In the Estate of Wright, the court of appeals affirmed a trial court’s finding of an oral gift of real estate. No. 14-14-00401-CV, 2015 Tex. App. LEXIS 12644 (Tex. App.—Houston [14th Dist.] December 15, 2015, no pet. history). Stroman had assisted Wright for a long period of time. In the early 1990s, Wright purchased a house and rented it to Stroman. After two years of paying rent, Wright allegedly stated that it was enough and that the house was Stroman’s. Stroman then made improvements to the house. Later, Wright drafted a will leaving the house to Stroman. Subsequently, after a new friend (Tautenhahn) assisted Wright, a new will was drafted leaving everything to Tautenhahn and another person. After Wright’s death, Tautenhahn was appointed the executor of the estate. The parties litigated whether the most recent will was valid and also whether Wright had consummated an oral gift of the house to Stroman in the 1990s. The trial court found that the recent will was valid, but also found that Wright had made a binding oral gift and then awarded Stroman attorney’s fees for offering a prior will for probate.
The majority of court of appeals panel affirmed. The court first addressed whether the Dead Man’s Rule applied, such that evidence of Wright’s alleged statements to Stroman could be used to defend the trial court’s finding of an oral gift. The court held that Tautehahn did not object to all of the offered statements and that the unobjected to evidence was sufficient to waive the impact of the Dead Man’s Rule.
The court then addressed the oral gift claim. The court held that, generally, a conveyance of real property must be in writing and subscribed and delivered by the conveyor or his agent. The general rule, however, does not apply to a parol gift of real estate in equity. “To establish a valid parol gift of real estate in equity, a party must show: (1) a gift in praesenti, that is, a present gift; (2) possession under the gift by the donee with the donor’s consent; and (3) permanent and valuable improvements by the donee with the donor’s consent or other facts demonstrating that the donee would be defrauded if the gift were not enforced.” Id. Further, to be a present gift, the donor must, at the time he makes it, intend an immediate divestiture of the rights of ownership out of himself and a consequent immediate vesting of such rights in the donee.
The court of appeals held that the evidence of Wright’s intent to give the house to Stroman in the 1990s was sufficient to establish an oral gift: “the language Wright allegedly used, indicating the house was Stroman’s, as well as his actions in discontinuing offsets from Stroman’s paychecks, are clearly suggestive of an intention to bestow a present gift.” Id. at *17. The court rejected an argument that there was no present intent to make a gift because Wright’s prior will provided that Stroman would receive the house. The evidence supported “the finding that Wright intended to make a present gift to Stroman of equitable title to 105 Sweeney Street despite apparently also indicating that he would make provision in his will for the legal title in the property to be put in Stroman’s name.” Id. at * 18.
A dissenting justice would have reversed the trial court’s finding of a valid oral gift. She found dispositive that Wright had mentioned the future gift of the house to Stroman in the will: “Wright’s intention to include the Sweeney Street property in his will negates the intention to make an inter vivos gift of that property. Because a will is without legal effect until the time of the testator’s death, a statement that a testator intends to bequeath property in a will evinces only an intention to make the gift in the future. A gift by will is a future gift, not a present gift.” Id. at *34.