Title: Wildfang-Miller Motors, Inc. v. Miller
Citation: 186 N.W.2d 581
Docket Number: 8673
State: north-dakota
Issuer: north-dakota Supreme Court
Date: April 22, 1971

186 N.W.2d 581 (1971) WILDFANG-MILLER MOTORS, INC., Plaintiff and Appellant, v. Arthur T. MILLER and Lucille Miller, Defendants, and Don Dralle and Evelyn Dralle, Intervenors and Respondents. Civ. No. 8673. Supreme Court of North Dakota. April 22, 1971. *583 Rausch &amp; Chapman, Bismarck, for plaintiff-appellant. Wolf &amp; Glaser, Bismarck, for intervenors-respondents. PAULSON, Judge. This is an appeal and a demand for a trial de novo by Wildfang-Miller Motors, Inc., from a judgment entered on August 14, 1969, in the District Court of Burleigh County, North Dakota, in an action brought by Wildfang-Miller Motors, Inc. [hereinafter Wildfang-Miller], against the defendants Arthur T. Miller and Lucille Miller [hereinafter Millers] to establish a constructive trust in favor of Wildfang-Miller. Thereafter the Millers defaulted and, subsequently, the intervening defendants, Don Dralle and Evelyn Dralle [hereinafter Dralles], commenced proceedings for intervention and as cross-complainants. On June 19, 1969, the Millers conveyed the tract of land which is the subject of this action, and which is alleged to be owned by the Dralles, to Wildfang-Miller. The trial court held that a constructive trust existed in behalf of the Dralles, and the judgment directed a reconveyance of the land to the intervening Dralles, subject to a mortgage in the sum of $24,000 plus accrued interest thereon at the rate of 6 per cent per annum held by Wildfang-Miller. The facts in this case involve three-quarters of a section of land located and described as the north half and the southeast quarter of section 9, township 137 north, range 76, west of the fifth principal meridian, Burleigh County, North Dakota. Wildfang-Miller, during all of the times herein mentioned, has been and is in the automotive and farm implement business in Steele, Kidder County, North Dakota. In 1965, Arthur T. Miller was an officer and director of Wildfang-Miller. Don Dralle, a farmer, had known Mr. Miller since Mr. Miller's childhood. Because Mr. Miller was a businessman, Mr. Dralle had consulted him on numerous occasions with reference to financial matters. Mr. Dralle, since 1949, had been a customer of Wildfang-Miller's in business transactions which included sales of various farm equipment and machinery; and the furnishing of repairs, supplies, and labor, for which, by 1965, Mr. Dralle's indebtedness to Wildfang-Miller had accrued in the sum of $7,000. During this time, Mr. Dralle had a contract for the purchase of the land in question from Neil Edwards, another farmer. Mr. Edwards also carried a large account with Wildfang-Miller. Wildfang-Miller cleared the accounts of Mr. Dralle and Mr. Edwards by agreeing to advance money to pay off Mr. Edwards and to cancel his debt to Wildfang-Miller, and in return to receive a mortgage from the Dralles as security for the amount of Mr. Dralle's indebtedness. The mortgage covering the land involved was in the amount of $24,000 as of September 13, 1965. Further cash advances were made, subsequent to the execution of the mortgage, by Wildfang-Miller to Mr. Dralle. On December 29, 1965, Mr. and Mrs. Dralle executed a warranty deed conveying the land in question to Mr. and Mrs. Miller. Thereafter, Mr. and Mrs. Miller quitclaimed the property involved to Wildfang-Miller. During the pendency of this action, Mr. Ramon Wildfang, an officer of Wildfang-Miller, testified that the Dralle land was not worth any more than the $26,000 which Wildfang-Miller already had invested in it. However, Mr. Miller's and Mr. Dralle's estimates of the value of the land ranged from $70 to $90 per acre, which would place its value in excess of $26,000. In addition, Mr. Dralle had made improvements on the land since the execution of the mortgage and the deed, which included the breaking of 200 acres of prairie land. Mr. Dralle testified, with reference to his meeting with Mr. Miller and particularly with reference to the execution of the deed to the Millers: Mr. Miller denies that any discussion of a trust agreement was had between the Dralles and himself during this meeting. In March of 1969, a notice of foreclosure of the mortgage in behalf of Wildfang-Miller was served upon the Dralles. The issue in this case is whether or not the conveyance on December 27, 1965, from Don Dralle and Evelyn Dralle to Arthur T. Miller and Lucille Miller of the described property created a constructive trust in favor of the Dralles, with the Millers being the trustees thereof. The relevant North Dakota statutes are: The general rule concerning the creation of a constructive trust is expressed in 54 Am.Jur. Trusts § 225, at page 173: Then, in § 226, at pages 173-174, it is stated: And, in § 233, at pages 178-179, it is stated: This general rule has long been followed in North Dakota. In McDonald v. Miller, 73 N.D. 474, 16 N.W.2d 270, 271 (1944), in paragraphs 1, 3, and 4 of the syllabus, this court held: In addition, this court, in Barker v. Barker, 75 N.D. 253, 27 N.W.2d 576, 577-578 (1947), in paragraphs 3, 5, and 7 of the syllabus, held: Cf. Sprenger v. Sprenger, 146 N.W.2d 36 (N.D.1966); Mechtle v. Topp, 78 N.D. 789, 52 N.W.2d 842 (1952); Rovenko v. Bokovoy, 77 N.D. 740, 45 N.W.2d 492 (1950). It should be noted that, in addition to the above-cited case law, our statutes, §§ 59-01-06 and 59-01-08, N.D.C.C., indicate that fraud is only one of the bases upon which a trust can be predicated. Fraud need not be proved, since the existence of a personal confidence is deemed sufficient to create a trust. Evidence clearly established, in the case at bar, that Mr. Miller and Mr. Dralle had known each other for the entire lifetime of Mr. Miller. Mr. Miller had been an adviser in financial matters to Mr. Dralle during the past several years. This evidence was primarily established through oral testimony given by Mr. Miller and Mr. Dralle at the trial. This court has repeatedly held that when an appellant demands a trial de novo and a retrial of the entire case in an appeal from a judgment in an action tried to the court without a jury, the findings of the trial court shall be given appreciable weight by the Supreme Court, especially where such judgment is based upon the testimony of witnesses who appeared in person before the trial court. Koistinen v. Farmers Union Oil Co. of Rolla, 179 N.W.2d 327 (N. D.1970); Renner v. Murray, 136 N.W.2d 794 (N.D.1965); Goheen v. Gauvey, 122 N.W.2d 204 (N.D.1963); Strobel v. Strobel, 102 N.W.2d 4 (N.D.1960). In addition to the evidence that the confidential relationship which existed between the Dralles and the Millers had been broken by Mr. Miller, there is ample evidence to indicate that Wildfang-Miller would be unjustly enriched, as both Mr. Miller and Mr. Dralle estimated the minimum value of the land involved at $70 per acre and the maximum value of the land at $90 per acre. The estimate of the minimum value of all of the land would then be $33,600, which is considerably in excess of the approximate $26,000 mortgage indebtedness. If the Dralles are in default, Wildfang-Miller has an adequate remedy at law in foreclosing the mortgage, and the Dralles' redemption rights would then be preserved. In addition, Wildfang-Miller has a remedy at law to recover the cash advances made to Mr. Dralle subsequent to the execution of the mortgage. For the reasons stated in the opinion, the decision of the district court is affirmed. STRUTZ, C. J., and KNUDSON, TEIGEN and ERICKSTAD, JJ., concur.