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Law School Case Brief

Unthank v. Rippstein - 386 S.W.2d 134 (Tex. 1964)

Rule:

The principal difference between a voluntary trust and a gift lies in the fact that in the case of a gift the thing given passes to the donee, while in the case of a voluntary trust the equitable or beneficial title passes to the trust. Absent a completed gift of the equitable title, no trust is created, for an imperfect gift will not be enforced as a trust merely because of its imperfection. A gift cannot be made to take effect in the future, for the reason that a promise to give is without consideration. Neither can the donor retain the right to use and enjoy the property during his lifetime and direct its disposition after his death in any manner other than by the making of a will.

Facts:

Shortly before his death, C.P. Craft wrote a letter to respondent Iva Rippstein, in which he acknowledged in the letter and in a notation in the margin that he would send her $200 monthly payments for a period of five years, even in the event of his death. Respondent first sought, unsuccessfully, to probate the writing as a codicil to Craft’s will. The Court of Civil Appeals held that the writing was not a testamentary instrument which was subject to probate. Subsequently, respondent filed the present suit against petitioners, the executors of the estate of Craft, for judgment in the amount of the monthly installments which had matured, and for declaratory judgment adjudicating the liability of the executors to pay future installments as they mature. The trial court granted the motion of the executors for summary judgment. The Court of Civil Appeals reversed and rendered judgment for respondent, holding that the writing in question established a voluntary trust under which Craft bound his property to the extent of the promised payments; and that upon his death his legal heirs held the legal title for the benefit of respondent to that portion of the estate required to make the promised monthly payments. On appeal, Respondent argued that the sole question was whether Craft's marginal notation constituted a declaration of trust whereby Craft agreed to hold his estate in trust for the explicit purpose of making the payments.

Issue:

Did decedent Craft’s letter, which included a marginal notation, to respondent beneficiary establish a voluntary trust under which Craft bound his property for the explicit purpose of making payments to respondent?

Answer:

No.

Conclusion:

The Court determined that the writing was insufficient to establish a voluntary trust, because a voluntary trust would have divested Craft of the exercise of further dominion. It was manifest that Craft did not expressly declare that all of his property, or any specific portion of the assets which he owned at such time, would constitute the corpus or res of a trust for the benefit of respondent; and inferences may not be drawn from the language used sufficient for a holding to such effect to rest in implication. According to the Court, the most that Craft did was to express an intention to make monthly gifts to respondent accompanied by an ineffectual attempt to bind his estate in futuro; the writing was no more than a promise to make similar gifts in the future and as such was unenforceable. The marginal notation did not purport to be a contract, or to embody a bilateral agreement between Craft and Mrs. Rippstein, or to be the result of a meeting of their minds, or to possess the element of mutuality of obligation. The promise to give cannot be tortured into a trust declaration under which Craft while living, and as trustee, and his estate after his death, were under a legally enforceable obligation to pay respondent the sum of $200 monthly for the five-year period. The Court thus affirmed the judgment of the trial court and reversed the appellate judgment.

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