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Toman v. Svoboda

OPINION FILED JUNE 4, 1976.

ADELINE TOMAN, PLAINTIFF-APPELLEE,

v.

LIBBIE SVOBODA, DEFENDANT-APPELLANT.



APPEAL from the Circuit Court of Cook County; the Hon. SAMUEL B. EPSTEIN, Judge, presiding.

MR. JUSTICE HAYES DELIVERED THE OPINION OF THE COURT:

The instant action is a complaint by plaintiff, as the sole heir of all the personal property of her intestate deceased husband, to impose a constructive trust upon shares of stock, the legal title to which is in defendant as the surviving joint tenant of a joint tenancy created by the decedent between himself and defendant during decedent's marriage to plaintiff. After trial, a judgment was entered in favor of plaintiff, and defendant appeals.

The essential facts are as follows. Plaintiff, Adeline B. Toman, and decedent, Edward Toman, were married in December of 1946 and remained married until decedent's death in 1967. Prior to his marriage to plaintiff, decedent owned only an insignificant number of shares of stock. During the course of the marriage and from his earnings, he acquired 27 shares of common stock of American Telephone and Telegraph Company (AT&T), 68 shares of common stock of Great Falls Gas Company (Great Falls), and 185 shares of common stock of North Shore Gas Company (North Shore). These securities were held by decedent in his own name.

In July of 1956, decedent transferred the 27 shares of AT&T to Barbara Toman (his mother), defendant Libbie Svoboda (his sister), and himself as joint tenants with right of survivorship. In October of 1956, a new subscription for three shares of AT&T was registered to decedent and defendant in joint tenancy with right of survivorship. In August of 1956, the Great Falls stock was transferred on the corporate books to decedent, defendant, and their mother in joint tenancy with right of survivorship. In October of 1956, the North Shore stock was transferred on the corporate books to decedent, defendant, and their mother as joint tenants with right of survivorship. Ultimately, the North Shore stock was exchanged for stock in Peoples Gas Company and, by virtue of stock splits, grew to number 262 shares in the latter company.

In 1957, decedent's mother died. The shares of stock mentioned above were then transferred on the respective corporate books to decedent and defendant as joint tenants with right of survivorship. Subsequently, decedent and defendant as joint tenants with right of survivorship came to hold an additional 14 shares of AT&T (11 shares by virtue of subscriptions and 3 shares by virtue of a bond conversion). Owing to stock splits in AT&T, decedent and defendant ultimately came to own 220 shares of common stock in AT&T as joint tenants with right of survivorship.

In 1967, decedent died intestate, survived by plaintiff and defendant as his only heirs. Apparently, at the time of his death, the only substantial assets owned by decedent were his interest, as a joint tenant with defendant, in the above-mentioned shares of stock (which shares then had a value of about $20,000) and his interest, as a joint tenant with plaintiff, in their marital home.

In her complaint, plaintiff alleges that decedent during his lifetime represented to her that the shares of stock were part of his estate and would pass to plaintiff by inheritance at his death; that, during decedent's lifetime, all dividends derived from the stock were received by decedent and used by him as his own property; and that decedent had transferred the stock into joint tenancy with his mother and sister, and later with his sister, for the sole purpose of defeating plaintiff's statutory marital right in the stock. Plaintiff therefore prayed for the imposition of a constructive trust upon all the shares of stock, legal title to which had passed to defendant by operation of law upon the death of decedent. *fn1

After defendant had filed her answer, the cause came before the Honorable Charles R. Barrett on cross-motions for summary judgment. Judge Barrett, after a finding that there was no evidence of any fraud on plaintiff's statutory marital right, granted defendant's motion for summary judgment. On appeal, this court reversed and remanded (Toman v. Svoboda (1972), 4 Ill. App.3d 148, 280 N.E.2d 499) for the reason that a genuine question of fact existed as to whether decedent's transfers of the shares of stock into joint tenancy with right of survivorship had been made with the intent to defraud plaintiff of her statutory marital right.

At the trial on remand, a great deal of testimony was adduced by plaintiff relative to the secretive manner in which decedent had effected the transfer of the shares into joint tenancy with his mother and sister, and later with his sister. Defendant, on her part, introduced evidence intended to prove that she had contributed some consideration for the transfer, but the trial court found that she was a mere donee. In entering judgment for plaintiff, the trial court found that the transfers constituted "a fraud in law" on plaintiff's statutory marital right because the transfers had been made by the decedent with the intent thereby to defeat the plaintiff's statutory marital right.

At issue on this appeal is whether plaintiff's statutory marital right in the shares of stock was effectively defeated by decedent's transfer, during his lifetime, of the stock to himself and defendant in joint tenancy with right of survivorship.

OPINION

The statutory marital right which plaintiff, as the surviving spouse of the intestate decedent-donor, asserts against the defendant-sister of the deceased, as the surviving joint tenant of the property in question, is created by section 11 of the Probate Act (Ill. Rev. Stat. 1967, ch. 3, par. 11). Under the circumstances existing in the instant case (namely, plaintiff and defendant were the sole surviving heirs of the intestate deceased spouse), plaintiff's statutory marital right extends to the whole of decedent's personal property. The comparable statutory marital right, where the deceased donor-spouse dies testate and where the surviving spouse renounces the will in the manner prescribed by section 17 of the Probate Act (Ill. Rev. Stat. 1967, ch. 3, par. 17) is created by section 16 of the Probate Act (Ill. Rev. Stat. 1967, ch. 3, par. 16). In Montgomery v. Michaels (1973), 54 Ill.2d 532, 301 N.E.2d 465, the court held that the statutory marital right created by par. 11 in the surviving spouse as an heir of the intestate deceased spouse was entitled to the same degree of protection as has been afforded, as a matter of public policy, to the statutory marital right created by section 16.

It is elementary law that the statutory marital right referred to is the right of a surviving spouse to a fee interest in the whole or a specified fraction of all the property which the deceased spouse owned in fee at the date of his or her death, after payment of all established claims of estate creditors and of the costs of administration of the decedent's estate.

Unlike the common law dower right (now abolished in Illinois; Ill. Rev. Stat. 1973, ch. 3, par. 18) which, under given circumstances, attached to all real property owned in fee by the deceased spouse at any time during the continuation of a valid marriage and which, during the lifetime of both spouses, constituted the marital right of inchoate dower, the statutory marital right has no inchoate stage, since it applies only to property which the deceased spouse owns in fee at the date of his or her death. (Petta v. Host (1953), 1 Ill.2d 293, 115 N.E.2d 881.) Prior to that date of death, the statutory marital right is a pure expectancy which, however, cannot be defeated unilaterally by any testamentary transfer of the deceased spouse. Hence, the statutory marital right does not enjoy the ...


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