Estate of Birnie M. Davenport, Deceased, Patricia L. Vestal, Personal Representative - Page 10

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                  Pursuant to an oral agreement4 of at least 30 years prior to                           
            the death of Elizabeth, Birnie and Elizabeth commingled all of                               
            their earnings and assets.  Birnie and Elizabeth maintained joint                            
            checking and savings accounts.  Birnie and Elizabeth built a home                            
            together, sharing equally in the costs of construction and                                   
            maintenance.  Title to the sisters' house was held in both of                                
            their names.  Pursuant to the sisters' oral agreement, legal                                 
            title to shared assets was held in Elizabeth's name.  Birnie and                             
            Elizabeth shared the costs of all investments and considered all                             
            investments to be equally and jointly owned.  The sisters' shared                            
            assets included all stocks and bonds held in the name of                                     
            Elizabeth.                                                                                   
                  Birnie and Elizabeth both participated in making investment                            
            decisions and agreed that each of them owned one-half of all                                 
            property acquired by them regardless of the name in which title                              
            was held.  These assets included 3,220 shares of stock of Hondo.                             
            Birnie considered  1,610 shares of the Hondo stock her own                                   
            property notwithstanding that the shares were held in Elizabeth's                            
            name.                                                                                        
                  Birnie prepared the Federal and State income tax returns for                           
            both herself and Elizabeth until 1965.  In accordance with their                             


                  4  Petitioner asserts that this oral agreement created a                               
            business partnership between the two sisters.  We shall address                              
            this assertion in our discussion; for convenience, however, in                               
            our findings of fact we shall refer to it as either the agreement                            
            or the arrangement.                                                                          




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