Olsen v. First Nat. Bank

• Decision Date: 24 June 1957
• Docket Number: No. 9609,9609
• Citation: 83 N.W.2d 842,76 S.D. 605
• Parties: Frank G. OLSEN, Plaintiff and Respondent, v. FIRST NATIONAL BANK, a corporation, Executor of the Estate of Mabel E. Olsen, Deceased, Defendant and Appellant.
• Court: South Dakota Supreme Court

Page 842

83 N.W.2d 842

76 S.D. 605

Frank G. OLSEN, Plaintiff and Respondent, v. FIRST NATIONAL BANK, a corporation, Executor of the Estate of Mabel E. Olsen, Deceased, Defendant and Appellant.

No. 9609.

Supreme Court of South Dakota.

June 24, 1957.

Boyce, Warren, Murphy & McDowell, Sioux Falls, for defendant and appellant.

Louis H. Smith, Sioux Falls, for plaintiff and respondent.

ROBERTS, Judge.

Plaintiff brought this action against defendant bank as executor of the estate of Mabel E. Olsen, deceased, to recover the sum of $2,600.

John A. Olsen executed his last will and testament in due form on October 5, 1942. Paragraph V of the will reads as follows: 'Subject to the life estate in favor of Mabel E. Olsen, I give, devise and bequeath unto Frank Olsen of Sioux Falls, South Dakota, the forty (40) acre farm owned by me and located in Turner County, South Dakota, and in the event of sale and conveyance of said premises by my life tenant and the proceeds of the sale of said premises cannot be readily identified, then this legacy to lapse, otherwise to remain in full force and effect.'

On June 1, 1943, John A. Olsen and his wife by a warranty deed conveyed the forty acre tract to Ernest A. Larsen for a consideration of $2,600.

On November 6, 1944, John A. Olsen, his wife Mabel and his brother Frank met in Sioux Falls. Mrs. Olsen was present during all the time of a conversation between the brothers in an automobile parked near the Shriver-Johnson store. John A. Olsen at that time wrote out and handed to his brother a statement reading as follows:

'South of Shriver Johnson Store

Nov 6 1944----

'in an agreement, John A. Olsen and Mrs. John A. Olsen and Frank G. Olsen we have divided our Estate in 1/2. My share goes to Bros Sisters neices-nehpews and you Frank recd $2600, for Turner County Farm which I sold for $65 pr. acre and this is your money Frank no one can take this away from you this is my wish.

John A. Olsen.'

At the same time there was made and delivered to the brother what purports to be a check as follows:

'Sioux Falls, So. Dak. Nov. 6 1945 No. ___

'First National Bank & Trust Company 78-2

'Pay To The Order of Frank G. Olsen $2600 Twenty Six Hundred Dollars

John A. Olsen

Pd in full. for 40 acres sold for $65.00 pr acre and. to be cashed after my wifes death.'

Plaintiff received a letter dated December 16, 1944, from his brother John, in which after expressing his appreciation for work done by plaintiff, he said: 'therefore Frank that was the reason I gave you the check for the Turner County farm. That was the day you come up from Goldfield Nov. 6 1944 and I dated the check ahead either 1945 of 46. but just the same you are to have the money. it will be left in the bank for you and Mabel cant even take the money from bank and my bank is The First National Bank and Trust Co. and I also willed you Gov. Bonds and Gov. Stamps but Frank you are to leave every thing alone until I am dead also Mabel. after Mabel is Dead you can take this letter to Pankow the Adm. and show him and if you dont recd Bonds and Stamps you can get along with the $2600 check but my wish is for you to received every thing I willed you and I am sure Pankow will see that you receive this like you go down to Bank and ask him for a check book. You have done more for me than any one of my Bros. and Sisters.'

Plaintiff received a typewritten letter dated March 7, 1945 and addressed to him at Goldfield, Iowa, from his brother. At the bottom of this letter in John's handwriting is the following: 'Frank be sure to take care of check I gave you on Nov 6, 1944 and this is for Farm in Turner County pd in full no selling. this is my wish to you Frank. cash it after my wifes death. show this to Pankow your administrator.'

John A. Olsen, died on March 25, 1945. The First National Bank & Trust Company, Sioux Falls, qualified as executor. The assets of the estate were appraised at $10,503.96. The final decree was entered February 4, 1946, assigning to the surviving wife all the property either absolutely or for life coupled with a power of sale. Mabel E. Olsen died on October 20, 1954. The assets of her estate were appraised at $75,188.52. Frank G. Olsen presented a claim for $2,600 to R. A. Pankow, trust officer of defendant bank named as executor. After hearing, the county court on July 25, 1955, made an order rejecting the claim.

The cause came on for trial and subsequently the court made findings in favor of plaintiff and decreed a constructive trust. The trial court filed an opinion from which we quote:

'From this record it seems apparent that Ex. 1, in the form of a check, is not effective as a check and was not intended by John A. Olsen to be presented and paid as a check is usually presented and paid. It was post-dated. No provision was made in the bank account to cover it. It was to be presented to Mr. Pankow, trust officer of the bank which was executor of both estates. The wife was to have use of the $2600 during her life and plaintiff was not to receive the amount until after the death of Mabel. * * * 'If the transaction were an attempt to make a testamentary disposition of the $2600 it was ineffective as such because the writings involved were not executed in compliance with the formalities required by statute.

'By the various writings John A. Olsen clearly expressed his purpose and intention that the plaintiff should have the amount of $2600 from his property after the death of his wife. The evidence in connection with the delivery of the check Ex. 1 and the written memorandum Ex. 2 shows that Mabel E. Olsen knew of and acquiesced in the arrangement. She knew that the $2600 was the consideration received upon conveyance of the 40 acres by her husband and herself and that the devise of the 40 acres to the plaintiff lapsed on account thereof. She knew that her husband intended plaintiff should have $2600 after her death in lieu of the 40 acres subject to her life interest. * * *

'There are no rights of creditors involved. The evidence is clear, satisfactory and convincing that John A. Olsen intended the his brother, the plaintiff, should have the $2600 after the death of himself and his wife. The wife knew of such purpose and the arrangement made and acquiesced therein. To prevent unjust enrichment of the wife's estate contrary to the intention of the husband a Court of equity should establish and declare an implied, resulting or constructive trust for benefit of the plaintiff to the amount of $2600 in possession of the defendant executor.'

Defendant appeals and urges (1) that the evidence does not sustain the findings of fact; (2) that the claim arising upon contract and payable from the assets of the estate of John A. Olsen is now barred by statute; (3) that necessary and indispensable parties were not before the court; and (4) that statements made by decedents to plaintiff were inadmissible.

Appellant asserts that the evidence does not supply the essential elements of a constructive trust and that the trial court erred in decreeing such trust in favor of the plaintiff. Cases have been cited by counsel for appellant in support of their contention that no money belonging to the plaintiff was traced and identified as a separate entity or as a part of an identifiable fund. While it is necessary that there be a res or specific fund on which the trust may be fixed, a constructive trust is not a title to or lien on property and in fact does not exist so as to affect property held until it is declared by a court of equity as a means of affording relief. International Refugee Organization v. Maryland Drydock Co., 4 Cir., 179 F.2d 284. It is not technically a trust. In re Zech's Estate, 69 S.D. 51, 6 N.W.2d 432; In re National Benefit Ass'n, 72 S.D. 23, 29 N.W.2d 81; Schwartzle v. Dale, 74 S.D. 467, 54 N.W.2d 361; In re Farmers State Bank of Amherst, 67 S.D. 51, 289 N.W. 75, 80, 126 A.L.R. 619. In the case last cited, the following comment from...