I concur with the opinion of Mr. Justice Freebourn and his disposition of the issues in the case except for his determination of the ownership of the bank account deposited in the Metals Bank of Butte in the defendant's name and I agree with the result there reached but for the reasons set forth below.
The facts are amply covered in the majority opinion and in Mr. Chief Justice Adair's dissent. An examination of those facts shows a direct conflict as to the intention of the plaintiff in making the deposit. The plaintiff testified that he placed all the property in his wife's name with the understanding that she would have it in the event of his death; that she would have no present interest in it and would upon request return it to him. The defendant testified that there was no understanding "between my husband and me that I was to transfer any of the property to him."
While the record is not as clear as might be desired, it is a reasonable inference that the money received from the sale of the Five Mile property was deposited in defendant's account and then drawn out by her to pay the purchase price of the ranch at Silver Star. The $2,040 which is the subject of the court's findings is other money deposited by the plaintiff to the defendant's account from his earnings or that he had inherited.
Such a transaction between husband and wife is presumed to be a gift. Bingham v. National Bank of Montana, 105 Mont. 159, *Page 61 72 P.2d 90, 113 A.L.R. 315; Bast v. Bast, 68 Mont. 69,217 P. 345. But the presumption is rebuttable. Kranjcec v. Belinak,114 Mont. 26, 132 P.2d 150; 2 Bogert, Trusts Trustees, sec. 459, page 1394.
If there is a promise to reconvey or a contemporaneous agreement that the wife is to hold the property for the beneficial use of the husband it is not a gift but a trust. Because of the confidential relationship between husband and wife the law recognizes such a trust. 54 Am. Jur., "Trusts," sec. 233, p. 178; Opp v. Boggs, 121 Mont. 131, 193 P.2d 379; Thompson v. Steinkamp, 120 Mont. 475, 187 P.2d 1018. Such a trust is created by operation of law and may be proved by parol testimony. First State Bank v. Mussigbrod, 83 Mont. 68, 91, 271 P. 695; Stauffacher v. Great Falls Public Service Co., 99 Mont. 324,43 P.2d 647.
To establish a resulting or constructive trust a stricter standard of proof is required than in an ordinary civil case. "The proof must be clear, convincing, satisfactory, and `practically free from doubt'." Meagher v. Harrington, 78 Mont. 457,475, 254 P. 432, 438.
In McQuay v. McQuay, 81 Mont. 311, 263 P. 683, 686, the action was instituted by a father to have his son declared trustee of certain property purchased by the father and title placed in the name of the son. The court there said: "It is also true that evidence to establish a trust must be clear, convincing and satisfactory and practically free from doubt. When is the evidence of that character? The answer must be that if it has satisfied the conscience of the chancellor before whom the trial was had, and this court cannot say that the evidence clearly preponderates against the finding the requirement must be held to be satisfied. We must follow the oft-repeated rule that this court will not overturn the findings of the trial court unless there is a decided preponderance of the evidence against them; and when the evidence, fully considered, furnishes reasonable grounds for different conclusions, the findings will not be disturbed. (Citing cases.) It must be remembered that a preponderance of the evidence *Page 62 may be established by the testimony of a single witness against a greater number of witnesses who testified to the contrary. (Citing cases.)"
In Stauffacher v. Great Falls Public Service Co., supra, it was argued that the evidence to establish the trust was only that of the plaintiff and was uncorroborated and therefore did not meet the strict standard required. The court cited the above quotation from McQuay v. McQuay, supra, and said [99 Mont. 324,43 P.2d 651]: "The trial court heard the case and found in favor of the plaintiff, and we are unable to say that the evidence preponderates against the decision. It satisfied the conscience of the trial judge, and there was sufficient evidence, if believed, as it was, to support the findings and judgment declaring a resulting trust in the lands in favor of the plaintiff." See Walker v. Walker, 254 Pa. 220, 98 A. 890; Miller v. Miller, 272 Ill. 468, 112 N.E. 331.
The following language from Harris v. Gurley, 80 F.2d 744,748, C.C.A. (5th) 1936, is equally applicable to the instant case: "The case presented a square issue of credibility, and we will not overrule those who saw and heard the witnesses testify. It is true that a parol trust must be proven by clear and convincing evidence. (Citing authority.) But that does not mean that the evidence must be without contradiction. If the court is convinced by clear evidence that the trust exists merely disputing the evidence will not defeat the trust."
The rule that this court will consider the fact that the trial judge heard the witnesses testify, observed their manner and demeanor and was in a better position to resolve conflicts than we are is especially important in this case because of the scanty record which contains only remembered summaries of the testimony and is not in the witnesses' own words. Gilmore v. Ostronich,48 Mont. 305, 137 P. 378; Koopman et al. v. Mansolf, 51 Mont. 48,149 P. 491.
There is substantial legal evidence in the record to sustain the finding of the trial court that the plaintiff owned the $2,040 in the Metals Bank. Since the defendant's title was only that of *Page 63 a trustee and the plaintiff was the beneficial owner, equity will trace the property into its product. In case it is impossible to trace it the beneficiary is entitled to a money judgment against the original wrongdoer. See dissenting opinion in Brownback v. Nelson, 122 Mont. 525, 206 P.2d 1017, for a collection of authorities on this point.
However, it is contended that the complaint does not state a cause of action for the imposition of a trust. The allegation "that plaintiff having trust and confidence in said defendant allowed and permitted the record title to said personalty and realty to be in the name of the defendant although said defendant had and has no interest in and to said property or any part thereof" is sufficient.
Where a confidential relationship is relied upon, the existence of the relationship is sufficient to establish the constructive trust. 5 Bancroft, Code Pleading, sec. 2398, p. 4390. The complaint identifies the property claimed, alleges that it is the property of the plaintiff, alleges that the property was put in the name of the defendant because of the confidential relationship and the confidence was violated by the defendant's withdrawing the funds against the will and without the consent of the plaintiff. That is enough to state a cause of action. No attack was made by special demurrer, motion, etc., and any grounds for such attack were waived.
The findings of the trial judge that the plaintiff is entitled to a judgment for $2,040, is sustained by substantial evidence, and is founded upon issues framed by the complaint.