Prince v. Bryant

• Decision Date: 27 February 1979
• Docket Number: 76-394,Nos. 76-393,s. 76-393
• Parties: Marie PRINCE, Plaintiff-Respondent, v. Debra BRYANT, Defendant-Appellant (two cases).
• Court: Wisconsin Supreme Court

Page 676

275 N.W.2d 676

87 Wis.2d 662

Marie PRINCE, Plaintiff-Respondent, v. Debra BRYANT, Defendant-Appellant (two cases).

Nos. 76-393, 76-394.

Supreme Court of Wisconsin.

Argued Jan. 2, 1979.

Decided Feb. 27, 1979.

Debra Bryant, defendant-appellant, appeals from a judgment entered in a summary judgment proceeding which imposed a constructive trust on the proceeds of two life insurance policies for the benefit of Marie Prince, plaintiff-respondent. Judgment was entered on motion of the respondent.

The policies were issued on the life of Cleon Prince, deceased. The respondent, Marie Prince, is the estranged wife of the deceased, and the appellant, Debra Bryant, his sister.

John Hancock Mutual Life Insurance Company and Metropolitan Life Insurance Company, defendants in the original proceedings, have paid the proceeds of their respective policies into court, the actions against them have been dismissed and they are not parties to this appeal.

Robert Michelson, Racine, for defendant-appellant.

Thomas J. Misfeldt, Robert E. Hankel and Schoone, McManus & Hanson, S. C., Milwaukee, for plaintiff-respondent.

HANSEN, Justice.

The single issue in this case is whether the trial court abused its discretion in entering judgment in a summary judgment proceeding which imposed a constructive trust on the insurance proceeds for the benefit of decedent's widow because the decedent removed his wife as beneficiary while a temporary order of a family court commissioner was in effect and which had enjoined and restrained the parties from disposing of their property pending a divorce proceeding.

This litigation arises out of an unusual factual situation. Cleon and Marie Prince were married on June 4, 1971. No children were born of the marriage. Marie Prince, respondent, commenced a divorce action on May 20, 1974. While the divorce action was pending, on November 8, 1974, Cleon was fatally shot. At the time of his death it appears he was twenty-six years of age, and the respondent was thirty-three years of age.

In the trial court the validity of this marriage and the jurisdiction of the trial court were challenged because the marriage was entered into in Illinois during the six-month waiting period following the previous divorce of Marie Prince. This challenge is not made on appeal.

On May 30, 1974, the family court commissioner issued a temporary order which provided in part:

"(7) That both parties are hereby enjoined and restrained from disposing of or encumbering any of his or her or their property or removing any property out of this state."

Cleon was not represented by counsel at the hearing on the temporary order and the order did not specifically refer to any life insurance policies. At the time of the temporary order the deceased owned two life insurance policies and the respondent was the named beneficiary in both of them. One policy was carried through his employer. The other policy had been purchased by the deceased in July, 1970, before his marriage to the respondent, and his mother was originally named as beneficiary. Because of accidental death and double indemnity provisions of the policies the aggregate amount of the proceeds was $50,000.

Subsequent to the May 30, 1974, temporary order and prior to September 18, 1974, the deceased changed the named beneficiary of each policy from respondent to the appellant. On September 18, 1974, the respondent and Cleon entered into a property settlement stipulation in the then pending divorce proceeding. The stipulation provided for a division of the property of the parties and included the residence, two automobiles, household furnishings and personal effects, and a division of responsibility for payment of debts. The stipulation contained no provisions for payment of alimony and did not refer to the life insurance policies.

Cleon Prince died November 8, 1974, before further proceedings were had in the divorce action.

There is nothing in the record to indicate that either the respondent or the appellant knew Cleon had changed the name of beneficiaries in the two life insurance contracts prior to his death.

Since this case is before the court on appeal from a summary judgment the standard of review is whether the trial court abused its discretion in granting respondent's motion for summary judgment. This court can reverse the trial court's order only if the trial court incorrectly decided a legal issue or material facts are in dispute. Am. Orthodontics Corp. v. G. & H. Ins., 77 Wis.2d 337, 341, 342, 253 N.W.2d 82 (1977).

". . . summary judgment is a drastic remedy and should not be granted unless the material facts are not in dispute, no competing inferences can arise, and the law that resolves the issue is clear. . . ." Lecus v. American Mut. Ins. Co. of Boston, 81 Wis.2d 183, 189, 260 N.W.2d 241, 243 (1977). ¹

A constructive trust is imposed by a court of equity to prevent unjust enrichment arising when one party receives a benefit the retention of which would be unjust as against the other. Richards v. Richards, 58 Wis.2d 290, 296, 297, 206 N.W.2d 134 (1973); Estate of Massouras, 16 Wis.2d 304, 312, 313, 114 N.W.2d 449 (1962). This court has quoted with approval the Rule of Restatement of Restitution, sec. 160 (1937):

" § 160. CONSTRUCTIVE TRUST.

"Where a person holding title to property is subject to an equitable duty to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain it, a constructive trust arises."

Gorski v. Gorski, 82 Wis.2d 248, 254, 262 N.W.2d 120 (1978), and cases cited therein. Meyer v. Ludwig, 65 Wis.2d 280, 285, 222 N.W.2d 679 (1974).

However, in defining the elements necessary to invoke the equitable doctrine of constructive trust this court has consistently said that unjust enrichment in itself is not sufficient and that some additional factor must be shown. Gorski v. Gorski, supra, 82 Wis.2d at 254, 262 N.W.2d 120. Additional factors suggested have included actual or constructive fraud, duress, abuse of confidential relationship, mistake, commission of a wrong or any form of unconscionable conduct. Id., at 255, 262 N.W.2d 120. Meyer v. Ludwig, supra, 65 Wis.2d at 286, 222 N.W.2d 679. It has also been held that the unconscionable conduct must be that of the person against whom the constructive trust is to be imposed. Gorski, supra, 82 Wis.2d at 255, 262 N.W.2d 120; Estate of Schmalz, 58 Wis.2d 220, 228, 206 N.W.2d 141 (1973). Since the doctrine of constructive trust is an equitable remedy, this last rule has not been strictly applied and in imposing the doctrine each case must be considered in the factual situation presented. This is such a case. The appellant, an innocent beneficiary, and not in any sense a purchaser for value, was, in fact, enriched, although not because of any unconscionable conduct on her part.

Equitable remedies must, of necessity, place heavy reliance on the facts of the particular controversy. We examine the facts of some of those cases which have come to our attention involving an innocent beneficiary and which have been held to support the imposition of a constructive trust.

In Richards v. Richards, supra, the court imposed a constructive trust on life insurance proceeds where the decedent named his second wife as beneficiary in violation of an express provision in a divorce judgment ordering him to maintain his children as the beneficiaries. The court also stated that the second wife was not a bona fide purchaser and concluded that the decedent's violation of the divorce decree was sufficient to justify the imposition of a constructive trust.

In Lee v. Preiss, 18 Wis.2d 109, 118 N.W.2d 104 (1962), this court reversed the trial court's dismissal of the complaint where the decedent had promised his first wife that he would keep the policy in force for his daughters in exchange for her promise not to compel payment of the child support arrearage. The court said these promises plus the fact that the named beneficiary had furnished no consideration and knew of the promises would be sufficient to impose a constructive trust.

In Estate of Boyd, 18 Wis.2d 379, 118 N.W.2d 705 (1963), the court allowed the claim of the decedent's ex-wife against his estate in the amount of the life insurance proceeds where he had changed the name of the beneficiary from his ex-wife to his estate, contrary to a divorce decree. The provision was part of the property division and no mention is made of alimony or child support.

In Truelsch v. Miller, 186 Wis. 239, 202 N.W. 352 (1925), the court imposed a constructive trust on life insurance proceeds in favor of the corporation from which the decedent had embezzled funds which were used, in part, to pay the premiums. The court stated that the decedent's widow, who was the named beneficiary, was made aware of the crime following her husband's death.

In McIntyre v. Cox, 68 Wis.2d 597, 229 N.W.2d 613 (1975), the court refused to impose a constructive trust on a parcel of real estate because the titleholders had paid full value for their interest and therefore, as bona fide purchasers, were not unjustly enriched.

Similarly, in Estate of Schmalz, 58 Wis.2d 220, 206 N.W.2d 141 (1973), the court also refused to impose a constructive trust because there was no unjust enrichment. The court gave two reasons. First, the court said the beneficiary of the decedent's estate had not engaged in any unconscionable conduct. Second, the court said the beneficiary had not been unjustly enriched by the bequest because the decedent had no duty to leave everything to the residuary legatees.

In Meyer v. Ludwig, supra, the respondent's mother had promised to leave the farm to the respondent in exchange for certain labor and services. Respondent kept her promise and made various improvements to the farm. However the mother left the farm to her husband instead of the respondent. The court imposed a constructive trust and considered important the additional...