## Facts

- Grace Cowling and Garnard Cowling married in 1967; each had children from prior marriages and they had no children together.
- During the marriage, Grace and Garnard accumulated brokerage accounts and stock investments titled jointly with rights of survivorship.
- In July 1996, Grace signed documents transferring the stocks so that Garnard obtained exclusive possession and control over assets that had previously been jointly owned and controlled.
- Garnard later placed the stocks into a transfer-on-death (TOD) account and named his three children from a prior marriage (and related family members) as beneficiaries/transferees.
- Garnard also transferred other assets from joint brokerage accounts into his own name and placed them into TOD accounts.
- Garnard died in February 1998; the TOD account assets passed to his children, and the combined value of the stock gifts and TOD proceeds totaled about $325,358.
- Grace asserted that the assets transferred to Garnard’s children largely came from her contributions to the couple’s joint accounts and sought equitable relief, including a constructive trust over the transferred assets.
- The parties stipulated that, at the time of trial, the stocks transferred to Garnard’s children remained in the same form as when the children received them.
- Grace introduced accounting evidence (including testimony from a certified public accountant) estimating that approximately $255,354 of the disputed assets was attributable to Grace’s net contributions.
- The trial court found that Grace’s contributions accounted for that amount and imposed a constructive trust on $255,354 worth of the assets in the TOD account.
- The transferees appealed; to secure the appeal, they sold the stocks and deposited the proceeds with the Lorain County Clerk of Courts.
- The court of appeals reversed the constructive-trust judgment, and Grace (through her estate) appealed to the Supreme Court of Ohio.

## Issues

1. In a dispute over assets formerly held in joint and survivorship form, may the presumption that each co-owner owns the funds equally be rebutted by proof of the parties’ unequal net contributions, and if so, under what evidentiary standard?
2. Where a spouse moves jointly funded assets into TOD accounts benefiting third parties, may a court impose a constructive trust on the portion attributable to the other spouse’s contributions to prevent unjust enrichment?
3. May a constructive trust be traced into substituted property (here, proceeds from the sale of the stocks held as cash by the clerk of courts) after the original assets have been sold during the appeal?
4. Did the court of appeals err by reversing the trial court through directed-verdict/JNOV principles when there was evidence from which reasonable factfinders could conclude that Grace proved her disproportionate contributions?

## Decision

- The Supreme Court of Ohio reversed the court of appeals.
- The Court reinstated the trial court’s order imposing a constructive trust for $255,354 representing the portion of the disputed assets attributable to Grace’s net contributions.
- The Court modified the remedy to reflect the assets’ current form, placing the constructive trust over the cash proceeds deposited with the Lorain County Clerk of Courts.
- The Court recognized a presumption that co-owners of joint and survivorship accounts own the funds equally, but held that the presumption is rebuttable by evidence of the parties’ individual net contributions.
- The Court concluded that the trial court properly denied directed-verdict and JNOV motions because the record contained evidence (including accounting testimony and documents) from which reasonable minds could find that Grace established her net contributions by a preponderance of the evidence.

## Legal Principles

- Joint and survivorship accounts carry a rebuttable presumption of equal ownership between the named co-owners.
- The equal-ownership presumption may be overcome by proof of each party’s net contributions to the account or assets, measured under a preponderance-of-the-evidence standard.
- A constructive trust is an equitable remedy imposed to prevent unjust enrichment when a person holds property that, in fairness, should belong to another.
- When property subject to a constructive trust changes form, equity permits tracing the trust res into identifiable substitute property, including sale proceeds.
- Directed verdict and judgment notwithstanding the verdict are improper when, construing the evidence most strongly in favor of the nonmoving party, reasonable minds could reach different conclusions; appellate review may not reweigh credibility determinations made by the factfinder.

## Conclusion

Estate of Cowling involved a spouse’s joint assets being shifted into TOD accounts favoring the other spouse’s children; the Supreme Court of Ohio held that the presumption of equal ownership in joint and survivorship accounts can be rebutted by proof of unequal net contributions and reinstated a constructive trust for the amount attributable to Grace’s contributions, allowing the trust to follow the property into the cash proceeds held by the clerk of courts.


Estate of Cowling v. Estate of Cowling, 847 N.E.2d 405 (2006)