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Keywords

attorneytrustpower of attorneyconstructive trust

attorneytrustwillpower of attorneyappellantconstructive trust

Related Cases

Foster v. Schmitt, 429 Pa. 102, 239 A.2d 471

Facts

Ella Conway executed a power of attorney in favor of her companion, Margaret Morgan Schmitt, allowing Schmitt to manage Conway's savings account. In 1961, Schmitt withdrew the entire balance from Conway's account and deposited it into a new account solely in her name. Despite Conway's demands for the return of her money prior to her death, Schmitt claimed to have returned the funds, a claim the court found incredible. The court determined that a confidential relationship existed and that Schmitt had misappropriated the funds.

On August 27, 1957, Ella Conway, the decedent, had a sum of money in an account at the Western Savings Fund Society. It is undisputed that on that date she executed a power of attorney over the account in favor of her close friend and companion for many years, the appellant, Margaret Morgan Schmitt. On March 10, 1961, pursuant to this power of attorney, the appellant withdrew decedent's entire balance and redeposited it in a new account titled only in the appellant's name.

Issue

Did a confidential relationship exist between Ella Conway and Margaret Morgan Schmitt, and did Schmitt breach her promise to reconvey the funds, warranting the imposition of a constructive trust?

Rule

A constructive trust can be imposed when there is a confidential relationship, a promise to reconvey, and reliance on that promise, even if the transfer appears absolute.

Analysis

The court applied the rule by examining the nature of the relationship between Conway and Schmitt, noting that Schmitt had admitted throughout the proceedings that the money belonged to Conway. The court found that Schmitt's actions, including the withdrawal and subsequent claims of ownership, breached the promise to reconvey the funds. The court also highlighted the dependency of Conway on Schmitt and the understanding that the funds were to be returned upon request.

The court applied the rule by examining the nature of the relationship between Conway and Schmitt, noting that Schmitt had admitted throughout the proceedings that the money belonged to Conway.

Conclusion

The court affirmed the chancellor's decision to impose a constructive trust on the funds, ordering Schmitt to return $8,796.35 to Conway's estate.

Who won?

Margaret Foster, the executrix of Ella Conway's estate, prevailed because the court found that Schmitt had misappropriated the funds and breached her promise to reconvey them.

Margaret Foster (decedent's executrix, niece, and sole beneficiary under Ella Conway's will) was entitled to have a trust impressed upon the money found to have been misappropriated by appellant for her own use.

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Ford v. Long, 713 S.W.2d 798

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Procanik by Procanik v. Cillo, 97 N.J. 339, 478 A.2d 755

In re Estate of Finley, 141 Ill.2d 542, 580 N.E.2d 115 (Table), 162 Ill.Dec. 489

Singleton v. United States Gypsum Co., 140 Cal.App.4th 1547, 45 Cal.Rptr.3d 597, 06 Cal. Daily Op. Serv. 6133, 2006 Daily Journal D.A.R. 8758