Dibel v. Meredith
| Decision Date | 15 June 1943 |
| Docket Number | 46205. |
| Citation | 10 N.W.2d 28,233 Iowa 545 |
| Parties | DIBEL v. MEREDITH. |
| Court | Iowa Supreme Court |
Luther M. Carr, of Newton, and Putnam, Putnam Fillmore & Putnam, of Des Moines, for plaintiff-appellant.
Royal & Royal, of Des Moines, for defendant-appellee.
Preliminary to a consideration of the various questions involved in this appeal, we believe it will be helpful to briefly set forth some of the salient facts and events leading up to the bringing of the action herein.
Sadie A Carter, at times spoken of as Mrs. Morgan Carter, died on August 27, 1941, at Des Moines, Iowa, at the home of her nephew L. K. Meredith, defendant herein. Her husband Morgan Carter, a resident of Jasper County, Iowa died in 1935. She was childless. She and her husband had lived in Jasper County for many years, the more recent being in the town of Monroe in that county. She was a resident of that county at her death and her estate was there opened and is still pending.
She made a will on November 10, 1939, and a codicil on March 25, 1941 both being drawn by Luther M. Carr, an attorney of Newton Iowa. Mr. Carr had previously advised her on various legal matters. The will and codicil were probated on October 5, 1941, and J. A. Dibel of Monroe, Iowa, a long time friend of Mrs. Carter and her husband, was appointed executor. He is the plaintiff in this action and Mr. Carr is his attorney as such executor. At the time she lived in Monroe and at her death Mrs. Carter owned a 122-acre farm near that place. At the time she made her will she owned a dwelling, her homestead, in Monroe. At her death she had money in two of the Newton banks and in one bank in Monroe. Under the will the farm was given to an elder sister, Emma Meredith, mother of L. K. Meredith, for life and the remainder to L. K. Meredith and a brother. They were also given personal belongings and household furniture. All other property, including cash in the banks and the homestead in Monroe, was given to two nieces and two nephews, all nonresidents, share and share alike.
Emma Meredith died in January, 1941. Mrs. Carter had lived with her about a year prior to her death. Following the death of Emma, Mrs. Carter lived with L. K. Meredith until about June 1, 1941, when she returned to her old home at Monroe, boarding and living there with old friends. On August 7, 1941, she suffered a stroke of apoplexy and the defendant and his wife took her to their home in Des Moines where she remained until her death three weeks later.
In December, 1939, the homestead in Monroe was sold and settlement was made in January following. The proceeds, together with a small additional amount were taken by Mrs. Carter to Des Moines and were there deposited in her savings account in the Bankers Trust Company of Des Moines and on May 21, 1941, there was in that account the sum of $2,539.56.
Following the death of Mrs. Carter, plaintiff sought to learn the whereabouts or disposition of this sum and upon inquiry he learned that such amount, with the exception of $5 had been withdrawn from the bank on May 21, 1941, by L. K. Meredith, upon withdrawal slips signed by Mrs. Carter. Plaintiff in company with L. K. Meredith went to Newton the following day to make arrangements for the funeral and while there and in the presence of Attorney Carr Meredith said that he was afraid that they would find the $2,500 missing from the Des Moines bank. He expressed ignorance as to its whereabouts. Shortly thereafter and on several occasions plaintiff and his attorney contacted defendant to make inquiry as to what had become of the funds withdrawn. On one occasion, Mrs. Meredith was present. They expressed ignorance as to its whereabouts, and Dr. Meredith suggested the names of four or five persons who might have gotten it from Mrs. Carter. Being unable to get any satisfactory explanation from Meredith this action was brought. Following this and on December 23, 1941, plaintiff brought this action in equity for discovery and accounting under the statute and alleged that this money had been deposited in the bank in the name of Sadie A. Carter and that L. K. Meredith had secured possession of it and refused to pay it over to the executor, and prayed that there be an accounting and that defendant be required to pay over to the executor the sum of $2,534.56 and praying for judgment for said amount against the defendant and for costs and general equitable relief.
On February 24, 1942, the defendant filed what in effect was a general denial of the claims made by plaintiff, but admitted that Sadie A. Carter had died on August 27, 1941, and that certain exhibits attached to the pleadings bore the true signature of Mrs. Sadie A. Carter. He prayed that the petition of plaintiff be dismissed. The cause was tried in equity in May, 1942, and on June 2, 1942, the lower court dismissed the petition of plaintiff on its merits and taxed the costs equally. The plaintiff has appealed.
In brief appellant alleges that L. K. Meredith, a nephew of Mrs. Carter, induced her to dispose of her home in Monroe and move to Des Moines; that he arranged for, directed and managed the deposit of the proceeds of the sale of the property in the Bankers Trust Company and that later and without her knowledge by means of withdrawal slips signed by her in blank, he withdrew from her account in said bank a sum in excess of $2,500 and that at the time the suit was brought had possession of it and refused to turn it over to the executor of the estate, as property belonging thereto.
Appellant makes the claim that by reason of the situation and the relationship of the parties and the dealings between Mrs. Carter and L. K. Meredith a confidential relationship arose and existed between appellee and Mrs. Carter and that by reason thereof the appellee obtained possession of the funds on deposit in the bank.
We will first take up and consider the claim of appellant that there existed a confidential relationship between Mrs. Carter and L. K. Meredith. We think that a fair consideration of the evidence together with legitimate inferences arising therefrom sustain this claim. We think that appellant has established such claim. Before reviewing the facts which we feel point to that conclusion it will be well to call attention to some of the legal principles involved. Confidential relationship is a very broad term and is not at all confined to any specific association of the parties to it. In law it has been defined or described as any relation existing between parties to a transaction wherein one of the parties is duty bound to act with the utmost good faith for the benefit of the other party. In its broadest connotation the phrase embraces those multiform positions in life wherein one comes to rely on and trust another in his important affairs. A confidential relationship arises whenever a continuous trust is reposed by one person in the skill and integrity of another, and so it has been said that all the variety of relations in which dominion may be exercised by one person fall within the general term "confidential relation". 15 C.J.S. page 822. Pomeroy Equity, 3d Ed., section 956, gives the above as being the true principle. In the discussion the author cites the holding of Turner, L. J. in Rhodes v. Bate, L.R. 1 Ch. 252, 257 as follows: ' Following the above citation the author states that it is the rule that in all instances where two parties in a confidential relation consciously and intentionally deal and negotiate with each other, each knowingly taking part in a transaction and there results from their dealing some conveyance, contract or gift, the principle literally and directly applies. 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, or full knowledge, and of independent consent and action. For a full and comprehensive discussion of this principle, see the case of Curtis v. Armagast, 158 Iowa 507, 138 N.W. 873. The holding of the court therein as to the application of the rules as to confidential relations has been adhered to by a continuous line of decisions of this court. In the late case of Sinco v. Kirkwood, 228 Iowa 1020, 291 N.W. 873, 878, Hale, J., speaking on that subject, used the following language: "It is true that in an action to set aside a deed, under ordinary conditions, the burden is upon the plaintiff, except where confidential or fiduciary relations are established, in which case it is incumbent upon the person claiming under the deed to establish the bona fides of the transaction." In support of this principle, see Johnson v. Johnson, 196 Iowa 343, 191 N.W. 353. Merritt v. Easterly, 226 Iowa 514, 284 N.W. 397. In the last cited case Bliss, J., made a thorough review of the holdings on the subject pointing out therein the distinction between the terms "fiduciary relationship" and "confidential relationship".
It was the holding in the cited case based upon authority...
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