Dent v. Wright

• Decision Date: 30 October 1995
• Docket Number: No. 94-901,94-901
• Citation: 909 S.W.2d 302,322 Ark. 256
• Parties: Orena DENT, Appellant, v. Lula WRIGHT and J.L. Wright, Jr., Appellees.
• Court: Arkansas Supreme Court

Page 302

909 S.W.2d 302

322 Ark. 256

Orena DENT, Appellant, v. Lula WRIGHT and J.L. Wright, Jr., Appellees.

No. 94-901.

Supreme Court of Arkansas.

Oct. 30, 1995.

Murrey L. Grider, Pocahontas, for appellant.

Robert H. Crank, Walnut Ridge, for appellees.

DUDLEY, Justice.

On May 6, 1993, plaintiff Orena Dent gave a joint and several general power of attorney to her sister, defendant Lula Wright, and her nephew, defendant J.L. Wright, Jr. Lula Wright is the mother of J.L. Wright, Jr. On the same day plaintiff opened a joint bank account in her and her sister's names. There was no designation to the banking institution that the account was not to be the property of both joint tenants. See Ark.Code Ann. § 23-32-1005(1)(A) (Repl.1994). Both plaintiff and defendant Lula Wright wrote checks on the account. Appellant wrote most of the checks, but there is no question that all of the checks written by defendant Lula Wright were for the benefit of plaintiff. On March 14, 1994, about ten months after plaintiff opened the joint bank account, plaintiff gave bills of sale to defendant J.L. Wright, Jr. for an automobile and for a mobile home. The bill of sale for the automobile reflected a consideration of one dollar, and the bill of sale for the mobile home reflected a consideration of one thousand dollars, but, in fact, no consideration was paid. On March 24, 1994, defendant Lula Wright withdrew all of the money from the joint banking account. Defendant Lula Wright does not contend that she is the owner of the money. Instead, she states that it is plaintiff's money, but if the plaintiff's name remained on the account, she would waste the money and become an indigent.

Later, plaintiff decided that she wanted back the car, the mobile home, and the money, and asked for their return. Both defendants refused. Plaintiff employed an attorney who made formal demand upon both defendants for the return of the property. Defendants declined. Plaintiff filed this one suit against the two separate defendants. The chancellor ruled in favor of each of the defendants, and plaintiff appeals. We affirm in part and reverse in part. For clarity, we discuss the suit against the separate defendants in the first two separate parts of this opinion, and discuss a subject-matter jurisdiction issue in the third part. I.

On appeal, plaintiff contends that the chancellor erred in ruling that J.L. Wright did not exercise undue influence or commit fraud on the plaintiff to obtain the bills of sale to the automobile and mobile home. Defendant J.L. Wright, Jr. testified that plaintiff told him she wanted to live in a nursing home and wished to give him her car and mobile home. He said he knew that she gave other relatives property amounting to about $60,000, and later became angry at those relatives and demanded back the property. In fact, she previously had given the same car and mobile home to another nephew and then sued the nephew for return of property. He testified that he told her the only way he would accept the car and mobile home was upon the advice of her attorney and through a valid legal transfer of the titles. He testified that he told her to follow the advice of her lawyer. He testified that he and Lula Wright subsequently took plaintiff to her attorney, J.F. Sloan, III, for advice.

Mr. Sloan, a respected attorney in the community, testified that he previously represented plaintiff; in fact, he had represented her in a suit against another nephew, William Sexton, to recover the same car and mobile home. He stated that plaintiff called his office for an appointment, and, at the appointed date, plaintiff, J.L. Wright, Jr. and Lula Wright came to his office. He said that he advised plaintiff against transferring the titles to defendant J.L. Wright, Jr., but she insisted on so doing. He testified that he did not witness any encouragement or inducement being made by either of the Wrights, and in fact their actions were "to the contrary" while plaintiff was "insistent." He testified that plaintiff was "impatient" because he did not prepare the documents as quickly as she wanted.

Plaintiff did not testify to any undue influence or fraud. She testified that she did not recall conveying her car and mobile home to defendant J.L. Wright, Jr. However, she also testified that she remembered going to her attorney's office and signing some papers, but did not remember what they were. She testified, "When my sugar gets high or low or whatever happens there is times that I don't remember."

A niece, Freda Butler, testified that plaintiff gave her $17,500.00 on July 19, 1991, or almost three years before she conveyed the car and mobile home to defendant. She testified that plaintiff gave William Sexton, another nephew, money, the same car, and the same mobile home, but then became "disturbed" about those gifts. She further testified that plaintiff gave Sexton and a stepdaughter equal amounts of money at the same time she gave her the $17,500.00. She stated she observed that plaintiff was confused at times, but not when she gave her money.

Chancery decisions are reviewed de novo on appeal, but the appellate court will not reverse the findings of the chancellor unless they are clearly erroneous. RAD-Razorback Ltd. Partnership v. B.G. Coney Co., 289 Ark. 550, 713 S.W.2d 462 (1986). A finding is clearly erroneous "when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." Id. at 553, 713 S.W.2d at 464.

It was tacitly admitted that defendant J.L. Wright, Jr. was in a fiduciary relationship with appellant at the time he obtained the titles because it was admitted that he held a power of attorney from plaintiff. A person who holds power of attorney is an agent, and it has long been recognized that a fiduciary relationship exists between principal and agent in respect to matters within the scope of the agency. Yahraus v. Continental Oil Co., 218 Ark. 872, 239 S.W.2d 594 (1951). Transactions between persons connected by fiduciary relations will be closely scrutinized when the relation implies that one person has controlling influence over the other. Hawkins v. Randolph, 149 Ark. 124, 231 S.W. 556 (1921). However, even in fiduciary relationships this court has refused to find undue influence in the transfer of property when there has been no showing that the donees said or did anything to put the donor in a position of fear or that they committed fraud on her or overreached her in any way. Howard v. Glaze, 292 Ark. 28, 727 S.W.2d 843 (1987). This is true even when there is evidence to raise suspicion about impure motives. Id. at 31, 727 S.W.2d at 846.

It has been noted that there are not a lot of Arkansas cases on the subject of undue influence or duress. See Cox v. McLaughlin, 315 Ark. 338, 867 S.W.2d 460 (1993). However, it is generally recognized that in order to invalidate a contract, undue influence must operate to deprive a party of his or her free will. 17A Am.Jur.2d Contracts § 237 at 240 (1991). When unfair advantage in a transaction is rendered probable because of superior knowledge of the matter derived from a fiduciary relationship; from overmastering influence on the one side; or from weakness, dependence, or trust justifiably reposed on the other side, it is incumbent on the stronger party to show that no deception was practiced. Id., see also Restatement (Second) of Contracts § 177 (1979).

Here, there was no proof that defendant J.L. Wright, Jr. took unfair advantage of plaintiff because of the fiduciary relationship, that he took advantage of her because of trust, or that he deceived plaintiff in any manner. There was substantial evidence that the conveyances were entirely of plaintiff's volition, and there was substantial proof that J.L. Wright, Jr. did not practice any deception. Thus, we affirm the chancellor's ruling on this issue. Because we affirm the ruling of the chancellor we need not address the propriety of plaintiff's asking punitive damages in chancery court.

II.

Plaintiff next contends that the trial court erred in refusing to rule that Lula Wright wrongfully converted the money in the joint bank account. The tort of conversion is committed when a party wrongfully commits a distinct act of dominion over the property of another which is inconsistent with the owner's rights. Reed v. Hamilton, 315 Ark. 56, 864 S.W.2d 845 (1993). The bank account that was closed was a joint tenancy with right of survivorship. Ark.Code Ann. § 23-32-1005. Under the foregoing statute, defendant Lula Wright was an "owner" with "rights." The right to withdraw funds is one of the rights enjoyed by a joint tenant of a bank account. Nall v. Duff, 305 Ark. 5, 805 S.W.2d 63 (1991). The signature card for the joint bank account provided, by marking, that the account was "Joint--With Survivorship (and not as tenants in common)." Defendant Lula Wright's act of withdrawing the funds from the joint account was consistent with her rights as a cotenant of the account.

However, a joint tenant may not, by withdrawing funds in a joint tenancy, acquire ownership to the exclusion of the other joint tenant. In Hogan v. Hogan, 313 Ark. 374, 855 S.W.2d 905 (1993), we held that even though a joint tenant may withdraw the entire fund, one who does withdraw funds in excess of his moiety is liable to the joint tenant for the excess so withdrawn. Id. at 380, 855 S.W.2d at 909. In that case, two joint tenants cashed a certificate of deposit that had been purchased by their father, the third joint tenant, from funds belonging entirely to him. Id. at 375, 855 S.W.2d at 906. The trial court refused to give relief to the father, and granted summary judgment on the premise that the above statute provides that any joint tenant can redeem a certificate of deposit and whoever redeems it is entitled to the entire amount. Id. at 376, 855 S.W.2d at 906. In...