Case Name: In re Estate of Mary E. Scott. Mary E. Struthoff, appellant, v. Dr. A. E. Cook, as the Executor of the Estate of Mary E. Scott, appellee
Court: Nebraska Supreme Court
Jurisdiction: Nebraska
Decision Date: 1947-04-04
Citations: 148 Neb. 182
Docket Number: No. 32137
Parties: In re Estate of Mary E. Scott. Mary E. Struthoff, appellant, v. Dr. A. E. Cook, as the Executor of the Estate of Mary E. Scott, appellee.
Judges: Heard before Simmons, C. J., Paine, Carter, Mess-more, Yeager, Chappell, and Wenke,- JJ.
Reporter: Nebraska Reports
Volume: 148
Pages: 182–201

Head Matter:
In re Estate of Mary E. Scott. Mary E. Struthoff, appellant, v. Dr. A. E. Cook, as the Executor of the Estate of Mary E. Scott, appellee.
26 N. W. 2d 799
Filed April 4, 1947.
No. 32137.
Frederick M. Deutsch and C. W. Peasinger, for appellant.
Joseph G. Rogers and Clarence E. Haley, for appellee.
Heard before Simmons, C. J., Paine, Carter, Mess-more, Yeager, Chappell, and Wenke,- JJ.

Opinion:
Chappell, J.
Plaintiff brought this action to ascertain and enforce a constructive trust upon the proceeds of a registered $5,000 federal farm mortgage bond in the hands of the executor of the estate of Mary E. Scott, deceased. The bond itself, having come into possession of the executor of the estate, was sold, but as executor he still retained the proceeds therefrom. The questions presented by the pleadings and evidence were whether or not deceased in her lifetime made a gift inter vivos of the bond to plaintiff, and whether or not deceased and her agents, by reason of agreements with and representations to plaintiff upon which she relied, thereafter wrongfully obtained a disclaimer thereto from her. The trial court, after hearing, found and adjudged the issues generally for the defendant and dismissed plaintiff's petition. Motion for new trial was overruled, and plaintiff appealed to this court, assigning as error substantially, insofar as important here, that the judgment was not sustained by the evidence and was contrary to law. We sustain plaintiff's contentions.
The evidence is without any substantial dispute. Mary E. Scott, a single, aged lady, died testate July 24, 1943. The inventory disclosed that she left an estate consisting of cash in bank, certificates of deposit, government bonds, and the bond involved, totaling $10,673.28, exclusive of interest accumulations. Her will, dated October 13, 1942, which was admitted to probate, after providing for payment of debts and the erection of a monument, gave $100 to each of four churches, $1,500 each to her next of kin and heirs at law, a nephew and four nieces, of whom plaintiff was one, and devised the residue to the United States.
The deceased will hereinafter be designated as the aunt. The other heirs at law had not even seen her for many years. However, during the lifetime of the aunt, plaintiff was her favorite niece and was often referred to as "her girl." They were in a close confidential relationship with each other; they corresponded weekly, and until a few years before the aunt's death, plaintiff frequently visited in her home where the aunt lived with an aged bachelor brother, Frederich Scott, until his death on May 6, 1942. After his death, at the written request of the aunt, plaintiff and her husband, who was an employee of the Internal Revenue Bureau in Los Angeles, California, visited the aunt in September 1942.
During that time the aunt freely expressed an intent to leave her property to plaintiff because plaintiff's father had assisted her financially during his lifetime. She instructed her lawyer to prepare a deed conveying her home to plaintiff, and a deed was so -executed and delivered to plaintiff on September 24, 1942, before she left for her home in California. Thereafter, it was duly recorded and forwarded to plaintiff by the aunt's lawyer. That transaction is not directly involved in this controversy. However, previously, on September 19, 1942, the aunt also informed plaintiff that she had a $5,000 federal farm mortgage bond issued to "Mary E. Scott or Frederich Scott or the survivor," which she desired to give plaintiff. Thereupon, the aunt, with plaintiff and her husband, went to the aunt's bank, where the bond was taken from the aunt's safe deposit box and she instructed the president of the bank to transfer the bond to plaintiff, "her girl," so that she would own the interest and take the place of the aunt's deceased brother, Frederich Scott. Thereupon, such an assignment was duly and properly prepared, signed, sworn to, and executed by the aunt, transferring the bond to "Mary E. Scott or Mary E. Struthoff or The Survivor," and authorizing the transfer thereof on the books of the Federal Farm Mortgage Corporation. The aunt then instructed her banker to send the bond to the proper authorities for that purpose. Pursuant thereto, the bank took possession of the bond and sent it to the Federal Reserve Bank.
In the presence of plaintiff and her husband, the aunt upon the occasion when she signed the deed to the home, also told her lawyer to prepare a will providing for payment of debts, the erection of a monument, the giving of $1,000 each to a nephew and four nieces, of whom plaintiff was one, and giving plaintiff all the residue of her estate. Such a will was duly and properly executed on September 25, 1942, by the aunt, after the lawyer had prepared it as directed by the aunt, and her lawyer, at the. aunt's direction, mailed a copy thereof as executed, to the plaintiff. On September 27, 1942, the aunt also wrote to plaintiff, telling her about the execution of the will. It will be remembered that plaintiff was never thereafter informed that the aunt had executed a new will on October 13, 1942, which was also prepared by her lawyer, and plaintiff had no knowledge thereof until after the aunt's death.
After the bond was sent to the Federal Reserve Bank it required proof of Frederich Scott's death. Delay was thus encountered, and the aunt, for reasons of her own not apparent here, changed her mind as indicated by her affidavit executed October 19, 1942, which was sent to the Federal Reserve Bank, requesting cancellation of the assignment made by her to plaintiff on September 19, 1942, and transfer of the bond to the aunt individually, falsely averring therein that plaintiff had no knowledge of such assignment, and averring that it was without consideration. In the meantime, the president of the aunt's bank, in her behalf twice wrote plaintiff's husband requesting that plaintiff execute disclaimer of her interest in the bond, which plaintiff refused to do. However, on November 28, 1942, the aunt's banker again wrote plaintiff?s husband, urging execution of an enclosed disclaimer by plaintiff, representing that "as we understand from Miss Scott's Atty. these funds go to your wife after her death" in any event.
Pursuant thereto, and relying thereon, with knowledge of the provisions of the will of September 25, 1942 then in her possession, but without knowledge or notice of the aunt's subsequent will of October 13, 1942, and without any consideration whatever, plaintiff on December 2, 1942, executed the enclosed disclaimer. Likewise, for reasons not entirely clear and unimportant here, plaintiff thereafter under similar circumstances, executed three other disclaimers. Suffice it is to say that in reply to request on. December 16, 1942, for one of them by the aunt's banker, plaintiff's husband wrote: "Sorry to have given you so much trouble. This was Miss Scott's idea in order to save probate costs and a good one." The implications thereof are clear to us. The bond had been given to plaintiff, which naturally took it out of the aunt's estate, but since, as represented to and believed by plaintiff, the aunt's will gave it to plaintiff in any event, she executed the disclaimers.
Under the circumstances, was there a gift inter vivos? We conclude that there was. The aunt was concededly competent and intended to make such a gift. Her words and acts affirmatively so established her intent. They are not consistent with any other theory. Certainly there was not only donative intent but also a delivery of the bond and acceptance, thereof by plaintiff, which are the essential requirements of a gift inter vivos. 38 C. J. S., Gifts, § 10,' p. 786. The fact that a disclaimer by plaintiff was considered by all as imperative attests its irrevocable character. Everything was done that could have been done to perfect a gift inter vivos. What more could be required when the aunt also retained an interest in the bond until her death, when all of it would pass to the plaintiff as survivor?
It is generally true that delivery is essential to constitute a gift inter vivos. Ordinarily actual delivery is necessary where the subject of the gift is capable of manual delivery, but where actual manual delivery cannot be made, the donor may do that which, under the circumstances, will in reason be considered equivalent to actual delivery. In such cases the delivery may be symbolical or constructive if as nearly perfect and complete as the nature of the property and the attendant circumstances will permit. Annotation, 145 A. L. R. 1386. See, also, 24 Am. Jur., Gifts, § 27, p. 744.
Stated in another way, once it is ascertained that it was the intention of the donor to make a gift inter vivos of an undivided interest in a chattel or chose in action, and all is done under the circumstances which is possible in the matter of delivery, as in the case at bar, the gift will be sustained. Annotation, 145 A. L. R. 1386; Smith v. Pacific Mutual Life Insurance Co., 130 Neb. 501, 265 N. W. 534; Dinslage v. Stratman, 105 Neb. 274, 180 N. W. 81, 14 A. L. R. 702.
In that regard, also, there was nothing inconsistent with retention of possession of the bond by the aunt or her banker, since it was not incumbent upon the aunt to surrender it, inasmuch as she continued to own an interest analogous to a joint tenancy with right of survivorship in the bond, and her possession was not solely in her own right but partly as agent or trustee for plaintiff, who by the gift was vested with the same interest. Abegg v. Hirst, 144 Iowa 196, 122 N. W. 838, 138 Am. S. R. 285; Collins v. McCanless, 179 Tenn. 656, 169 S. W. 2d 850, 145 A. L. R. 1380; Beach v. Holland, 172 Ore. 396, 142 Pac. 2d 990, 149 A. L. R. 866; In re Estate of Dayton, 121 Neb. 402, 237 N. W. 303; 28 C. J., Gifts, § 22, p. 633, § 26, p. 637; 38 C. J. S., Gifts,' § 18, p. 794, § 19, p. 797, § 22, p. 801.
Having concluded that there was a gift inter vivos, we turn to the question whether, under the circumstances, there was a constructive trust enforceable in equity. In Box v. Box, 146 Neb. 826, 21 N. W. 2d 868, this court held that: "A constructive trust is a relationship with respect to property subjecting the person by whom the title to the property is held to an equitable duty to convey it to another on the ground that his acquisition or retention of the property is wrongful and that he would be unjustly enriched if he were permitted to retain the property.
"If a party obtains the legal title to property by virtue of a confidential relation, under such circumstances that he ought not, according to the rules of equity and good conscience as administered in chancery, hold and enjoy the benefits, out of such circumstances or relations, a court of equity will raise a trust by construction and fasten it upon the conscience of the offending party and convert him into a trustee of the legal title."
As early as Pollard v. McKenney, 69 Neb. 742, 96 N. W. 679, affirmed on rehearing at page 753, 101 N. W. 9, this court said: "Closely allied to resulting trusts, and frequently, confused with them, are constructive trusts. This class of trusts arises from actual or constructive fraud or imposition, committed by one party on another. 1 Perry, Trusts (5th eel), sec. 166. Thus if one person procures the legal title to property from another by fraud or misrepresentation, or by an abuse of some influential or confidential relation which he holds toward the owner of the legal title, obtains such title from him upon more advantageous'terms than he could otherwise have obtained it, the law constructs a trust in favor of the party upon whom the fraud or imposition has been practiced. Again, if a party obtains the legal title to property by virtue of a confidential relation, under' such circumstances that he ought not, according to the rules of equity and good conscience as administered in chancery, hold and enjoy the benefits; out of such circumstances or relations, a court of equity will raise a trust by construction and fasten it upon the conscience of the offending party and convert him into a trustee of the legal title. Thompson v. Thompson, 16 Wis. 94; McClain v. Johnson, 43 Vt. 48; Hollinshead v. Simms, 51 Cal. 158." See, also, O'Shea v. O'Shea, 143 Neb. 843, 11 N. W. 2d 540; 65 C. J., Trusts, § 215, p. 454, § 226, p. 476.
This court reaffirmed and approved the above statement of the law and explained the occasion and manner of its application in Box v. Box, supra. In that opinion this court also approved the statement appearing in 54 Am. Jur., Trusts, § 225, p. 173, to the effect that: "While a confidential or fiduciary relationship does not in itself give rise to a constructive trust, an abuse of confidence rendering the acquisition or retention of property by one person unconscionable against another suffices generally to ground equitable relief in the form of the declaration and enforcement of a constructive trust, and the courts are careful not to limit the rule or the scope of its application by a narrow definition of fiduciary or confidential relationships protected by it. An abuse of confidence within the rule may be an abuse of either a technical fiduciary relationship or of an informal relationship where one person trusts in and relies upon another, whether the relation is a moral, social, domestic, or merely personal one. The origin of the confidence reposed is immaterial. A confidential relationship within the rule need involve neither a promise for the benefit of another nor an express fiduciary relationship."
Referring to a constructive trust arising out of an oral promise to hold property in trust, or for a specified purpose, or to reconvey, the opinion also approved a statement appearing in 65 C. J., Trusts, § 223, p. 471, which recites that: "Such a trust will arise, however, out of such a promise made in connection with the receipt of the legal title to property, provided the grantor's purpose is an honest one, where confidential relations exist between the parties and there is no other consideration for the conveyance except the promise, or where the promise is the inducing cause of the conveyance, no other consideration being given, and is relied upon by the grantor, or where the conveyance is made as security for a debt and the value of the land exceeds the amount of the debt. The promise need not be express in order to raise a trust, silent acquiescence on the part of the grantee being sufficient where he has knowledge of the grantor's intention and understanding of the transaction." See, also, Wiseman v. Guernsey, 107 Neb. 647, 187 N. W. 55.
In the case at bar, after the gift inter vivos was complete, plaintiff was led to believe, by the agreements and representations of the aunt and her agents, that the property had been willed to plaintiff in any event, at the same time concealing from her the fact that on October 13, 1942, the will of September 25, 1942, so disposing of it had been superseded by one giving it to others. They thereby obtained disclaimer from plaintiff of her interest in the bond without any consideration whatever, and the aunt accepted and retained the benefits therefrom during her lifetime.
Under such circumstances, a constructive trust will be and is imposed by equity in order to restore to plaintiff the property of which she was thus deprived, the retention of which by the estate would result in an unjust enrichment.
For the reasons heretofore stated, the judgment of the trial court is hereby reversed with instructions to enter a judgment for plaintiff in conformity with this opinion.
Reversed and remanded with directions.