Facts. The defendant’s mother purchased a $1,000 face value U.S. Savings Bond which was registered in the names of defendant, “and/or” plaintiff, “and/or” Dorothy Lee, plaintiff’s mother. One of the defendant’s clients made one $500 gift to the defendant and two other $500 gifts to the defendant’s two other children. The donor deposited $1,500 into a savings account in the name of the defendant and his three children. The defendant cashed the savings bond and invested the proceeds in common stock of the Commercial Bank of Salem, Oregon. The shares were registered as “Jason Lee, Custodian under the Laws of Oregon for Betsy Lee.” The defendant closed the joint savings account containing the client’s gifts to defendant’s children and $1,000 of the proceeds invested in Commercial Bank stock. The defendant also took title to this stock as “custodian” for his children. The trial court held that the defendant did not hold the savings bond or the savings account in trust for the benef
it of the plaintiff. At trial, the defendant testified that his mother said that she was going to supply a bond to help with his daughter’s educational needs and that she was naming him and his wife to use the funds as may be conducive to the educational needs of his daughter. The defendant also wrote a letter to his mother in which he stated that his children, Dave and the plaintiff were aware that the defendant held his mother’s property in trust for them.
Issue. Whether a trust exists where the specific term “in trust” is not used to transfer the property?
Held. No. A trust exists here even though the specific term “in trust” was not used to transfer the property. It is sufficient that the defendant testified that he received property for the benefit of his own children and he admitted in a letter that he wrote to the owner that he held property in trust for his children. Even though the defendant purchased bank stock as the “custodian” for the plaintiff under the Uniform Gift to Minors Act, it was ineffectual to increase the defendant’s powers over the trust property from that of a trustee to a custodian.
Discussion. The particular facts revealed during the trial showed that the defendant was aware that he was holding property in trust for the plaintiff.