Summary
In Walsh v. Harkey, supra, an "improvident" transfer was set aside for lack of independent advice, notwithstanding the consideration of verbal promise of support for life. These two cases were cited by the court of errors and appeals in Soper v. Cisco, supra (at p. 169), with no expression of disapproval, but distinguishing them from the facts in the case then at bar.
Summary of this case from In re FulperOpinion
04-10-1908
WALSH et al. v. HARKEY et al.
Pitney, Hardin & Skinner, for complainants. S. J. MacDonald, for defendants.
Bill by James P. Walsh and others against Mary Ann Harkey and others to set aside a deed by their ancestor to two of the defendants. Decree rendered for complainants upon condition that defendants be paid for the care and maintenance of the ancestor subsequent to the execution of the deed.
Pitney, Hardin & Skinner, for complainants. S. J. MacDonald, for defendants.
EMERY, V. C. The bill is filed by three of the children and two of the grandchildren of Ann Walsh, as her heirs at law, to set aside a deed made by her on January 25, 1902, conveying to one of her daughters, Mary A. Harkey, and to James A. Harkey, her husband, a house and lot comprising nearly all her property. David Walsh, a son and one of the heirs at law, does not join with complainants, and is made defendant. The deed is expressed to be for one dollar and other valuable consideration. The bill is based on charges of fraud and undue influence, advantages taken of the confidential relation existing between the parties, and the failure of the deed to contain a power of revocation. At the hearing the omission of independent counsel for the grantor or giving her the choice of such counsel was also relied on as supporting the charge of undue influence and violation of the duties arising from confidential relations.
The substantial facts proved are as follows: An old woman, 70 or over, in failing health, and actually in bed from an attack, which, at the time, she seemed to suppose might terminate in her death, conveyed to one of her daughters and to the husband of the daughter with whom she was then living, and upon whom she was practically dependent a house and lot worth about $2,000, andwhich constitutes all of her property, except about $200 in bank. The deed is a deed with full covenants of warranty, and is expressed to be for "one dollar and other good and valuable consideration." No other considerations were either inserted in the deed or in any other agreement made at the time, and the only agreement in writing protecting the grantor was a lease of the premises for her life. This lease was made subsequently to the deed, and apparently to carry into effect a wish expressed by the grantor directly after the execution of the deed—that if she recovered she would like to have a life right in the property, with which wish the daughter and son-in-law agreed to comply. The deed and lease were both drawn and acknowledged by an attorney apparently employed for that sole purpose by the son-in-law and paid by him. Mrs. Walsh, who was, up to the fall of 1901, a vigorous, hard-working woman, had brought up a large family of children, and by her own industry, aided by them, had saved enough to acquire this property, a house and lot, renting for about $10 or $11 a month. For about 11 years previous to the deed she had lived with her daughter Mrs. Harkey, the other children, sons and daughters, having married and gone from home. Up to the time of a paralytic stroke in 1901 she had assisted in the household of her daughter and had not paid any board; neither did any compensation seem to have been contemplated on either side. This attack confined her to her bed for a few days, but she recovered, and in the fall of 1901 and early winter of 1901-02 was able to attend to business. In January, 1902, she had another attack of illness—serious, but probably not a recurrence of paralysis—and while in bed from this illness first expressed, according to the evidence of both the son-in-law and daughter, a desire that they should have this property. The reason she gave for it, as the son-in-law now states it, was that they had given her a good home, that she had been a good deal of trouble to them, and did not know how much more trouble she would be. The son-in-law's statement is that he was told this by his mother-in-law, in the presence of his wife, who had called him to the sickroom at her mother's request. The mother-in-law, after expressing this wish, proposed that a witness be called in, and suggested the name of a neighbor. The son-in-law then said to her that if she wanted to give them the property she had better make a deed. Apparently she acquiesced in this suggestion without further remark or objection. Mr. Harkey then saw an attorney and requested him to come to his house, stating only that there was a deed to be drawn, and not giving the attorney any particulars. The attorney went to the house and to the sickroom with the daughter and son-in-law, and, according to his statement, the mother, taking out her deed from under her pillow, gave it to him, with directions as to how the deed was to be drawn. She said that she wished to have a deed made to James, her son-in-law, and Mary, his wife, and to both of them, saying that she considered her son-in-law as her son. The attorney returned the next night with the deed in question, and, the grantor being still in bed, was taken to her room again by the son-in-law and daughter. Mrs. Walsh could neither read nor write, and he then explained to her, as he says, the effect of the deed. This apparently seems to have been confined to the legal effect of the deed as transferring the property, and especially that if either the son-in-law or daughter died the survivor would be sole owner of the property. There was no inquiry or explanation as to its effect on the grantor herself in its bearing as a conveyance of substantially her entire property without any legal or adequate provision for her protection and support. The deed was then executed and acknowledged. At the time of this explanation and acknowledgment he says Mr. Harkey and his wife were not in the room, as he had sent them out. Mrs. Walsh at this time also again expressed her strong feeling for her son-in-law, saying she had lived with them for a number of years, that they had been kind and good to her, and that was the reason she wanted it drawn as she did. After acknowledging the deed the attorney, as he says, gave it to her. Before signing the deed nothing was said about Mrs. Walsh having any life right, but after Mr. and Mrs. Harkey came back into the room there was something said about her retaining possession for her life, and the attorney was requested by Mr. Harkey to draw up a life lease to Mrs. Walsh. He subsequently did so, and this lease, dated three days after the acknowledgment of the deed, was acknowledged February 3d. In relation to the execution of the deed the attorney's attention seems to have been directed solely to the question of Mrs. Walsh's mental capacity to understand the transaction, and I think his evidence shows that the grantor, notwithstanding her weak physical condition, did then have sufficient mental capacity to understand that she was conveying the property to her son-in-law and daughter, and to execute and deliver the deed. But the deed, according to the account of the daughter and son-in-law, was professedly executed as a gift for past kindness or services, and the expectation, on the grantor's part, of a continuance of support and care. The grantor was at this time obviously so situated as to be dependent altogether on the daughter and son-in-law for proper physical care and attention, and the circumstances were such that their influence was dominant. In view of this situation, the grantor, in the absence of a clause of revocation in the deed, was entitled to the opportunity or choice of independent counsel to protect her interests on thus partingwith substantially her entire property without any security for her future support. Under the circumstances disclosed by the proofs, an independent counsel would certainly have advised, and would have been bound to advise, that if a deed (instead of a will) was determined on by the grantor in order to carry out this gift, then that it should contain either a power of revocation or provisions securing her support and maintenance for life, as well as her enjoyment of the property for life. That there was a deed conveying the property absolutely and without conditions at once instead of a will seems to have been due altogether to the express advice or wish of one of the grantees, the son-in-law, which was apparently accepted without any question. The grantees in thus influencing in their own favor this execution of a deed conveying the property directly to them, and in employing an attorney solely to draw a deed, took the risk that if the conveyance was so made to them, without any opportunity to the grantor for independent counsel as to her protection, the whole transaction was subject to the inquiry whether the grantor's interests had been properly protected, and to an inquiry in a court which is specially charged with the protection of grantors acting under the dominant influence of confidential relations.
As to the legal principles involved, the case comes well within the principles declared by the Court of Errors and Appeals in Slack v. Rees, 66 N. J. Eq. 447, 59 Atl. 466, 69 L. R. A. 393 (1903), and reaffirmed in Albert v. Haeberly, 68 N. J. Eq. 664 (1905) at page 666, 61 Atl. 380, 111 Am. St. Rep. 652, where the chief justice says: "A deed which reserved to the donor no power of revocation was voidable at the option of the donor or his heirs, when it appeared that at the time of its execution there existed between the parties thereto a relation of trust and confidence, in which the donee occupied the dominant position, and also that the donor, when making the deed, did not have the benefit of competent and independent advice as to its effect." In the first case (Slack v. Rees) a deed of his real estate (two houses and lots, comprising substantially his entire property) was made by a father of advanced years and in infirm health to his daughter with whom he lived at the time, and upon whom he was then dependent for care and service. The deed was drawn by an attorney who had been previously employed by the grantor himself, and seems to have been drawn by the sole direction of the grantor, who stated to the attorney that he desired to draw a deed conveying the property to his daughter, and asked whether he had better make a will or a deed. The attorney (not the grantee, as here) advised a deed, but failed to insert a power of revocation. The court says (page 450 of 60 N. J. Eq., page 407 of 59 Atl. ): "It is difficult to understand the failure of the attorney to advise the grantor as to the effect of such a deed as was executed. He not only should have done this, but he should have insisted on inserting in it the reservation to the donor of the power to revoke the gift, unless the grantor had distinctly refused to have it done." The court in this case were divided on the question whether the daughter had shown affirmatively that the deed was not the product of undue influence on her part, but they were unanimous in the decision that the deed (not containing a power of revocation) must be set aside, because, in making it, the donor did not have the benefit of competent and independent advice as to its effect, and it was said that the object of this rule requiring independent advice was to protect donors against voluntary action on their part, induced by the existence of relation to the grantees, the effect of which they may only partially understand or appreciate. Page 449 of 66 N. J. Eq., page 467 of 59 Atl. (69 L. R. A. 393). It will be observed that in this case the attorney who drew the deed seems to have been the grantor's own attorney, selected by him, and that the deed was set aside because of the failure of the grantor's own attorney to protect his client's interest. In the present case the attorney was employed by the grantee to draw the deed and for that special purpose, and from his own statement was apparently careful only to see that the grantor understood, and was capable of understanding, that she was drawing an absolute deed to the grantees, and what estate it gave them. There was no inquiry or advice directing her attention to the effect of this deed as legally divesting her of her property and leaving her without any writing of any kind to secure her, and from that time dependent on the good will or charity of her daughter and son-in-law for the rest of her life. The effect of the deed in this respect was the really important fact to which the attorney should have directed the attention of the donor, and she was entitled to the opportunity of the advice of independent and disinterested counsel, given in the absence of the grantees, to make her understand and appreciate the full effect and consequence of the instrument in all its bearings. Thorp v. Smith, 63 N. J. Eq. 70, 92, 51 Atl. 437 (Pitney, V. C, 1902). The fact that up to the time of this illness in January the mother, although she had lived with Mrs. Harkey for years, had never, so far as appears from the evidence of Mrs. Harkey or her husband, proposed to give the property to this daughter alone, but had, according to the evidence of other children, spoken to them about its equal division, is one of the circumstances of this case which specially shows the necessity for the protection given by the rule laid down in the above cases against hasty, impulsive, or improvident voluntary dispositions of property, made by donors to those who exercise over themat the time the dominant influence of confidential relations.
I conclude, therefore, that the deed when made and delivered was voidable as against the grantor and her heirs, and the remaining question is whether the fact that the lease for life was subsequently executed, and the grantor during her life continued to receive the rents of the property and to be supported and cared for by the grantees, prevents the heirs of the grantor from having the deed declared void after her death., Mrs. Walsh recovered from the serious attack in January, 1902, but soon after, and from at least the fall of 1902, when she had another paralytic attack, was feeble, requiring constant care and attention, and was for the most part in the care of a sister who came to live with Mrs. Harkey, and stayed there until Mrs. Walsh died in October, 1905. So far as relates to any conduct on the part of Mrs. Walsh herself, there is nothing which would justify any inference of subsequent ratification or waiver. Such ratification or waiver could not, under the circumstances here proved, be made without the benefit of advice of the same character as was required to make the deed, originally valid (Martling v. Martling, 47 N. J. Eq. 122, 20 Atl. 41 [1890, Pitney, V. C.]), and from the fall of 1902 it is doubtful whether Mrs. Walsh had sufficient mental capacity to understand such advice if given. Her heirs at law succeeding to her rights have, therefore, the right on her death to avoid the deed upon the ground of its invalidity when made. But the enforcement of this right either for them or even the grantor is subject to any equitable conditions to the benefit of which the grantees may show themselves entitled. The Harkeys undoubtedly have carried out the understanding, implied but not expressed at the time of the execution of the deed, and which was as between the parties part of the consideration, that the mother was to be taken care of for the rest of her life, and I think that this maintenance and support were continued, either wholly or in part, in reliance on the fact that the deed had been made. This fact, taken in connection with the other fact, that the grantor during her life seems to have received for herself the rents of the property, gives the grantees a standing in a court of equity for protection to the extent they have relied on the deed, and incurred expenses or obligations for Mrs. Walsh's subsequent support, unless the deed was procured by such actual fraud as would deprive them of this equitable consideration.
On the whole situation disclosed by the proofs in this case I am inclined to think that if independent counsel had been called in to advise Mrs. Walsh the ultimate disposition of the property in favor of the grantees might still have taken place, but under the conditions such as would have assured to Mrs. Walsh herself, not only the rents, but the entire benefit of the property for her maintenance, if necessary during her life, and either by a will or deed containing a power of revocation. If such view can reasonably be taken on the evidence, the defendants are entitled to the benefit of it, and the failure, either through their own ignorance or the inattention of their attorney, to themselves protect the grantor in the transaction, should not be visited with such penalty as might be required in a case of actual fraud and imposition in procuring the deed to be drawn. Their subsequent support of Mrs. Walsh being, as the papers were drawn, purely voluntary, while it cannot avail to make the original deed valid, may avail them, to its full equitable extent, by requiring the complainants as a condition for the equitable relief of setting aside the conveyance to pay such sum as may be determined to be proper and equitable for the maintenance and support of Mrs. Walsh after the execution of the deed. In making such equitable condition I follow the view expressed by myself in Storms v. Peer (N. J. Ch.) 52 Atl. 705, 707 (1902), that where such subsequent support was provided for in the deed, and was given, it would, if the deed was declared invalid, justify imposing as a condition of relief that compensation should be made for the support given in reliance on the deed. In this aspect of the case (that of imposing conditions for equitable relief) the insertion of the provision for support in the deed itself is important only on the question of the nature of the proof of the agreement for support. If under all the circumstances the court is satisfied, even by proof dehors the deed, that there was such an agreement or understanding, and that in carrying it out the deed was relied on, either wholly or in part, the equity for imposing conditions exsists, as these arise solely out of the fact of performance of the agreement and reliance on the deed. In Collins v. Collins (1902) 63 N. J. Eq. 602, 605, 52 Atl. 1115, Stevens, V. C, directed that a voluntary deed from a father to son, set aside as improvidently made, should stand as security for money advanced because of getting the conveyance.
I will advise a decree that the deed be set aside upon condition that the defendants be paid such sum as may be determined to be just and equitable for the support, care, and maintenance of Mrs. Walsh subsequent to the execution and delivery of the deed, and I will settle on notice the form of the decree, including the question of the manner of ascertaining the amount to be paid.