Cuthbert v. Heidsieck

• Decision Date: 11 February 1963
• Docket Number: No. 2,No. 49137,49137,2
• Parties: Edna M. CUTHBERT, Executrix of the Estate of Mabel S. Adams, Deceased, Respondent, v. Arthur H. HEIDSIECK, Appellant
• Court: Missouri Supreme Court

Page 583

364 S.W.2d 583

Edna M. CUTHBERT, Executrix of the Estate of Mabel S. Adams, Deceased, Respondent, v. Arthur H. HEIDSIECK, Appellant.

No. 49137.

Supreme Court of Missouri, Division No. 2.

Feb. 11, 1963.

Edward J. Houlihan, St. Louis, for appellant.

John B. Sharpe and Jesse E. Bishop, St. Louis, for respondent.

BOHLING, Commissioner.

This is a suit to set aside a gift made December 16, 1959, by Mabel S. Adams to Arthur H. Heidsieck, Mrs. Adams' attorney, of two hundred shares of United States Steel Corporation common stock on the ground of undue influence practiced by said attorney upon said client. We have appellate jurisdiction because of the amount in dispute. Mrs. Edna M. Cuthbert was appointed Guardian of the Estate of Mabel S. Adams, Incompetent, on September 26, 1960. She filed this suit January 25, 1961, as such guardian. A trial resulted in a decree and judgment for the plaintiff, the trial court retaining jurisdiction so far as necessary to effectuate said decree and judgment. Mrs. Adams died pending defendant's appeal, and plaintiff, as Executrix of the Estate of Mabel S. Adams, Deceased, has been substituted as party respondent.

Under plaintiff's petition and defendant's answer the following facts stand admitted: Plaintiff's capacity as guardian aforesaid. Mrs. Adams' ownership on or about December 16, 1959, of the 200 shares of United States Steel Corporation stock. Defendant, for a long time prior to December 16, 1959, was the trusted lawyer, financial advisor and confidant of Mrs. Adams and a fiduciary and confidential relationship existed between them. Mrs. Adams on December 16, 1959, transferred said stock to defendant as a gift. These admissions were offered in evidence.

Defendant's answer put in issue the other material allegations of plaintiff's petition, i. e.: That Mrs. Adams on December 16, 1959, (1) 'possessed failing eyesight'; (2) 'was physically in failing and infirm health'; (3) 'was in a state of declining mental vigor' and (4) 'was easily persuaded by those trusted by her in the handling of her financial and personal affairs'; and that, in breach of the fiduciary and confidential relationship then existing between them, defendant exercised undue influence, coercion and deception upon Mrs. Adams in procuring her gift of said stock to him without consideration.

Mrs. Mabel S. Adams, born January 2, 1880, was the wife of Lloyd L. Adams, a practicing lawyer of St. Louis city, who died in November, 1943. She continued to reside in St. Louis. She broke her hip January 31, 1960, was taken to a hospital, was there six weeks when she broke her other hip and fractured a wrist. She died January 23, 1962, without returning home. She was 80 years old January 2, 1960, a small, thin, active woman. Others of her age could not keep up with her. She had only four or five women friends. We briefly outline Mrs. Adams' activity prior to the breaking of her hip: She had been working for about 10 years for Louis Brooks, a lawyer, as a receptionist, answering the telephone and making notes, after 12:30 p. m. on Mondays, Wednesdays and Fridays. She could not typewrite. She had her evening meals at Hulling's Restaurant, 11th and Locust, four or five times a week, and she, Bernard J. Jostes, and defendant ate together quite frequently. After 1958 she went downtown practically every day, Tuesdays and Thursdays included, about 10:00 a. m. She roamed the streets and was in department stores until she went to work.

Arthur H. Heidsieck, defendant, a lawyer, was younger than Mr. Adams, and had assisted Mr. Adams in his practice.

Mrs. Adams executed a number of wills, which indicated that her relatives were Mrs. Edna Cuthbert, of Clayton, Missouri, and Mrs. Elinor Page, of Blanchester, Ohio, nieces, and Robert Miller, of Los Angeles, California, and Clark Butler, of Richmond Heights, Missouri, nephews. In her wills of April 8, 1955, and October 15, 1956, she named Arthur H. Heidsieck as executor. In her wills of September 13, 1958, October 10, 1958, and December 3, 1958, she made specific bequests of $15,000 to Arthur H. Heidsieck and appointed him executor of her estate. In her will of December 16, 1959 (the date of the transfer here involved), she made specific monetary bequests totaling $4,000 to her niece Mrs. Page and her two nephews, and named her niece Mrs. Cuthbert residuary beneficiary and executrix of her estate. The real parties in interest here are Mrs. Cuthbert, as residuary beneficiary, and defendant.

Mrs. Cuthbert was the only witness for plaintiff. She, as did some of defendant's witnesses, gave testimony on Mrs. Adams working for Mr. Brooks, eating at Hulling's Restaurant, and Mrs. Adams' physical condition. She testified to the following effect: After Mr. Adams' death she was very close to Mrs. Adams. Mrs. Adams started talking about defendant right after Mr. Adams' death. Defendant, as time passed, played an ever more important role in Mrs. Adams' life. 'The most important friend in her life was Mr. Heidsieck.' Mrs. Adams told witness many times she sought defendant's advice on legal matters, her wills, and financial matters relating to her stocks. Mrs. Adams never did have any business ability. She told witness defendant visited in her apartment and helped her, for instance, sewed buttons on her clothes. Witness thought she had heard Mr. Adams left an estate of $22,000. After her husband's death Mrs. Adams worked in the linen room of a hospital and witness knew defendant advised Mrs. Adams she could not live on the interest of $22,000 and should invest her money. Witness and her husband 'put Mrs. Adams and Mr. Heidsieck on the train for California in 1955.' She thought Mrs. Adams was away about a month, but didn't know. Mrs. Adams lived in a small apartment, about 5700 west. She was quiet and despondent the last two or three years.

September 24, 1958, Mrs. Adams had plaintiff accompany her to the Mercantile Trust Company to see what stocks she had in her lockbox and their value. Mrs. Adams had certificates for 415 shares of General Motors, 200 shares of United States Steel, 113 shares of Sun Oil, 100 shares of Bond Stores, 50 shares of Laclede Gas, 100 shares of Greyhound Bus, and 150 shares of Portland General Electric. Witness testified said stocks then had a market value of $51,438. At that time Mrs. Adams placed her box in the joint names of herself and witness. In November, 1959, Mrs. Adams had the Laclede Gas and Sun Oil stock issued in the joint names of herself and witness with the right of survivorship. Mrs. Adams' guardianship estate inventoried (November, 1960) $32,655.81, exclusive of the United States Steel stock. She informed Mrs. Cuthbert defendant had told her she was worth $62,000 in December, 1959.

From 1958 on Mrs. Adams made complaint about her eyesight, telling plaintiff she could not see. Plaintiff testified Mrs. Adams could not tell the difference between a $1 and a $5 bill, or a quarter and a nickel, and that witness read to Mrs. Adams letters received from a sister. Mrs. Adams could see well enough to be out on the streets.

Mrs. Cuthbert, following Mrs. Adams' injury and hospitalization, had occasion to enter her lockbox and discovered that the United States Steel stock was missing. She reported this to Mrs. Adams and, after talking with her, consulted Mr. John Sharpe, a lawyer. On March 17, 1960, Mrs. Adams signed the following letter addressed to Mr. Sharpe:

'This is your authority to act as my attorney on my behalf, to recover from Mr. Arthur Heidsieck, two hundred (200) shares of stock in United States Steel Corporation, which were registered in my name in December of 1959 and which I feel were transferred to Mr. Heidsieck without sufficient consideration.'

The evidence on behalf of defendant follows.

Ernst C. Stifel was a 'customer's man' for the A. G. Edwards brokerage firm of St. Louis. He knew Mrs. Adams, who had purchased stock through him on several occasions during the last ten or eleven years, and also knew Mr. Heidsieck. Mrs. Adams and defendant came to his desk December 16, 1959. Mrs. Adams said she wanted to transfer 200 shares of United States Steel stock to defendant. Mrs. Adams had the stock. (She had received the current dividend.) He informed them transfers were made at the cashier's cage and took them there. There is some confusion in this witness's testimony. Plaintiff stresses the following answer to whether Mrs. Adams or defendant gave the directions as to how the new certificates were to be made out: 'A As to who the new certificates were to be made out, I just don't remember whether Mr. Heidsieck or Mrs. Adams, but the point was----.' A receipt was made for the two certificates of 100 shares each and issued by the brokerage firm to 'Mabel S. Adams' for said stock to be transferred as per instructions. A girl was in charge of the cashier's cage. Asked: 'Now, who gave [the girl] the instructions to transfer as per instructions?' the witness answered: 'Mrs. Adams gave them to me and I gave them to the girl in the cage to transfer.' The girl asked Mrs. Adams to endorse the certificates, which Mrs. Adams did, and to wait for her receipt. Other testimony by this witness was to the effect Mrs. Adams directed the transfer of this stock to Mr. Heidsieck. Mrs. Adams' signatures endorsing the certificates to defendant were guaranteed by the A. G. Edwards brokerage firm. Mrs. Adams also executed and delivered the following statement, defendant's Exhibit A, dated at St. Louis, Mo., December 16, 1959:

'TO WHOM IT MAY CONCERN: This is to show that the Two Hundred (200) Shares of Common Stock of U. S. Steel was transferred to Arthur H. Heidsieck as a gift.'

Witness Stifel testified in chief Mrs. Adams executed defendant's Exhibit A while at the broker's office December 16th; that it was her signature but he was not certain he saw her sign it, and she afterwards explained why she was making this gift. On cross-examination he...