Court Opinion

ID: 7880631
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:23:18.190951+00
Date Added: 2024-06-11T09:14:11.524815
License: Public Domain

While I agree with the result, I write separately because I believe it appropriate to address appellant's second issue as well as the statute of limitations argument. I would reverse appellant's conviction on the basis of insufficient evidence of the crime charged.
Appellant was charged under a statute that makes it a crime to retain possession of another's movable property without the other's consent. Minn.Stat. § 609.52, subd. 2(1). To establish that appellant improperly retained the Swors' money, the state must first show that the money remained the Swors' property while in appellant's possession. Id. To accomplish this, the state must show the existence of a trust relationship between the parties.
To establish that appellant held the Swors' money as a trustee, it must be shown that the parties: (1) designated appellant as a trustee subject to enforceable duties, (2) designated the Swors as beneficiaries with enforceable rights, and (3) paid the money to appellant as a definite trust res, so that, while appellant had legal title, the Swors had a beneficial interest. See In re Bush's Trust, 249 Minn. 36, 43,81 N.W.2d 615, 620 (1957) (discussing the three essential elements of an express trust). The state did not prove those elements and it made no effort to do so.
A debt is not a trust because it involves no fiduciary relationship between the parties. Farmers State Bank of Fosstonv. Sig Ellingson Co., 218 Minn. 411, 418, 16 N.W.2d 319, 323
(1944). The difference between a trust and a debt lies primarily in the fact that a trust beneficiary holds a beneficial interest in the trust property, while a creditor has only a personal claim against the debtor. Id.
The parties' manifest intentions dictate whether a particular transaction has resulted in a debt or a trust. Id. Thus, where one party pays money to another, a trust is created only if the parties intended that the money be held or used to benefit the payer or someone else. Id. On the other hand, a debt is created if the parties intended that the person receiving the money has unrestricted use of it and is only liable to pay a similar amount back to the payer or to a third person. Id.
There was no evidence at trial to show appellant held the 50 percent pay-in-advance checks as a trustee for the Swors. Rather, the evidence shows the Swors paid appellant to order and deliver furniture and accessories for the Swors' residence, much as traditional retailers do on a pay-in-advance contract.1 *Page 639 
Appellant § as the Swors' expected § ordered merchandise in her own name or the name of her firm, not in the Swors' name. Similarly, the Swors' checks were made out to appellant rather than to the various manufacturers and vendors of the merchandise or to a trust account.
The Swors' payments became appellant's money upon receipt, and the Swors became appellant's creditor, rather than beneficiaries of a trust. Appellant was not handling the Swors' money, she was handling her own money, for which she promised to deliver merchandise. See id. ("Where money paid to another is not required to be segregated by the payee and held as a separate fund for the benefit of the payor, there is no trust."). When the merchandise was not delivered, appellant breached the contract, but she did not violate the theft statute.
In short, appellant was convicted of stealing her own money.
1 The majority errs in its reliance on State v. O'Hagan,474 N.W.2d 613 (Minn.App. 1991). Appellant's actions here stand in stark contrast to the actions of the defendant in O'Hagan. There, an attorney took $500,000 in escrow funds that had been wired directly to his law firm's "general trust account." Id. at 616. And the attorney subsequently transferred the money to a separate, interest-bearing trust account entitled "Dorsey 
Whitney as trustee for Northrup King." Id. at 616. But here, the Swors' never directed that funds be placed into a trust account, nor did they intend for appellant to act as trustee; the Swors wrote checks payable to appellant, personally, so she could purchase furniture and accessories — her stock in trade — for delivery to the Swors.