Terry v. West

• Decision Date: 14 June 1988
• Docket Number: No. 18A04-8708-CV-238,18A04-8708-CV-238
• Citation: 524 N.E.2d 343
• Parties: Linda J. TERRY and David J. Storie, Appellants (Plaintiffs Below), v. Cora E. WEST, Appellee (Defendant Below).
• Court: Indiana Appellate Court

Page 343

524 N.E.2d 343

Linda J. TERRY and David J. Storie, Appellants (Plaintiffs Below), v. Cora E. WEST, Appellee (Defendant Below).

No. 18A04-8708-CV-238.

Court of Appeals of Indiana,

Fourth District.

June 14, 1988.

Rehearing Denied Aug. 16, 1988.

Robert S. Koor, Muncie, for appellants.

Richard W. Weir, Alexander & Reed, Muncie, for appellee.

MILLER, Presiding Judge.

In 1983, siblings Linda J. Terry, age 34, and David J. Storie, age 32, brought this action against their 73 year old maternal grandmother, Cora E. West, claiming that 27 years earlier--in 1956--their maternal grandfather and legal guardian, Herbert West, used their funds to purchase a 28 acre tract including a farmhouse. They sought to impose a constructive trust on the remaining 19 acres which had passed to Cora as the surviving owner upon the death of Herbert in 1970. The trial court made findings of fact and concluded that the wards had failed by clear and distinct evidence to establish facts which supported a finding that a constructive trust existed. The grandchildren appeal, claiming for the most part that 1) undisputed evidence that Herbert failed to account for funds received in their behalf, 2) evidence by three witnesses that he had acknowledged before his death that he had used the children's money to purchase the property in question, and 3) the timing of the purchase, all established that a trust should have been imposed or, in the alternative, caused the burden of proof to shift to Cora. Cora West did not file an appellee's brief.

We affirm.

FACTS

Linda and David were orphaned at ages 4 and 2, respectively, when both their parents were killed in separate automobile accidents in 1953. They were taken in by their maternal grandparents, Herbert and Cora West, and raised by them to maturity. Herbert was appointed their legal guardian in 1953 and it is undisputed that he received on their behalf $11,280 from 1953 to January 1956, all before the property in question was purchased. Before the purchase, Herbert had also received about $2,455 in Social Security payments. The farm in question was deeded to Herbert and Cora West in May of 1956. There were no financial documents or records which revealed the details of the transaction, such as the price paid or where the money came from to pay for the property. Actually, Cora West represented that she had no financial records of that period. Herbert West never made an accounting of the money he received as guardian. The record reveals that the only actions taken in the guardianship were: (1) the appointment of Herbert as guardian (with no inventory) and the filing of a $1,000 bond on August 26, 1953; (2) the petition to terminate the guardianship, alleging the money had been dissipated, filed by plaintiff, David Jackson Storie, on September 15, 1975; and (3) the closing of the guardianship on September 29, 1975 supported by an affidavit by Irene Krouse, the eldest surviving daughter of the Wests, stating that, based on her personal relationship and not on any records of any kind, the monies received by the guardian had been used for the use and benefit of the wards and no money remained.

The court made the following pertinent findings of fact:

"5. The Court further finds that Herbert West and Cora West from the years 1953 through 1968 were employed gainfully and without question derived a substantial amount of income from their employment.

6. That during the same period of time, they provided the care, maintenance and support of the Plaintiffs in this cause. That over the period of time from 1953 to 1968, being approximately thirteen (13) years the Wests had received some Fifteen Thousand Seven Hundred Thirty-five ($15,735.00) Dollars in Social Security benefits and also had available for the payment of funeral and other bills of the deceased parents of the plaintiffs a sum of money of approximately Ten Thousand ($10,000.00) Dollars. There is a total lack of evidence in this cause to show what amount was spent by the Wests on the plaintiffs in supporting or maintaining them.

7. That the evidence clearly shows that during this same period of time the Wests owned one (1) piece of property which they sold and ultimately purchased the twenty-eight (28) acres of ground in Delaware County, Indiana.

8. That there was a great deal of parole (sic) and contradictory evidence as to whether or not Mr. West had used the funds belonging to the Plaintiffs to purchase the twenty-eight (28) acres of real estate. The plaintiff, Linda J. Terry, testified that she confronted her grandfather, Herbert West, who admitted that he used her money to purchase the real estate and that he would convey it to her. Yet, within a very short period of time she accepted a deed to one (1) single lot. This is typical of the contradictory evidence from all of the various members of the family saying "yes" or "no" that the money had, in fact, been so used. There is no direct evidence tending to prove that Herbert West used the assets belonging to Linda J. Terry or David J. Storie to purchase the real estate in question.

9. That the best that the plaintiffs evidence has done is to prove that Mr. West had an opportunity to use their funds for the purchase of the real estate.

10. That in order to find that the evidence of the Plaintiff is sufficient to carry their burden of proof by parole (sic) evidence alone, it must appear that such evidence is not compatible with any other result. The evidence to support a constructive trust which the plaintiff seeks must possess the qualities of clearness, fullness and persuasiveness required to substantiate the plaintiff's claim as a beneficiary.

11. We do not know what amount of money Herbert West may have spent for medical attention or burial of their parents nor how much money he would have spent to keep his wards and provide them support and care. He could have used their funds as they claim, however, the mere opportunity to do so does not make Mr. West guilty of the wrong claimed nor does it carry the burden of proof which must rest upon the plaintiffs to prove by clear and persuasive evidence the existence of the factual situation necessary to come within the statute. Without such proof it is necessary to hold against the plaintiffs." ¹

(Record at 32-34.)

As noted earlier, the 28 acre farm (the Yorktown farm) was purchased in 1956, at which time, in addition to the grandchildren, Herbert and Cora's six children and two of their spouses moved into the Yorktown property. The record indicates that Linda remained with her grandparents for 13 years, and David several years longer. Over the years Herbert and Cora deeded certain portions of the property to their children and a lot to Linda and Jerry Terry. At the time of the trial, there were about 19 acres remaining on the tract.

The evidence which the grandchildren claim renders the court's judgment contrary to law consists mainly of alleged admissions made by Herbert. Linda testified that in 1969, she, in the presence of her husband, asked Herbert what had happened to her money, and he replied that it was used to purchase the Yorktown farm. Her testimony was corroborated by her husband Terry. In addition, Mary Ruth West, the children's aunt by marriage, testified that she had a conversation with Herbert, with her husband Raymond West present, and Herbert stated he had to use the children's money to help purchase the farm. At the time of trial, Mary Ruth West had been estranged for many years from her husband who testified that no such conversation ever took place.

On the other hand, two of the children of Herbert and Cora, Raymond West and Virginia Koons, testified that, although they did not have documentary evidence, their father had never admitted or acknowledged using the children's money for that specific The grandchildren in their brief claim that they established a prima facie case and therefore the burden shifted to Cora to establish that Herbert did not use the money to purchase the farm. A review of the pertinent law does not support their theory.

purpose and that he did not need their money for the purchase of the Yorktown property. Cora West testified that her husband never stated he used the money for the purchase of the Yorktown property.

DISCUSSION AND DECISION

First of all, we have no disagreement with the grandchildren's argument that a legal guardian is accountable for the funds of his wards. In a proper forum, such as a guardianship proceeding or an action against the estate of the guardian, the wards need only show that the guardian received the wards' funds and the burden then shifts to the guardian to account for the funds or suffer a judgment for those monies not accounted for. This is not the situation here. Rather, the wards are trying to establish that a specific portion of their funds was used by their guardian to acquire a specific parcel of land in the guardian and his wife's names. Our supreme court has addressed the situation now before us in Pillars v. McConnell (1895), 141 Ind. 670, 40 N.E. 689 (a case cited in the grandchildren's brief). In that case, the allegations of the complaint were stated as follows:

"That in the year 1870, while appellant was an infant of tender years, the sum of $293.11, being her share of the proceeds of certain real estate sold by a commissioner, came into the hands of her guardian, one John McConnell, who received and held the same in his capacity as guardian; that upon the receipt of said money said guardian commingled the same with his own money, and with this money purchased the real estate in controversy, part of the purchase-price thereof being paid out of said trust fund; that said guardian took the deed for said lands in his own name, and continued to hold the same as his own until the date of his death, to wit, January 28, 1875; that an administrator of the estate of McConnell was appointed. Two-thirds of the real estate in question were sold...