Bradbury v. Rasmussen

• Decision Date: 07 May 1965
• Docket Number: No. 10055,10055
• Citation: 16 Utah 2d 378,401 P.2d 710
• Parties: d 378 R. George BRADBURY, Administrator of the Estate of George R. Bradbury, deceased, and Althea Bradbury, Plaintiffs and Respondents, v. Gordon L. RASMUSSEN and Yora Gene Rasmussen, his wife, Defendants and Appellants.
• Court: Utah Supreme Court

Page 710

401 P.2d 710

16 Utah 2d 378

R. George BRADBURY, Administrator of the Estate of George R Bradbury, deceased, and Althea Bradbury Plaintiffs and Respondents, v. Gordon L. RASMUSSEN and Yora Gene Rasmussen, his wife Defendants and Appellants.

No. 10055.

Supreme Court of Utah.

May 7, 1965.

Nielsen, Conder & Hansen, Salt Lake City, for appellants.

Dan S. Bushnell, Little America, Wyo., for respondents.

CALLISTER, Justice:

Defendants appeal from a judgment in favor of plaintiffs wherein the lower court declared null and void a warranty deed, a lease agreement, and a transfer of water stock certificates.

Plaintiffs, George R. ¹ and his wife, Althea Bradbury, were the owners of farm land and appurtenant water rights in Sevier County, Utah. They had only the child, R. George Bradbury. However, they had reared as their daughter, defendant Yora Rasmussen, who was the natural child of a niece, whom they had also reared. After Yora's marriage to defendant Gordon Rasmussen, she moved away, but the close familial relationship continued.

For several years prior to 1960, the farm had been leased to other individuals. The son, R. George, at one time operated the farm but left to seek employment elsewhere. From 1957 through 1959, M. D. Foreman, a brother of Mrs. Bradbury, operated the farm. He advised the Bradburys that he could not continue and advised them to sell their holdings. They declined this suggestion.

In October of 1959, the Resmussens visited the Bradburys at the farm, and there was a discussion about a possible sale of the farm to the Rasmussens for $300 per acre. Mr. Rasmussen stated that he would have to think the matter over. From here on the testimony of the parties as to what transpired differs substantially.

However, in the early part of 1960, the parties consulted Mr. Tex R. Olsen, an attorney at his office in Richfield, Utah. What took place at this consultation is in dispute as between the parties. After meeting with the attorney, the Rasmussens returned to their home in Orem, Utah and the Bradburys to their farm. On a subsequent date, Mrs. Bradbury delivered to the attorney some tax notices which contained a description of the property. She had a discussion at this time with Mr. Olsen. On February 18, 1960, the Bradburys went to the office of Mr. Olsen and executed the papers which he had prepared. The Bradburys testified that the attorney merely read the papers to them and they signed the same without realizing their significance.

The papers executed by the Bradburys consisted of a warranty deed conveying their real property to the Rasmussens, but reserving a life estate to them, and a farm lease agreement wherein the Bradburys leased the property to the Rasmussens for the term of the life of the survivor of the lessors unless sooner terminated by mutual agreement.

The following day the deed and lease, together with copies thereof, were mailed to the Rasmussens. They signed the original lease and mailed it back to the attorney. About two weeks later, the Rasmussens gave the Bradburys a check for the one dollar consideration which was recited in the deed.

Shortly thereafter, Mr. Rasmussen moved to the farm and undertook its operation. His wife and family joined him at the close of the school term, and the family moved into one of the hones on the farm. The Rasmussens terminated their employment and disposed of their home in Orem.

Later the Bradburys gave the Rasmussens three water stock certificates, together with assignments thereto which were taken by Gordon Rasmussen to the secretary of the water company who issued new certificates in the name of the Rasmussens. These certificates were turned over to the Bradburys and held by them.

The trial court made findings of fact substantially in accord with the facts outlined up to this point. It made additional findings which will be discussed subsequently.

The parties evidently lived side of side in harmony during 1960, cooperating with and assisting one another. The Bradburys financed the purchase of some cattle by the Rasmussens.

Sometime in 1961 a conflict arose between the parties. According to the Rasmussens it was in the spring that the son, R. George, learned of the transaction and shortly thereafter his parents informed the Rasmussens that there would have to be some changes made. According to the Bradburys, the dispute arose in August when a man from the bank came to check the property and they became aware of the import of the papers which they had signed. However, M. D. Foreman testified that in July he had driven the Bradburys to St. George, Utah to visit their son, and that he had heard the son tell his parents that they should 'fight it all the way' to get the property back.

It was the contention of the Bradburys that they thought the documents they had signed were for a contract of sale rather than a deed reserving a life estate. The case was tried before the lower court without a jury. ² It made, among others, a finding of fact that the deed, lease and transfer of water stock were null and void for the following reasons:

(a) A confidential relationship existed between the parties thereto.

(b) The plaintiff, Althea Bradbury, and her husband, George R. Bradbury, deceased, were elderly people, with infirmities incident to age. ³

(c) The defendants represented the transaction as being one for the sale of the farm and water stock, when, in fact, the documents purported to make a gift of such property.

(d) The transferors at no time intended to make a gift of said property.

(e) The alleged transfer of the above mentioned property was made subject to a mistake of fact on the part of the plaintiffs as to the nature of the transaction and the transfers involved.

(f) The plaintiffs were of the opinion and understanding that said transactions were for the purpose of consummating the negotiations for the sale of the property.

(g) That the transferors did not have the benefit of independent advice in connection with said transaction.

(h) By virtue of the alleged transfers of the property mentioned above, the transferors has substantially disinherited their natural born heir, being their only son, R. George Bradbury.

(i) The defendants failed to prove by clear and convincing evidence that the alleged gifts were fair, equitable, valid and free from any fraud or undue influence arising from the faith and trust reposed in them because of the confidential relationship.

Based upon the foregoing findings, the court concluded as a matter of law that the defendants in their confidential relationship, exerted undue influence upon the Bradburys and entered judgment accordingly.

The first question to be resolved is whether the lower court erred in its determination that a confidential relationship existed between the parties, as that term is considered in its legal significance. The evidence is undisputed that there existed among the parties sincere affection, trust and confidence, but is this legally sufficient to constitute a confidential relationship giving rise to a presumption that the transaction was unfair? ⁴ We think not.

The mere relationship of parent and child does not constitute evidence of such confidential relationship as to create a presumption of fraud or undue influence. ⁵ While kinship may be a factor in determining the existence of a legally significant confidential relationship, there must be a showing, in addition to the kinship, a reposal of confidence by one party and the resulting superiority and influence on the other party. ⁶ The relationship must be such as would lead an ordinarily prudent person in the management of his business affairs to repose that degree of confidence in the other party which largely results in the substitution of the will of the latter for that of the former in the material matters involved in the transaction. The doctrine of confidential relationship rests upon the principle of inequality between the parties, and implies a position of superiority occupied by one of the parties over the other. Mere confidence in one person by another is not sufficient alone to constitute such a relationship. The confidence must be reposed by one under such circumstances as to create a corresponding duty, either legal or moral, upon the part of the other to observe the confidence, and it must result in a situation where as a matter...