Bostic v. Bryan, 263 Ala. 673, 83 So.2d 796. "A constructive trust in favor of a husband has been held to arise where property is conveyed to his wife on a consideration from him and on her agreement to reconvey to him and where she breaches such agreement, or where the wife with wages of her husband which he has turned over to her purchases property with the understanding that it is to be for the benefit of both of them. * * *" 26 Am.Jur., Husband and Wife, § 102 at page 729, citing 35 A.L.R. 312, which, in turn, cites Ridky v. Ridky, 226 Mich. 459, 198 N.W. 229. The Ridky case held that a constructive trust arose in favor of a husband, who turned over his wages to his wife, in property purchased by her with the understanding that it was to be for the benefit of both of them.
The married women's statutes did not abrogate the common-law right of the husband to the earnings of his wife. In Ridky v. Ridky, 226 Mich. 459, we held that previous to the passage of PA 1911, No 196 (CL 1948, § 557.11 [Stat Ann § 26.171]), all the earnings of a married woman belonged to her husband as a matter of law. In Artman v. Ferguson, 73 Mich. 146 (2 LRA 343, 16 Am St Rep 572), the issue was whether a husband and wife could legally enter into a copartnership.
Taking the statements in plaintiffs' bill as true, for the purposes of deciding a motion to dismiss or transfer to the law side of the court, there are allegations which show that plaintiffs put up $500 of the $600 down payment on the property and made substantial payments thereafter on the promise that the title to the property should vest in the 2 plaintiffs and the 2 defendants together. Plaintiffs are no longer minors. The case comes within the rules set forth in Linsley v. Sinclair, 24 Mich. 380; Ridky v. Ridky, 226 Mich. 459; Stephenson v. Golden, 279 Mich. 710; Ridky v. Ridky, supra, was a case in which a husband sought to establish a half interest in the family home. He claimed that his wife had taken title to their house in her own name, when it had been mutually understood that it was to have been taken in their joint names as tenants by the entireties. In holding that the situation gave rise to a constructive trust, we said:
Mr. Bruso having become aged and infirm, Mrs. Bruso attended to their family affairs. It was her duty to handle their joint resources in the interests of both. In Ridky v. Ridky, 226 Mich. 459, we said: "It is not an uncommon practice amongst laboring people circumstanced as they were and dependent upon the earnings of the husband for him to regularly turn over most or all of his wages to his wife, as their joint hoard to be kept and disbursed by her as conditions warrant, largely in her discretion but in a sense as his agent acting for their common good. * * * Ridky was a nonparticipant in her purchase of this property from a third party, a stranger who conveyed title to her in her own name, she using for that purpose their family fund accumulated as above described.
In general, a confidential relationship or fiduciary relationship, the two terms being ordinarily used interchangeably, within the meaning of the rule that a constructive trust arises from the abuse or violation of such a relation, exists wherever confidence is reposed on one side and there is a resulting superiority and influence on the other. 65 C. J. p. 483, Trusts, § 228; Neagle v. McMullen, 334 Ill. 168, 165 N.E. 605; Rubin v. Midlinsky, 321 Ill. 436, 152 N.E. 217. Compare Ridky v. Ridky, 226 Mich. 459, 198 N.W. 229, holding that a court of equity can and should recognize a disparity of intellectual force, ability, and business experience between parties and the dominant position of one with respect to the other. A person is found to stand in a fiduciary relationship to another when he has rights and duties which he is bound to exercise for the benefit of that other person.
This court should recognize the disparity of intellectual force between the parties; their close fiduciary relationship as husband and wife; the fact she had procured an adjudication of insanity by the probate court; that he was incarcerated in an institution for insane persons when the deeds were procured, and that when they were procured plaintiff's ward was released and went home and defendant began the collection of the income from his real estate; that no consideration was paid for the deeds, and there was no agreement securing him in his support and maintenance; and that he entered such institution in fair circumstances and emerged therefrom a pauper. Ridky v. Ridky, 226 Mich. 459. There is no principle of equity which the court is more ready to exercise than that which protects persons in a situation of dependence upon others from being imposed upon by those upon whom they are dependent. Smith v. Kay, 7 H. L. Cas. 750 (11 Eng. Rep. 299).
A necessary basis for raising a constructive trust in favor of plaintiff is fraud, actual or constructive, including acts or omissions in violation of fiduciary obligations. Ridky v. Ridky, 226 Mich. 459. Both Mr. and Mrs. Frank rightfully withdrew money from the business.
Carmichael v. Carmichael, 72 Mich. 76 (1 L.R.A. 596, 16 Am. St. Rep. 528); Bird v. Pope, 73 Mich. 483; Wright v. Wright, 99 Mich. 170 (23 L.R.A. 196); Bassett v. American Baptist Pub. Soc., 215 Mich. 126 (15 A.L.R. 213); Underhill on Wills, § 286. If defendant in equity obtained the property of Charles Jolls in the way alleged, she holds it under a constructive trust for plaintiffs which is peculiarly within the power of a court of equity to control and enforce. Huxley v. Rice, 40 Mich. 73; Gates v. Cornett, 72 Mich. 420; Lockwood v. Lockwood, 124 Mich. 627; Cornell v. Whitney, 132 Mich. 300; Woolcott v. Woolcott, 133 Mich. 643; Weir v. Union Trust Co., 188 Mich. 452; Nesbitt v. Onaway-Alpena Tel. Co., 202 Mich. 567; Ridky v. Ridky, 226 Mich. 459; Pomeroy's Eq. (4th Ed.), § 951; Perry on Trusts (7th Ed.), §§ 189-194. The jurisdiction of a court of equity over constructive trusts is not affected by the statutes giving probate courts jurisdiction of testamentary trusts.
Jenne v. Marble, 37 Mich. 319, 322. The facts are not unlike those in Ridky v. Ridky, 226 Mich. 459, which may be read with profit. Had the suit been one for divorce, the court might have decreed to the wife such part of the estate as was just and reasonable, but in this suit it was without jurisdiction or power to do so.
of honesty and fair dealing. It is true that some hold that a fraud must exist at the time the title is acquired — an element lacking here, as we have seen; some say that this fraudulent intent will be inferred from a subsequent failure to perform the agreement under which the title is obtained; while still others take the ground that fraud at the outset is established by proof of subsequent fraud. It is enough here to say that the best considered modern cases go to the extent of holding that when one conveys the title to his property to another in reliance upon the latter's promise, a conscientious obligation is imposed, a violation of which for the grantee's own advantage is such a fraud that equity will make him a constructive trustee for the benefit of the grantor or his beneficiary. And this will be so, though the grantee enters into the agreement with an honest intention of performing it. Springer v. Springer, 144 Md. 465, 125 A. 162; Bray v. Timms, 162 Ark. 247, 258 S.W. 338; Ridky v. Ridky, 226 Mich. 459, 198 N.W. 229; Nestor v. Gross, 66 Minn. 371, 69 N.W. 39; Lefkowitz v. Silver, 182 N.C. 339, 109 S.E. 56, 23 A.L.R. 1491; Moore v. Crawford, 130 U.S. 122, 32 L. ed. 878, 9 Sup. Ct. 447; Arnston v. First Nat. Bank, 39 N.D. 408, 167 N.W. 760, L.R.A. 1918F, 1038; Alwood v. Mansfield, 59 Ill. 496; 3 Pom. Eq. § 1053; Perry, Trusts (6th ed.) 181a, and cases cited; 26 R.C.L. 1232. The forms and varieties of these constructive trusts are practically unlimited.