writer. "The *769intention that the grantee should not have the beneficial interest in the property may appear from the circumstances at the time of the purchase or it may appear from the subsequent conduct of the parties. The intention not to make a gift may appear from the conduct of the payor in exercising dominion over the property, his collection of the rents, payment for improvements, payment of insurance premiums and taxes. It may appear from words or conduct of the grantee indicating that he understood that the payor was the beneficial owner of the property. It may be shown that the parties orally agreed at the time of the purchase that the grantee was to hold the property for the payor.” Scott, Law of Trusts, § 443, p. 3345 (3d Ed.). See Bogert, Trusts and Trustees, §§ 459, 460 (2d Ed. revd. 1977).
As Professor Scott points out, the type of trust sought to be enforced in this kind of case is a resulting trust which arises when one party furnishes the purchase price and title is taken in another party. Requiring an agreement between the parties is not only too restrictive but confuses express trusts with resulting trusts. Scott, supra, p. 3040.
In Talmadge v. Talmadge, 241 Ga. 609 (2) (247 SE2d 61) (1978), this court retreated from the Adderholt requirement that an express agreement between the parties to create a resulting trust was required. Instead, the court found evidence from which an agreement between the parties to create a trust could be implied. The court thus upheld a jury’s special verdict that an agreement or understanding existed between the parties that the transferee would hold the stock in trust for the payor against the transferee’s claim that the trial court should have directed a verdict in her favor. I joined in this opinion because a directed verdict in favor of the supposed donee is improper when the record contains evidence that the payor has not intended to make a gift of the property. The issue of the payor’s intent to make a gift in the Talmadge case should have been and was submitted to the jury.
In this case, the majority finds no evidence of an express agreement between the parties to create a trust and no evidence from which such an agreement could be implied. Thus, the majority holds that the trial court *770properly directed a verdict in favor of the wife/donee. I dissent under my view that the trial court should have submitted the issue to the jury and instructed them to find the intent of the payor at the time of the conveyance from declarations of his intention, the circumstances of the transfer, and subsequent conduct of the parties.
I am authorized to state that Chief Justice Nichols joins in this dissent.

Other jurisdictions which, like the Restatement, permit evidence of the payor’s intent to rebut the presumption of gift include Illinois, Nolan v. American Tel. & Tel. Co., 326 Ill. App. 328 (61 NE2d 876) (1945); Massachusetts, Krasner v. Krasner, 362 Mass. 186 (285 NE2d 398) (1972); Missouri, Davis v. Broughton, 369 SW2d 857 (Mo. App. 1963); New Hampshire, Foley v. Foley, 90 N. H. 281 (7 A2d 396) (1939); Pennsylvania, Hughes v. Bailey, 202 Pa. Super. 263 (195 A2d 281) (1963). See generally Restatement, Trusts 2d, Appendix, §§ 442, 443, pp. 690-696 (1959) and Restatement in the Courts. In my research, I have found no other jurisdiction which requires evidence of an agreement between the parties, express or implied, to rebut the presumption of gift.