Exam A
OUTCOME OF THE CASE: GIFT OF GABBERS
fter Betty filed suit, she offered to let Sally buy the mare for $5000. Sally refused, claiming the horse had been a “gift,” and that she should not have to pay Betty anything for the mare when she had in- vested more than a year in the mare’s care and train- ing. Sally asserted a lien on the mare in the amount of $15,000 that she claimed represented her “invest- ment.” Sally claimed Betty only wanted the mare back because she thought she could make some money off it now that Sally had trained it. The judge found in Betty’s favor and ordered
Sally to return the horse to Betty. Sally’s “free lease” of the mare for more than a year and a half did not entitle her to a lien or any reimbursement for main- tenance costs or payment for training. Betty ulti- mately sold the mare, but the judge ruled that she didn’t owe Sally anything from the sales proceeds because Sally had not held up her end of the deal by misrepresenting ownership of the mare and re- fusing to take reasonable steps to market the mare for sale on Betty’s behalf. Sadly, the lawsuit marked the end of a lengthy and close friendship between the two women. Betty never thought she would have to put the agreement in writing because she and Sally had been friends “forever.” Sally was certain that Betty would ultimate- ly give her the mare and would not “sell her out from under me.” The “gift horse that was not” is a very common
type of horse-related dispute. And it is not unusual that the people on either side of such a dispute at one time were friends—close enough friends for one person to entrust the other with their horse. And people do not like to think they need to document a transaction “between friends.” As a result, when a dispute arises, it becomes a case of “he said, she said.” People often ask me whether “anything” in writ-
ing will work. What they usually have in mind is something along the lines of: I will send my friend an e-mail or a note setting out that I am just loaning her this horse and I expect it back. These sorts of one- sided notes are not particularly useful. They may be proof of the owner’s intent at the time the note was written, but do nothing to establish the other person’s intent nor the owner’s intent at the time the arrangement was first discussed with the friend. I had one case where the friend claimed that the owner had given her the horse as a gift, and when
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the friend got the owner’s note (stating that the horse was only being “loaned”), the friend did not reply because she didn’t understand why the owner had changed her mind after the fact. Thus, the best practice is to put the agreement in writing and have both people sign it before custody of the horse is transferred. There are any number of circumstances that can come up that will make you wish you had something in writing. A change in the horse’s value can create a big is-
sue—either an increase or a decrease. Someone who has given a horse away, only to see it do well with its new owner and increase in value, may be tempted to reclaim possession. On the flip side, someone who has accepted a gift of a horse that turns out to have no value or use may be tempted to return the horse. Liability is another big issue that is tied to owner-
ship. What happens if the horse you have given away (or loaned) hurts the person you gave (or loaned) it to? Do not think that a friendship can survive a cata- strophic injury inflicted by a “gift” horse. Timing can be another big issue. For example, the person taking the horse might think that they will have free use of it for a year. But then the owner doesn’t actually want the horse back after a year and perhaps a very long time will pass before the owner demands the horse back. A person who has been caring for a horse for a period of time will sometimes think that they are (or should be) the rightful owner because so much time has passed that the owner has “abandoned” the horse. Because horses are “personal property” under the law, the statute of limitations for abandonment of personal property generally applies to horses and, in some states, that might be as long as 15 years. Some states have laws that permit the custodian of an animal to deem it “abandoned” after a much shorter period of time (weeks or months), but those laws tend to be limited to small animals (dogs and cats). Thus, if you are agreeing to take care of someone’s horse for a period of time, it is best to get the owner to agree to a specific time frame and how extensions of that time frame will be handled. The bottom line is that it is best for all parties to
put in writing any agreement related to transferring custody of a horse, regardless of the type of trans- action (gift, lease, sale, consignment, training or boarding).
Bar
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