In Watkins v. Martin, 167 Miss. 343, 147 So. 652 (1933), two neighbors, a nurse at the hospital and the grantee were present in the room when the grantor signed the deed.Summary of this case from Hendricks v. James
April 17, 1933. Suggestion of Error Overruled June 12, 1933.
Evidence held to show between parties to deed, who were partners and brothers, a fiduciary relation in fact, making deed prima-facie fraudulent.
Deeds between parties to fiduciary relation in fact are same, as respects presumption of fraud, as between parties occupying conventional fiduciary relations.
Party claiming under deed between parties to fiduciary relation had burden of overcoming presumption of invalidity.
Evidence held insufficient to sustain burden on party claiming under deed between parties to fiduciary relation of overcoming presumption of invalidity of deed.
Appeal from the Chancery Court of Lauderdale County.
Gilbert Cameron, of Meridian, for appellants.
That a fiduciary relationship existed between Tom and Sam Martin, being partners, of thirty-five years' standing, as a fact and as a matter of law, has been settled by this court; that their relationship extended beyond this conventional status owing to the strong affection and trust of Sam Martin for and in his brother, Tom, is settled as a fact by the proof and intensifies the good faith required of Tom not to use any improper influence nor be guilty of any improper motive, is also settled by this court.
Ham v. Ham, 146 Miss. 161.
The transaction is not necessarily voidable, it may be valid, but a presumption of its invalidity arises which can only be overcome, if at all, by clear evidence of good faith, of full knowledge, and of independent consent and action.
2 Pomeroy Equity Jurisprudence (4 Ed.), sec. 957.
The burden of overcoming this presumption is on the party claiming under the conveyance, contract, or gift.
This record reflects, we submit, an absence of any knowledge on the part of Sam Martin of his property. All the endorsements of commercial paper were by Tom; he had the custody of the time certificates; he moved the money to a new bank, took out the new certificates. Throughout the years he had done that.
But be that as it may, the vital point is did he know what he was signing? Did he know that he was pauperizing himself, if he should recover? The undisputed evidence is that he didn't read the paper he signed, neither did the subscribing witnesses that Tom brought in, nor was it read in his presence.
Tom Martin wholly failed to make any showing of independent consent and action on the part of Sam, but the record demonstrates also the utter absence of good faith on the part of the grantee or full knowledge on the part of the grantor.
Having failed to do so, then the presumption of invalidity became absolute and the instrument should have been declared void and cancelled.
Bourn v. Bourn, 140 So. 518.
D.M. Watkins, of Hattiesburg, for appellants.
We submit that the rules of this court announced in the case of Ham v. Ham, 110 So. 583, apply to transactions, gifts and such like between parties where they occupy a fiduciary relation, and applies to the case now before this court. Also it is likewise the fact in the case of Bourn v. Bourn, 140 So. 518, which case the parties appellant and appellee had been involved in a transaction wherein a fiduciary relationship existed, and the rule of this court in that case applies to the case at bar, and going back into almost ancient jurisprudence will be found in the second edition of Pomeroy's Equity Jurisprudence the same rule in such cases visibly applies to the one like unto the case at bar.
Wherever cases involving a fiduciary relationship between the parties litigant have gone before the courts of last resort in practically all the states of the union this wholesome rule crowned with enlightened conscience and rising to the high plane of human justice and human equity has been announced by the courts, and as the years come and go the courts of our entire country have in their decisions upon the question of fiduciary relationship between the parties, and especially where each belongs to the same household are growing deeper and stronger and broader.
Wilbourn, Miller Wilbourn, of Meridian, for appellees.
The deed from S.W. Martin to T.E. Martin is a valid, legal and binding conveyance.
Taking the instrument by the four corners in the light of the proof, there is nothing inconsistent or contradictory in the recitals of the instrument and the facts in any legal sense, such as to indicate fraud, nor such as to preclude the finding that in point of fact the "good and sufficient consideration" referred to in the instrument included love and affection which Sam W. Martin had for his brother, T.E. Martin; and that included in the "sufficient consideration" was, also, his feeling and thought and the fact that T.E. Martin had materially aided Sam W. Martin to make the property and had taken him into business with him when he, Sam W. Martin, was a young man without means and opportunity.
A person of sound mind may execute a deed from any motive, whether it be of love, gratitude, prejudice, whim or caprice.
Burnett v. Smith, 93 Miss. 566, 47 So. 117; Baum v. Lynn, 72 Miss. 932, 18 So. 428.
A total failure of consideration for a voluntary conveyance, in the absence of fraud, is no ground for cancellation of the deed.
Dixon v. Milling, 102 Miss. 409, 59 So. 804, 43 L.R.A. (N.S.) 916; Day v. Davis, 64 Miss. 253, 8 So. 203; Longmire v. Marrs, 124 Miss. 77, 86 So. 753.
The law presumes that every man is sane and honest; that all his acts are dictated by correct motives and are the result of his own independent, intelligent and unaided judgment. It also presumes that all his contracts are valid and were entered into freely and voluntarily in the exercise of an intelligent discretion. It never presumes dishonesty, mental incapacity, fraud, undue influence or other matter tending to vitiate a contract.
Wherry v. Latimer, 103 Miss. 524, 60 So. 563; Mississippi Power Company v. Sellers, 133 So. 594; Alabama, Great Southern Railroad Company v. F.A. Hulett Son, 131 So. 814, 159 Miss. 333; Burkett v. Anderson, 133 So. 129, 160 Miss. 144; Robinson v. McShane, 140 So. 725.
The rule of law, with reference to the construction of deeds requires the court to give effect to all the instrument and every word in it as far as may be done, and taking it by the four corners and in the light of the surrounding circumstances, to construe the instrument so as to effectuate the intent of the grantor, and so as to maintain, if it can be done, its validity.
We submit that the instrument is a valid deed, though executed with all the formalities of a will.
Wall v. Wall, 30 Miss. 91; Sartor v. Sartor, 39 Miss. 760; Cunningham v. Davis, 62 Miss. 366; Simpson v. McGehee, 112 Miss. 344, 73 So. 55; Knight v. Knight, 97 Miss. 481, 133 So. 74; Prather v. Prather, 97 Miss. 311, 52 So. 449; Ferrara v. Russo, 102 A. 86, L.R.A. 1918B, 905.
On the general proposition of undue influence, see Woodville v. Pizzati, 119 Miss. 442, 81 So. 127; Jameson v. Jameson, 96 Miss. 288, 61 So. 230; Hitt v. Terry, 92 Miss. 671, 46 So. 821; Helm v. Shiek, 115 Miss. 726, 77 So. 820; Isom v. Cannedy, 128 Miss. 64, 88 So. 485; Barnett v. Barnett, 155 Miss. 449, 124 So. 498; Moore v. Marks, 122 Miss. 301, 84 So. 230; Scally v. Wardlaw, 123 Miss. 857, 86 So. 625; Estes v. McGehee, 133 Miss. 174, 97 So. 530; Wherry v. Latimer, 103 Miss. 524, 60 So. 542 and 653; Nebhan v. Monsour, 139 So. 166, 162 Miss. 418.
The proof shows that the two brothers were devoted to each other, and each equally trusted the other, and that neither had ever had any cause to rue the exercise of such confidence. The proof is clear that Sam W. Martin was a man of independent mind and thought and individuality, not easily influenced, but who had opinions of his own which he did not hesitate to assert. There was no proof that T.E. Martin was the dominating personality in the association between him and Sam W. Martin.
Where a fiduciary relationship exists, the deed is not necessarily void but may be valid. The presumption of invalidity is only prima facie and may be rebutted by proof.
The learned court below heard the case, saw and observed the witnesses, heard the arguments, took the case under advisement, received and considered briefs of counsel, and then found the issues of fact in favor of appellee. We submit he was correct and should be affirmed.
The weight which should be given to the presumption of fraud or undue influence which may arise from the relationship of the parties to a transaction varies with the facts and circumstances.
Where two persons are closely associated in the affairs of life and deeply concerned in the welfare of each other, the mere fact that one usually conforms to the will of the other is by no means conclusive proof that it is the result of undue influence.
Argued orally by C.V. Gilbert, for appellant, and by R.E. Wilbourn, for appellee.
The appellants, a sister, brother, and nephew of S.W. Martin, deceased, filed their bill in the chancery court of Lauderdale county against Mrs. Willie Mae Bounds, a niece, and the appellee T.E. Martin, a brother of the said S.W. Martin, seeking to cancel a deed executed by S.W. Martin to T.E. Martin on February 8, 1932, eight days before his death. The ground upon which the cancellation of the deed is sought is that the fiduciary relations which existed between T.E. and S.W. Martin at the time of the execution thereof and for many years prior thereto, made the deed prima facie fraudulent and void. The cause was tried on bill, answer, and proof, and a decree was entered dismissing the bill, from which this appeal was prosecuted.
The pleadings are very lengthy, and we shall only set out such brief outline of the facts alleged and proved as appear necessary to make apparent the issues involved and to be decided.
S.W. Martin was a bachelor, and he and his brother T.E. Martin were partners first as cattle dealers, and later in the mercantile business and in land holdings, for a period of about thirty-five years. For many years S.W. Martin lived in the home of T.E. Martin practically as a member of the family; the home being owned jointly by the two brothers. The first relations of these brothers as partners were in the cattle business. This business prospered, and much of the profits thereof was invested in real estate; the title being taken in the names of T.E. and S.W. Martin. They also accumulated the sum of twenty-five thousand dollars in cash, which, at the time of the death of S.W. Martin, was on deposit in bank, and evidenced by time certificates of deposit, payable to T.E. Martin and/or S.W. Martin. After the cattle business was closed out, these brothers went into the mercantile business under the firm name of Martin Cooper, in which firm S.W. Martin and T.E. Martin owned one-half interest and O.A. Cooper the other half interest; and this business was in active operation at the time of the death of S.W. Martin.
Throughout the entire period of the conventional relationship of partners which existed between T.E. and S.W. Martin, which covered a period of about thirty-five years, there was a very high degree of mutual confidence and intense affection between them. T.E. Martin was a man of exceptional business ability, and throughout the partnership was principally the outside or contact man, in that he attended almost exclusively to the purchases and trading, the disposition, expenditure, and investment of partnership funds, the assessment and payment of taxes, and the management of the real estate holdings of the partnership. Although S.W. Martin was a man of sound business judgment, he was of retiring disposition, and, for the most part, contented himself with the discharge of the internal affairs of the partnership, and reposed absolute trust and full dependence in his brother, T.E. Martin.
Some days or weeks before he was stricken with a fatal illness, S.W. Martin's health began to fail. Mrs. T.E. Martin testified that about two weeks before his death, when she was discussing a certain will contest in the presence of S.W. Martin and her husband, S.W. Martin stated that, if anything happened to him, "he aimed to have everything fixed so it would not give Tom any trouble; that Tom helped him to make it, and he thought he was entitled to it." Mr. Cooper, a partner in the mercantile business of Martin Cooper, testified that about a week before S.W. Martin was taken seriously ill he stated to him (Cooper) that before he died he wanted to fix matters so Tom would not have any trouble over what property he left; that they had worked together and made it, and he (Tom) was the one that was entitled to it.
On Saturday before the deed in question was executed on Monday, S.W. Martin became seriously ill, and Dr. Bourdeaux was called to attend him. On Monday following, Dr. Tatum was called in consultation, and these physicians were requested by T.E. Martin to determine whether the patient was in condition to make a will or transact business; and, after their consultation, they advised T.E. Martin that, in their opinion, he was capable of executing a will or transacting business. The nurse who was attending the sick man testified that at some short time, not definitely fixed in the record, before the execution of the deed in question, T.E. Martin came to the bedside of his sick brother and said to him: "You are a very sick man. In case anything happens to you, what do you want done. We have been associated together, and whatever you want done, I will do it. Do you want me to have it, or do you want it divided up, I will do whatever you want done;" and that S.W. Martin replied: "You may have it."
T.E. Martin had an attorney to prepare a draft of a deed conveying to himself, S.W. Martin's interest in all the real and personal property owned by them jointly; but whether this was done before or after the physician's advice to him that S.W. Martin was capable of executing a will or transacting business does not clearly appear from the record. That night relatives of the sick man, including his brother John M. Martin, were in the home of T.E. Martin where S.W. Martin was seriously ill, but nothing was said to them about the proposed execution of the deed. After they left the home, between nine-thirty and ten-thirty P.M., the nurse who was attending the sick man notified T.E. Martin that his brother was awake, and thereupon T.E. Martin requested two neighbors who were presented to go with him for the purpose of witnessing a paper to be executed by S.W. Martin. These two witnesses testified that, after they entered the room of the sick man and exchanged greetings with him, T.E. Martin said to his brother, "Sam, I have these papers fixed;" that S.W. Martin then asked how he had fixed them, whether it was a will and whether he had fixed it so they could give him no trouble; and that T.E. Martin told him that it was a deed, and that he had made it all to himself. They testified that S.W. Martin then asked for a pen and his glasses, and told the nurse where she would find the glasses; that he then took the deed and looked at it for a short while, but they were unable to say whether he read it; that he then signed the deed, and they signed it as witnesses and delivered it to T.E. Martin. These two witnesses, as well as the nurse who was present when the deed was signed, testified that, although S.W. Martin was then a very sick man, he was apparently in full possession of his mental faculties. He lived eight days after the execution of this deed. Shortly after his death, the execution of the deed was proved by the affidavit of one of the subscribing witnesses; and it was filed for record. The value of the personal property conveyed was in excess of twenty-five thousand dollars, but the value of the large amount of real estate conveyed, a description of which was set forth in the appellee's answer to the bill of complaint, was not shown, but the amount of this real estate would indicate a valuation of considerable magnitude.
In addition to the fiduciary relation which existed between T.E. Martin and S.W. Martin as partners for many years, there was the very close mutual confidence and affection between them which established the existence of a fiduciary relation between them in fact; and upon the facts we think this case is controlled by the principles announced in the case of Ham v. Ham, 146 Miss. 161, 110 So. 583, and the authorities there cited. In most essential respects the facts in the Ham Case are practically parallel with the facts in the case at bar. In the Ham Case it was shown that, before the execution of the deed in question, C.M. Ham, the grantor, consulted with his attorney and received advice from him as to the character of the instrument which should be executed, in order that he might be protected in the receipt of an annuity which his brother was to give him for the property conveyed, and, when the deed was drawn up and submitted to him, the said C.M. Ham suggested to the attorney certain changes to be made therein. In the case at bar, the record wholly fails to show that the grantor had any competent and independent advice, or any advice whatever from any one disconnected from the grantee; and in this respect, the facts of this case are stronger against the validity of the deed than were the facts in the Ham Case. As was said in the Ham Case, the "rules governing deeds between parties to a fiduciary relation in fact are the same as those where the parties occupy a conventional fiduciary relation, as to presumption of fraud." The evidence in this case establishes the existence of a fiduciary relation in fact between the parties to the deed, making it prima facie fraudulent. In the case of Bourn v. Bourn, 163 Miss. 71, 140 So. 518, the principles announced in the Ham Case, supra, were re-affirmed and followed. The burden was on the appellee to overcome the presumption of invalidity of the deed, and we think he failed to produce evidence sufficient for that purpose.
The decree of the court will therefore, be reversed, and the cause remanded.
Reversed, and cause remanded.