No. 13417 INTHE SUPREME COURT OF THE STATE OF MONTANA 1978

GLORIA LOIS CARLSON BOATMAN, Plaintiff and Appellant,

-vsHOWARD BERG, Defendant and Respondent.

Appeal from: District Court of the Seventeenth Zudicial District, Honorable Thomas Dignan, Judge presiding. Counsel of Record: For Appellant: Morrison and Ettien, Havre, Pilontana J. Chan Ettien argued., Havre, Montana For Respondent: McKeon and McKeon, Malta, Montana John C. McKeon argued, Malta, Montana

Submitted: January 31, 1978

Filed: qf-'r(" 2

### Mr. JusticeJohn Conway Harrison delivered theOpinion of the Court:

Plaintiff institutedthis action inthe District Court, Phillips County, seeking a declaration that defendant isa constructive trustee over certainproperty transferred from plaintiff todefendant. From a judgment of theDistrict Court denying such relief and quietingtitleto the property in defendant, plaintiff appeals. Plaintiff isGloria Lois Carlson Boatman. Defendant isher older brother, Howard Berg. In 1953, when plaintiff was sixteen years of age, she married Clyde Carlson, a farmer and rancher. Plaintiff did not work during the marriage, but remained athome and cared for their four children. Clyde Carlson died in 1959. Plaintiff retained Stephen Granat, a Malta attorney, to handle Carlson's estate. The estatewas debt ridden and consisted almost entirelyof realproperty. Plaintiff acted as administratrixand in that capacity leased the real property inthe estate toMorrell Tribby, herbrother-in-law. The lease originally

was for a threeyear term, but was modified by plaintiff to cover only the year 1960. Plaintiff testifieddefendant warned her thatTribby was trying to cheat her out of her property, but defendant denied making such statements. Also inher capacity as administratrix and on the advice of neighbors, plaintiff had several calveswhich were property of the estatebranded with her brand and sold. She used theproceeds of the salepartially to make a payment on the land, and partially forher own personal purposes. She testified shebecame frightened when her attorney informed her this action amounted toembezzlement of estateproperty.For this reason she asked defendant tohelp her with the administrationof the estate. Defendant agreed tohelp. He moved onto the property and began farming it. He paid his own expenses but did not pay rent. Over a period of about five years, plaintiff assigned her interest in four separate tracts of land to defendant. These four tracts

are subject of the instant action for a constructive trust. 

### 1. The "Mahlum" tract. Plaintiff and Carlson had purchased about 160 acres of land from Mabel Mahlum as joint tenants on a contract for deed datedApril 

### 22, 1957. This property isreferred to as the Mahlum tract. The contract provided forpayments in the amount of onefourth of the gross crop, with a minimum of $300 payable incrop

or cash. Also, 5%interest was charged. On June 2, 1961, plaintiff, defendant and Mabel Mahlum met in the office of attorney Granat and executed an assignment of the contract from plaintiff to defendant. Plaintiff admits that her signature is on the assignment, but does not remember such a meeting and disclaims any knowledge of the legal effect of the assignment. Atthe time he drafted the assignment, attorney Granat verified with the escrow that there remained due $5,500 of the $6,000 principal, and $275 back interest. The instrument states the assignment isfornominal consideration. It is not contested that subsequent to the assignment defendant paid the back interest, the remaining principal, and received the deed to the property. Defendant introduced evidence of additional consideration for the assignment. The year 1961was a drought year on the landand defendant, who had farmed the land athis own expense, received a federal crop insurance payment of $832.72. Defendant paid this amount into the estate. The District Court found this payment, along with the payment of back interestwhen the contract

was in default, constituted sufficient consideration for the assignment. 

### 2. The StateLease At his death in 1959, Carlson held a state lease covering about 

### 320 acres of land. This lease expired in 1961, and defendant renewed it in plaintiff's name. In 1963, plaintiff executed an assignment of the lease to defendant. Again, she admits her signaturebut does not remember signing it. Defendant testified thatboth parties agreed to the assignment, and it was inconsideration for defendant's help with the estate. The periodic payments

were thereafter made by defendant. The lease expired in 

### 1971, and defendant took out the new lease inhis own name. There is no evidence plaintiff made any effort to acquire the 

### 1971lease. The District Court tookjudicial notice of the regulations of the Commission of StateLands and Environment prohibiting the subleasing of state land for profit. The court found that since the lease assigned to defendant had expired, this question 

### is moot. We agree and decline to consider the "state lease" issue further. 3. The "Rueb tract Prior to his death, Carlson purchased about 320 acres of property on a contract for deed from Reinhold and Alice Rueb. This property isreferred to as the "~ueb"tract. When Carlson died, plaintiff became the owner of a one-third interestwith the children owning the other two-thirds interest. Plaintiff expressed toattorneyGranat the desire to sellthe property to defendant, but was told that she could only dispose of her own one-third interest. In January 1965, defendant had 

### a quitclaimdeed prepared for the purpose , , of conveying plaintiff's one-third interest tohim. Plaintiff had remarried by this time and was living inIndiana. Defendant mailed the deed toher along with a cover letter requesting her to sign the deed and return it. The letter stated, inpertinent part:

"9: 

# ** I am enclosing a deed for you to sign if its agreeable with you. 

### "I talked toa guy from the Federal Land 

### Bank last fall, and he said the only way 

### I possibly could borrow the money istoget a deed, so this iswhere 1'm starting

# -- If 

### I can get the money. "I willpay off Rinhold and Alice the $3000.00 for the 113 interest that is inyour name. Thiswould give me 113 interest and 213 interest for the kids. I will pay theback interest and keep up the taxes for the use of there share for 

### 3 crop years, after that I willgive them 114 of the crop splitbetween them, on there 2/3 share

# -- less 213 of the taxes.

# *** "The main reason 

### I would like to get it payed off 

### is that actually Rinhold and Alice could step inand repossess it and the kids would end up with nothing. 

# ***" On March 

### 1, 1965, plaintiff signed the quitclaimdeed in Indiana and returned it to defendant. The original contract price for the "~ueb"tractwas $5,500. Atthe time of the transfer in 1965, there was a $3,120 remaining balance on the principal. The contract was indefault and back interest and taxes were owing. Subsequent to the quitclaimdeed, which amounted toa transfer of a 113 interest inthe property, defendant paid off the entireremaining balance, including the back taxes and interest. The District Court found:"9~ 

# * >Therehas been no showing that the price paid by the defendant atthe time of the purchase of said 113 interest inthe '~ueb' tractwas less than the market value for said 113 interest atthe time of the purchase and as such,must be considered as fair and adequate consideration for the '~ueb' tract.I1 

### 4. The "Great Northern1' tract This property consists of about 17.5 acres adjoining the Great Northern Railway. It was owned by Carlson athis death. Plaintiff quitclaimed her 113 interest in this property to defendant August 10, 1966. Defendant testified the consideration for this transfer was the cancellation of a preexisting debt of $500. Defendant advanced the money for a Buick automobile for plaintiff and Carlson and was

never repaid. Plaintiff admitted defendant paid for the automobile and had not been repaid, but she denied there was ever any bargain regarding cancellation of the debt for the transfer of the "Great Northern" property. Defendant again does not recall signing the quitclaimdeed. The DistrictCourt held the cancellation of the indebtedness

was fairand adequate consideration for the quitclaimdeed. The theory of plaintiff's case is that a constructive trust should be imposed on allof the above described property forher benefit. The imposition of a constructive trust isgoverned by section 86-210, R.C.M.1947: 'IInvoluntary trust resulting from fraud, etc. One who gains a thing by fraud, accident, mistake, undue influence, the violation of trust, or other wrongful act, is, unless he has some other orbetter right thereto, an involuntary trustee of the thing gained, for thebenefit of the person who would otherwise have had it."

### It iswell established inMontana that "in order to recover upon the theory of a resulting or constructive trust, the proof must be clear, satisfactory, convincing and practically free from doubt." Rdbuck v. Dennis, (1967), 149Mont. 247, 251, 425 P.2d 327. Also see: Barrett 

### v. Zenisek, (1957), 132Mont. 229, 237, 238, 315 P.2d 1001. The District Court, initsfinding No. 8, stated: "Plaintiff has not offered any clear, satisfactory and convincing evidence of 'fraud, accident, mistake, undue influence, violation of a trust, or otherwrongful act' by the defendant inthe acquisitionof these four tracts

# ** *.'I 

### However, plaintiff contends the District Court erred infailing tomake a finding on the issue of whether a confidential relationship existedbetween plaintiff and defendant. It is

### argued such

### a finding 

### isnecessary because one who voluntarily assumes a relation of personal trust and confidence 

### is considered tobe a trustee. Section 86-205, R.C.M. 

### 1947. Further, if defendant was a trustee, he was bound to act inthehighest good faithindealing with the trustproperty, and alltransactions between defendant and his beneficiary thatbenefit him arepresumed tobe entered into under undue influence and without consideration. Sections 86-301,86-308, R.C.M. 

### 1947. We do not agree a finding on this issuewas necessary because there isinsufficientproof that defendant violated even thehigh standards imposed upon a trustee. The existence of a confidential relationship between a grantor and grantee is 

### insufficient, inand of itself, to support the imposition of a constructive trust. Mahaffey v. DeLeeuw, (1975), 168Mont. 274, 280, 542 P.2d 103. Clearly, some wrongful actmust stillbe shown. InRoecher 

### v. Story, (1931), 91Mont. 28, 45, 5P.2d 205, the Court stated:

### "*

# ** If the evidence which is introduced to prove a fiduciary relationship atthe same time shows that the actions of the trusteewere done ingood faithand for the benefit of the cestuiquetrust,there isno room for a presumption of wrongdoing on the part of the trustee." Here, the record fails to show defendant improperly used his influence or took advantage of any trust relationship. Allof the transactions were handled through plaintiff's attorney. There is

no proof of any broken promise on the part of defendant toreconvey any of theproperty. plaintiff's claim throughout 

### is simply that she signed the various instruments without knowledge of their contents or legal effect. In the case of the "Rueb" property, however, therewas evidence plaintiff expressed a desire to sellthe property todefendant prior to the assignment. The letter defendant sent toplaintiff accompanying the deed clearly explains: "This would giveme 113 interest and 2/3 interest for thekids." The "Mahlum" assignment

was executed ata meeting of allthe parties tothe transaction and plaintiff's attorney. With respect to these transactions, attorney Granat testified, on examination by the court: "THE COURT: And as toMrs. Boatman here, when she came into your office did she discusswith you papers that you had drawn forher or would shejust sign them outright? A. Like every other client, 

### I would try to explainwhat the documents were, Your Honor. "THE COURT: Did she understand them? A. To thebest of my knowledge, yes.

"THE COURT: Did orwould you say that theDefendant was being trustedby the Plaintiff in this case, that she trustedhim? A. Far asI can recall these conversationswere 

## -- well matters were discussed and we tried to the best of our ability to make both parties understand what they were getting into and what the result of the transactionswould be. 

### I was with them, and trying to explain what the legal consequences would be of these transactions that these two parties were getting into, Your Honor."

### Considering allof the circumstances, we find no showing defendant breached even the duties of a trustee or committed any other wrongful act inthe inducement of these transactions. We further conclude the evidence supports the court's finding that therewas consideration for the transfers. The contracts on both the "Mahlum" tract and the "Rueb" tract were clearly indefaultwhen they were assigned to defendant. While the evidence is conflicting regarding the amount of plaintiff's equity inthe "~ahlum"property, it

### was atmost $1,000, and there 

### is ample evidence to support the District Court finding that it 

### was $500. For this defendant paid more than $800 in federalcrop insurance payments into the estate, of which plaintiff was clearly a beneficiary. Additionally, he paid defendant's debt toMahlum of $275 inback taxes and interest. For a 1/3 interest inthe ''~ueb" tract, defendant paid the entireremaining principal of $3,120. Not only was thismore than adequate for a 113 interest, but plaintiff alsohad a strong interest inprotecting the property rights of her children, which could have been losthad the default notbeen curedby defendant's payment. Nor 

### is it 

### disputed that the cancellation of a $500 debt was more than adequate for the transfer of a 113 interest inthe "Great Northern" tract. Plaintiff merely argues there was no such agreement. Defendant testified such an agreement did take place, and this Court will

### not review determinations of weight and credibility of testimony of witnesses made by the trialjudge as a trier of fact. Kartes v. Kartes, (1977), Mont

# . ,573 P.2d 191, 195, 34 St.Rep. 1576; Miller v. Fox, (1977), Mont

# . , 571P.2d 804,807, 34 

### St. (1973)

## , Rep. 1367; Hellickson 

### v. BarrettMobile Home Transport, Inc.,/l61 Mont. 455, 459, 507 P.2d 523.In summary, this Court willsustain the findings of fact of the trialcourt unless there isa decided preponderance of evidence against them. 

### Earrett v. Zenisek, supra. Here the findings of fact are clearly supported by the evidence. Nor are the conclusions of law inadequate. There was no need for a specific finding on the issue of the existence of a confidential or fiduciary relationship, because there was insufficient proof of wrongdoing on the part of defendant even if he isconsidered tobe a voluntary trustee. The judgment of theDistrict Court 

### is affirmed.

We Concur:

-- Chief Justice