With regard to interests in real property, a constructive trust generally may not be imposed based solely on a broken verbal promise to hold or transfer the land for the benefit of another. To hold otherwise would wholly undermine the Statute of Frauds. A broken verbal promise may be the basis of a constructive trust, however, if it was fraudulently made with the intention of being broken and for the purpose of thereby obtaining title. A constructive trust over real property has not been imposed where a plaintiff made no allegation that a verbal promise was made with an intention of later breaking it.
Sisters Miriam and Sarah Jenkins appealed from the trial court's denial of their motion for judgment notwithstanding the verdict (JNOV) following a jury trial. The issue tried by the jury was ownership of bank accounts which had been opened by Frances Jenkins, the deceased mother of Miriam, Sarah, and their six siblings, following the death of Frances' husband. The accounts were opened jointly with Miriam (Wachovia Bank in Augusta, GA) and Sarah (First State Bank in Wrens, GA) with right of survivorship. In 1999, thirty years after the husband's death, the Department of Transportation (DOT) began condemnation proceedings on a portion of the family homestead, and DOT paid $53,550 to Frances, who deposited the moneys into the First State account. After Frances died in 2001, five of the remaining children contended that the accounts were subject to a constructive trust in favor of the estate.
Were the accounts in question subject to a constructive trust in favor of the estate?
Yes, with respect to the joint accounts.
The appellate court held that there was evidence supporting the imposition of a constructive trust on the joint account titled in the mother's and the sister's names because the account was opened for the mother's convenience. There was nothing to support a constructive trust over the condemnation proceeds. Frances did not make any agreement with the children as to the condemnation proceeds or make any promise intending not to carry it out. The documents signed by the siblings were unequivocal and unrestricted. There was nothing to indicate that Frances did not intend to open joint with right of survivorship accounts when she opened the accounts. Further, the siblings did not raise a constructive trust issue in the condemnation proceedings and were now collaterally estopped from raising it. The joint account titled in the names of the Frances and the executrix was also intended by Frances to be a joint account with right of survivorship accounts.