Saturday, June 19, 2010

The Presumptions of Gift vs. Loan

Brad Barnes sued Rose Michalski to enforce the repayment of an alleged loan. Plaintiff's complaint alleged that he lent defendant $27,000 and that she had not repaid the money. Defendant's answer alleged that the money was a gift.

There was considerable testimony at trial concerning the relationship of the parties. Both plaintiff and defendant were swingers. They were both married to other people and the four of them routinely met at their houses, hotels, or certain campgrounds to practice their self-described lifestyle of "swinging."

The appellate opinion spent considerable time examining the presumptions that should have arisen at trial. The court found the law presumes a gift if someone transfers property to his or her spouse or family member. The burden would then shift to the transferor to prove that it was a loan and not a gift.

However, there is no presumption of a gift to a friend, even a close friend. Their apparently is also no presumption of a gift to a swinging colleague. In this case because the parties were not related, the presumption was of a loan. The burden then shifted to the defendant to prove it was a gift. The only evidence offered in support of the gift theory were defendant's own self-serving statements.

Also as there was no written contract, nor was there ever any discussion of the repayment terms when the money was exchanged, defendant argued that plaintiff could not meet its burden in proving that it was a loan.

The court found that the common law does not require plaintiff to prove the "terms of repayment" to obtain a judgment for repayment of a loan. Pursuant to the Restatement of Contracts, if a loan omits the terms of repayment, the court can supply the terms.


Matias said...

Lowering the size of the loan may help. The larger your down payment, the lower the amount of cash you will need to acquire.

Jhone said...

Took me time to read all the comments, but I really enjoyed the article. It proved to be Very helpful to me and I am sure to all the commenters here! It’s always nice when you can not only be informed, but also entertained! no credit check payday loans online

Jessica Rivera said...

A personal loan is a specific kind of debt. In case of a loan the financial assets are redistributed over a period of time normally between the borrower and the lender like all other debt instruments. The process of this loan mainly involves two steps as: visit website

Dr.Zack Martin said...

It’s amazing in support of me to truly have a web site that is valuable meant for my knowledge. Yola blog

Lina Cooper said...

Nice answers in replace of the question with real point of view and explaining about that. Progressive Finance Cash Loan