Irvin v. Jones
310 Ark. 114, 832 S.W.2d 827, 1992 Ark. LEXIS 447 (1992)
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Rule of Law:
For a valid inter vivos gift to be legally effective, there must not only be a clear intent by the donor to make an immediate gift, but also an actual physical delivery of the property to the donee, through which the donor relinquishes all future dominion and control.
Facts:
- Bernice Jones used her own money to purchase seventeen $10,000 certificates of deposit (CDs), including three made payable to herself or one of the three Irvin brothers, respectively, as joint tenants with right of survivorship.
- The certificates stated on their face that they were 'not negotiable — not transferrable — not subject to check.'
- Jones retained sole and continuous physical possession of the three certificates in her safe deposit box from the time of purchase.
- The Irvin brothers never had possession of the certificates.
- At some point after the purchase of the CDs, the Irvin brothers' mother divorced Jones's nephew.
- Four years after purchasing them, Jones cashed the three certificates in question, collecting the principal and all accrued interest.
Procedural Posture:
- Kenny, Doug, and Mike Irvin filed a lawsuit for conversion against Bernice Jones in an Arkansas trial court.
- Jones filed a motion for summary judgment, arguing she never delivered the certificates.
- The trial court granted summary judgment in favor of Jones, ruling that there was no valid gift because the essential element of delivery was missing.
- The Irvin brothers, as appellants, appealed the trial court's grant of summary judgment to the Supreme Court of Arkansas.
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Issue:
Does the creation of a joint tenancy certificate of deposit, where the purchaser uses their own funds and retains sole physical possession of the certificate, constitute a valid inter vivos gift to the non-contributing joint tenant?
Opinions:
Majority - Justice Donald L. Corbin
No. The creation of a joint tenancy certificate of deposit does not constitute a valid inter vivos gift to the non-contributing party when the purchaser retains sole possession and has not delivered the certificate. The court reasoned that delivery is an indispensable element of an inter vivos gift. Citing a long line of precedent, including Hudson v. Bradley which involved nearly identical facts, the court emphasized that intent alone is insufficient; words and actions cannot substitute for the actual delivery of the gifted property. Since it was undisputed that Jones never delivered the certificates to the Irvin brothers and retained complete control over them, she did not relinquish dominion. Therefore, the gift was incomplete and legally invalid, and the Irvin brothers failed to prove an essential element of their claim.
Analysis:
This case reaffirms the strict, formalistic requirement of delivery for the creation of a valid inter vivos gift. It clarifies that financial instruments like certificates of deposit are not exempt from this rule, even when a joint tenancy is created on the face of the document. The decision solidifies the principle that titling an asset in joint names is insufficient to prove a gift if the donor retains exclusive possession and control, thereby preventing the donee from exercising any rights over the property. This provides a clear, predictable rule that prioritizes the donor's relinquishment of control over their expressed or perceived intent, impacting how gifts of this nature must be structured to be legally enforceable.
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