No. 12995 INTHE SUPREME COURT OF THE STATE OF MONTANA 1975

THELMA MAHAFFEY, as Guardian of the Estates of VALARIE and VAUGHN DeLEEUIJ, MONTE DeLEEAbJ and BEVERLY DeLEEUW

## , individually and asAdministratrix of the Estate of TIEMAN DeLEEVrd, Deceased, Plaintiffs and Respondents,

-vs

# - ANNIE DeLEEUW, Defendant and Appellant.

Appeal from: District Court of the Thirteenth Judicial District, Honorable Charles Luedke, Judge presiding

# . Counsel of Record: For Appellant: Moses, Kampfe, Tolliver and Wright, Billings, Montana D. Frank Kampfe argued, Billings, Montana For Respondents: James 

### J. Palmersheim argued, Billings, Montana

Submitted: September 29, 1975 Decided: ' Filed: *,

/' ClerkMr. Justice John Conway Harrison delivered the Opinion of the Court.

This is an appeal from a judgment of the districtcourt, Yellowstone County, Hon. Charles Luedke, presiding. The issuehere iswhether therewas sufficient credible evidence to support the district court's findings of fact, conclusions of law and judgment ordering defendant toreconvey certain real property toher deceased son's estate and heirs at law. She appeals. Defendant takes issuewith the court's finding of fact No. 10 and conclusions of law Nos. 

### 2, 3, and 

### 4,but the principal issue iswhether'therewas sufficient evidence to support the district court's decision. Defendant Annie DeLeeuw 

### is the mother of Tieman DeLeeuw, deceased. Hereinafter he 

### willbe referred to asTim. Timmarried Thelma Jean Mahaffey in 1946, they had three children, Montey, and twins Vala-rie and Vaughn. The marriage ended in divorce in November 1966. Timwas latermarried for a short time to a
woman named Ginger, which was terminated by an annulment paid for by Annie, his mother. On February 18, 1970 he married Beverly, the administratrix of his estateand one of respondents here. This marriage terminated with 

### ~im's death inJune 1971. During Thelma and ~im's marriage they developed several businesses and acquired both business and residential properties. Tim established and operated a private garbage hauling business for the Billings suburban area not having municipal services. Each year they operated a large Christmas treebusiness. Much of the financing of thesebusinesses was through ~im's mother, Annie. Thelma worked in ~im's office answering the telephone and handling the books. From the very beginning of theirbusiness ventures they employed James Hoffman, a licensed public accountant, for their bookkeeping and accounting records and tax matters.

### Sometime ,in 1965 Tim

### and Thelma separated and in 1966 she filed for a divorce requesting partition of allreal property and an equitable division of allproperty, both real and personal that the partieshad acquired during the marriage. Immediately after the divorce and partition actionwas filed, Annie fileda debt action against both of them alleging some $50,000 of preexisting indebtedness. Negotiations between the parties resulted inan agreement inNovember 1966, inwhich Annie completely released and discharged the obligation of Thelma. She dismissed the debt action with prejudice, being fully settled on the merits. Thelma and Tim 

### settled their property differences by partitioning one of their properties, a 14 acre tract called the "Rims" 

### property, with Thelma receiving the family home and 8 acres and Tim

### receiving 6acres. Thelma alleges that she withdrew her partition action on allthe rest 

### of the property and quitclaimed the same toTim

### with theunderstanding that it 

### remain as security for their children. There isnothing inwriting tothis effect. The divorce followed with Timmaking support payments in the amount of $160 per month for the three children. Plaintiffs' complaint originally requested that five separate parcels of landbe reconveyed, but inpretrial discovery it

### was learned that the "Cabin" property and the "~eights" or

I1

### Shop" property had been settledbetween Tim 

### and Annie and that only three properties were atissue: 

### #I. Lots 

### 5,6 and 

### 7, B1. 

### 39, Orig...Town, Billings "Office property" $14,536 82. NE 

### 114 NE 

### 114, Sec. 29 R. 

### 26E "~lue Creek" 

### 9,642 #3. Tract 1,Cert. 

### Survey 1085 "Rims " 

### The record clearlyindicates that as to allfiveproperties Annie gave either partial or complete financial assistance to Tim's 

### efforts to purchase the property. As 

### to the above three properties,

### for the purposes of this opinion we

### willnotehere that they

were both pre and post 1966, the date of the property settlement heretofore referred to. The "Blue Creek" property involving 40 acreswas purchased by Tim 

### and Thelma in 1960. Although it

### was inTim 

### and ~helma's name, thepz~hase money of $4,000 was advanced by Annie. Tim



### was unable topay Annie and on August 9, 1968, by deed, Tim

### and Thelma transferred the property toAnnie. Since that date, she has paid the taxes on that property. The 'l~ims"

### consisting of 14.6 acres, was purchased in 1954. Although Thelma was vague on where the money came from topurchase this property, the record indicates that Annie sold an apartment house toraise the money for Tim 

### tomake this purchase. None of this

was repaid toAnnie, and Tim 

### and Thelma transferredby warranty deed 5.67 acres of this property toAnnie on August 9, 1968. The remainder of the 14.6 acres had been conveyed toThelma by the property settlement of 1966. The third piece of property 

### iswhat 

### isreferred toas the "Office Property". This property was purchased in 1951by Tim 

### and the record indicates that over the period of purchasing this property Tim

### became delinquent inhis payments and had tocallon hismother tohelp make these payments. In 1966, Tim

### borrowed $6,500 from Annie with the "Office Property" ascollateral and a mortgage pursuant to this arrangement was filed. Neither the down payment, any interimpayments, nor interest had been paid atthe time of ~im's 

### death, except the sum of $650. This propertywas conveyed toAnnie by warranty deed on August 9, 1968. With thisbackground as to the threeparcels of property inquestion, we now return to the November 1, 

### 1966, out-of-court settlementbetween Annie, Tim and Thelma and how it 

### affected Tim 

### and Annie's fiscal operations after that date. By that agreement Thelma was relieved of any fiscal obligations, but Tim

### assumed the

### obligations tohis mother. Tim

### was required by the agreement to

11 

### convey the Shop" property toAnnie; topay allthe remaining mortgage obligations; and topay Annie $100 per month until the mortgage terminated. He 

### failed topay eitherthe mortgage or the $100 per month, resulting incash disbursements by Annie of over $10,000. On November 29, 1966, Tim 

### signed a promissory note along with the mortgage, and received $6,500 for the "Office" property. This sum never was repaid. Shortly thereafter in 1967, Annie paid ~im's 

### second wife, Ginger, the sum of $1,300 forwhat appears tobe a settlement in

an annulment of the second marriage. During the two years after the divorce from Thelma through 1968, it 

### appears from checks introduced atthe trialand other records introduced that Annie financed Tim in amounts alleged torange from $30,000 to $50,000. In late 1968, an agreement was made between Tim 

### and Annie, previously noted, where Tim

### inan effort to settlewith his mother, conveyed over toAnnie the fiveparcels of land. This settlement

was handled by Attorney Charles F. 

### Moses and his testimony indicated that it

### was a business transaction, voluntary 

### on the part of both parties, with no undue influence, fraud or deceit involved by either party. Mr. 

### Moses, who drew up the agreement, made no reference to any trust agreement or any possible reconveyance of the property. It

### was a finalagreement to settlea debt situation between the parties and inthe record we can find no proof of 

### any force, coercion

orundue influence on the part of Annie in thistransaction. From that date on Annie paid allthe property taxes, due and past due, and from that date to

### the time

### of ~im's 

### death Annie continued tohelp Tim 

### inhisbusiness. Defendant alleges the district court erred in itsconclusion^ 

### of law. We agree. Conclusion No. 

### 4 found that a "resultant trust"

was created by the conveyanceswith the defendant as a constructive trustee.Section 86-210, R.C.M. 1947, provides:

11Involuntary trust resulting from fraud, etc. One who gains a thingby fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act, is, unless he has some other orbetter right thereto, an involuntary trustee of the thing gained, for the benefit of the person who would otherwise have had it.11 From the reading of section 86-210, it is obvious that ifwe are to sustain the district court by imposing a constructive trust on these properties, then fraud must be found. This the trial court failed to do and we note that neither the pleadings

nor proof show a finding of an "accident", "mistake", "undue fluence", "violation of 

### a trust, or other wrongful act" as to

come within the provisions of section 86-210. In McReynolds v. McReynolds, 147Mont. 476, 482, 414 P.2d 531, a case involving transfers of propertywithin a family, Justice Castles sa.id: "Just as the written statements of the defendants were not admissible tovary the terms of the deeds, neither are their oral statements. Where there 

### is nothing ambiguous oruncertain in the terms of a deed it speaks for itself, and par01 evidence tending to show a prior or contemporaneous oralagreement or tacit understanding with respect to the terms of the conveyance is inadmissible. II In Bodine v. Bodine, 149 Mont. 29, 39, 422 P.2d 650, this Court said: "The deed here must be construed as it 

### iswritten. We can neither put words into the deed which arenot there, nor can we put a construction on words contrary to their obvious meaning. 23 Am.Jur.2d Deeds, $161, pp. 209-210." In 

### its findings of fact Nos. 

### 5 and 10 and itsconclusion of law No. 3, the court found that there existedbetween Annie and Tim, "a mutual relationship of confidence, trust and financial transactions unique to close, personal intra-family ties." As a result of this trust relationship, according to the court, Annie induced Tim to transfer certainproperties toher. The record does not support either the findings or the conclusion of law. This Court

### inMcReynolds 

### is in accord with authority that a confidential relationshipbetween grantor and granteewho arerelatives isnot sufficient enough to find undue influence on the part of the grantee. Mollendorf v. Derry, 95 Idaho 

### 1, 501 P.2d 199; Dickey v. 

### Clarke, 

### 65 Idaho 247, 142 P.2d 597. Under Montana law and the factshere, we hold the district court erred in

### its findings of fact and conclusions of law that defendant induced her son totransfer certain properties toher and that a resultant trustwas created making her a constructive trustee for saidproperty. The cause 

### isreturned to the district court to comply with this opinion.

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### Chief JustYce

Justices.Mr. 

### Justice Frank I. 

### Haswell, dissenting: I 

### dissent, In my view there 

### is substantial evidence supporting the district court's findings of fact; its 

### conclusions of law based

on such facts arecorrect; and its

### resultingjudgment should be affirmed

# . As I 

### see it, 

### this case turns primarily on the facts. Admittedly the evidence isconflicting. The districtjudge, as trier of the facts, resolved these conflicts in favor of plaintiffs. The function of the Supreme Court on appeal is 

### toreview the record and determine whether there is 

### substantialcredible evidence supporting the trialcourt's findings of fact. Richardson v. Howard Motors, Inc,, 163Mont. 347, 516 P.2d 1153and cases cited therein. In an equity case this Court must review allquestions of fact and law, and must sustain the trialcourt's findings of factunless there 

### isa decided preponderance of evidence against them. Barrett v, Zenisek, 132Mont. 229, 315 P.2d 1001. A 

### summary of the principal findings of factby the trial court is: 

### (1) That a mutual relationship of trust and confidence existed between Tim 

### and Annie. 

### (2) That Tim

### was a heavy drinkerwho could 

### not or would not assert his own judgment in the face of Annie's arguments and remonstrances concerninghis personal lifeand business affairs. (3) That 

### inAugust 1968, Annie induced Tim to transfer toher allreal estate standing inhisname by representing that it

### was forhis own protection and led him tobelieve that shewould reconvey it

### back tohim at the

### proper time. 

### (4) That conveyance was made without consideration and with theunderstanding that Annie would reconvey the property back toTim 

### on request. (5) That between the date of Tim's 

### third marriage in 1970 and the date of his sudden and unexpected death in 1971, Annie refused Tim's 

### demand forreconveyance of the property.The evidence supporting these findings 

### is: (1) The first finding 

### isundisputed. 

### (2) The second finding 

### is supported by the testimony of Thelma Mahaffey, ~im's firstwife towhom he was married for 

### 20 years, and from the death certificatelistingacute alcoholism as a contributing cause of death. 

### (3) The third finding is supported by the testimony of James A. Hoffman, the licensed public accountant who kept thebooks and records for 

### Tim's businesses, including accounts between Annie and Tim, for about 

### 20 years and who prepared both ~im's and Annie's income tax returns. Hoffman testified that in 1968 Annie told him that the Foperty transfer "was only temporary, that it was going tobe transferred back to [Tim]"; that so far ashisbooks 

### reflected, therewas "still a balance due from Annie to Tim of $1,967.69"; and that allpreexisting recorded indebtedness of Tim toAnnie had been completely paid and discharged. Beverly DeLeeuw Pulver, ~im's widow, testified she asked Annie why "the property was inher name, ~im's property was inher name, and she said 'For his protection'; and I said 'why his protection?You know he's a grown man' and she said he awed money and if he had it in hisname then he would get a lien against him

# * Jc *.I1 Thelma Mahaffey, Tim's firstwife, testified to a conversation she had with Annie during the time of Tim's marriage tohis second wife, when Annie said "there would be no one touch his property or ever take anything away from him because she had it all tied up. 11(4) The fourth finding is supported by the foregoing testimony of the accountant, Hoffman; his ledger and accounting sheets; the property valuation testimony of William F. Stevens, the appraiser; the 1966 agreement, release and satisfaction of judgment by Annie inher debt action against both Timand Thelma; and the corroborating testimony of Thelma Mahaffey.(5) The fifthfinding is supported by the testimony of Thelma Mahaffey to the effect that Tim so advised her shortly before his death. I would hold that the foregoing constitutes substantial > credible evidence supporting the district court's findings of fact. Given these findings of fact, the district court's conclusions of law follow asnight follows day. The pertinent statute provides: "86-210. Involuntary trust resulting from fraud, etc. One,whogains 

### a thingby fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act, 

### is, unless he has some other or better right thereto, an involuntary trustee of the thing gained, for the benefit of the person who would otherwise have had it." Whether the circumstances here are characterized as constructive fraud, undue influence, orviolation of a trust 

### is beside the point. Where, as here, a transfer 

### ismade between two persons standing in a confidential relationship without valuable consideration and induced by a promise toreconvey, equity imposes

a resulting trust on the property, not because the parties agreed that the property would be held in trust, but toprevent unjust enrichment of the malefactor atthe expense of the injured party. Robuck 

### v. Dennis, 149 Mont. 247, 425 P.2d 327; Bradbury v. Nagelhus, 132Mont. 417, 319 P.2d 503. The abuse of the confidential relationship by failure to fulfill the promise toreconvey is the substance of thewrong forwhich equity

### willimpose a resulting trust. Scott on Trusts, Third Edition, V. 

### 1, 544.2. In my view, the majority here has cut off the inheritance a rights of thewidow and childrenby making/factual determination contrary tothat of the district court. Therefore, I dissent.

Justice.