White v. Mulvania
| Decision Date | 18 December 1978 |
| Docket Number | No. 60329,60329 |
| Citation | 575 S.W.2d 184 |
| Parties | Grace WHITE, Dorothy Bennett Brooks, William A. Bennett, Lee Bennett and Gerald Bennett, Appellants, v. Walter L. MULVANIA, Executor of Estate of Mary Bennett, Deceased, Howard Wenger, Executor of Estate of Mary Bennett, Deceased, in Iowa, Joseph Lionel Smith, Cinthia Ann Smith, Saint Vincent Home, Harriett Garrett, John Garrett, John Gude, Clara Jean Gude, Hugh Gardner, and Alton Vogel, Respondents. |
| Court | Missouri Supreme Court |
Joseph L. Flynn, St. Joseph, for appellants.
Theodore M. Kranitz, St. Joseph, Stephen A. Lovejoy, Lincoln City, Or., for respondents.
This case was transferred here by the court of appeals, Kansas City district, because of the general interest and importance of the question involved and for clarification of the law in light of a possible conflict between its decision and O'Leary v. McCarty, 492 S.W.2d 124 (Mo.App.1973).
The case presents two issues. The first is whether plaintiffs have sufficiently pleaded fraud by alleging that the supposed wrongdoer misrepresented his state of mind to a testatrix, with whom he had an unspecified confidential relationship by making a promise to her, on which she relied, which he had no intention of fulfilling and in fact did not fulfill.
The second issue arises if the first is resolved affirmatively: whether a constructive trust may be imposed on innocent parties who receive property under a will where the devolution of such property to them was the result of actual or constructive fraud upon the testatrix.
The trial court dismissed the petition. The court of appeals reversed and remanded, as do we.
For the purpose of determining whether a cause of action was pleaded, we assume the facts to be as alleged by plaintiffs in their second amended petition. Plaintiffs plead that Mary Bennett, the testatrix, a resident of Missouri, died January 31, 1975 leaving a will executed January 6, 1972, which devised the residue of her estate to her only child, Lucy Ann Smith, who had died domiciled in Oregon on December 5, 1973, leaving as her heirs two adopted children, the defendants-respondents herein (hereinafter referred to as the defendants). 1
Plaintiff's petition then asserts:
that the children were not her heirs and that the portion of her estate directed to be distributed to Lucy Ann Smith would instead go to the plaintiffs, heirs at law of the testatrix if the children had been adopted by Lovejoy, and that "by reason of said fraudulent representations on the part of Stephen A. Lovejoy, . . . Mary Bennett, relying upon said false and fraudulent representations, was effectively induced not to change her Will so as to show her true intent and will." This resulted in denial to the plaintiffs, kindred of the testatrix's husband who would take if the adopted children were not heirs, of the property which they would have had but for Lovejoy's fraud. 4 Plaintiffs thus pray for imposition of a constructive trust on the property in favor of themselves as Mary Bennett's heirs at law.
While plaintiff's second amended petition is not a model of clarity, we conclude that upon a fair reading it does allege that Lovejoy was guilty of both actual and constructive fraud upon Mary Bennett, the testatrix. Either type of fraud if proved would entitle plaintiffs to a constructive trust of the property. A constructive trust is available to one who has been denied his right to property because of the wrongful actions of another. Skidmore v. Back, 512 S.W.2d 223 (Mo.App.1974). As is gone into below, the fact that third parties, the children, and not the wrongdoer, were beneficiaries of the fraud does not prevent imposition of a constructive trust.
Plaintiffs asserted a number of grounds for relief below, in addition to their request that a constructive trust be imposed. Both parties, particularly defendants, extensively briefed these issues on appeal. 5 Certain of these issues may become relevant upon remand should the plaintiffs persist in pressing their alternative grounds for relief. However, it is unnecessary for the court to reach these issues for the purposes of this appeal. If any set of facts are asserted which, if proved, would entitle the plaintiffs to relief, the motion of defendants to dismiss the plaintiffs' second amended petition must be denied. Watson v. Franklin Finance Co., 540 S.W.2d 186 (Mo.App.1976). If any of plaintiffs' alternative grounds for relief are sufficient "the pleading is not made insufficient by the insufficiency of one or more of the alternative statements." Rule 55.10.
Rule 55.15 requires that all averments of fraud state the circumstances constituting the fraud with particularity. It permits necessary conditions of mind, such as intent, to be averred generally. Id. Plaintiffs have stated with barely acceptable particularity the circumstances constituting the alleged promise by Lovejoy. They have also asserted both that after the time he made the promise he stated that he had no intention of fulfilling it, and that there was a confidential relationship between Mr. Lovejoy and the testatrix. Rule 55.05 has been interpreted liberally to give a pleading "the benefit of all inferences fairly deducible from the facts stated", Hall v. Smith, 355 S.W.2d 52, 55 (Mo.1962); Scheibel v. Hillis, 531 S.W.2d 285, 289 (Mo. banc 1976) for the purpose of permitting a petition to survive a motion to dismiss. We think that, by inference, plaintiffs have averred generally that Lovejoy did not intend to keep his promise when he made it and thus misrepresented his state of mind at the time he made the promise relied on by Mary Bennett.
Defendants assert that, even if the circumstances of the fraud were well-pleaded, a misrepresentation of a state of mind cannot by itself constitute actual fraud. Rather they say that actual fraud must be predicated on a misrepresentation of "a present or pre-existing fact, and . . . 'cannot ordinarily be predicated on unfulfilled promises or statements as to future events' ", Reed v. Cooke, 331 Mo. 507, 55 S.W.2d 275, 278 (banc 1932), and "It is not sufficient that the promisor, when making the promise, had no intention of fulfilling it, if the promise was as to an act to be performed in the future", Riss and Co. v. Wallace, 239 Mo.App. 979, 195 S.W.2d 881, 886 (1946).
While Reed and Riss have not been expressly overruled, we find that their application has been narrowed by later cases which hold that state of mind, or intent, is itself an "existing fact", the misrepresentation of which can constitute fraud. Dillard v. Earnhart, 457 S.W.2d 666 (Mo.1970); Wallach v. Joseph, 420 S.W.2d 289, 295 (Mo.1967), Cert. denied 389 U.S. 953, 88 S.Ct. 335, 19 L.Ed.2d 362 (1967); Musser v. General Realty Co., 313 S.W.2d 5, 10 (Mo.1958). To the extent that Reed v. Cooke and Riss & Co. v. Wallace, hold otherwise, they are no longer to be followed.
We think it was not necessary for the petition to specify whether the confidential relationship alleged was that of attorney-client or some other, for in equity a confidential relationship may be based on "a special confidence reposed on one side and resulting domination and influence on the other . . . with respect to property or business affairs . . ." Service Life Ins. Co. of Ft. Worth v. Davis, 466 S.W.2d 190, 196 (Mo.App.1971).
If such a confidential relationship can be proved at trial, proof of actual fraud is unnecessary. It is well established that the breach of a promise made during such a relationship will be considered constructively fraudulent because of the special reliance present. Service Life, 466 S.W.2d at 196; Swon v. Huddleston, 282 S.W.2d 18, 25-26 (Mo.1955); G. Bogert, Trusts and Trustees, §§ 482, 496 (2d rev. ed. 1978). Of course, plaintiffs will be required to prove at trial both the alleged breach of promise and the existence of the asserted confidential relationship.
Plaintiffs have thus alleged sufficient facts which, if proved, could permit the trial court to find actual or constructive fraud by Lovejoy. Assuming that fraud can be proved, the remaining question is whether this fraud can be the basis for imposition of a constructive trust on the adopted children of Lucy Smith.
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