Estate of Mapes, In re

• Decision Date: 13 October 1987
• Docket Number: No. 69135,69135
• Citation: 738 S.W.2d 853
• Parties: In Re ESTATE OF George E. MAPES, Deceased. William L. CROOKS, et al., Appellants, v. James T. HOLCOMB, et al., Respondents.
• Court: Missouri Supreme Court

Page 853

738 S.W.2d 853

In Re ESTATE OF George E. MAPES, Deceased.

William L. CROOKS, et al., Appellants, v. James T. HOLCOMB, et al., Respondents.

No. 69135.

Supreme Court of Missouri,

En Banc.

Oct. 13, 1987.

Rehearing Denied Nov. 17, 1987.

Charles A. Powell, Jr., Macon, for appellants.

Ralph Max Humphreys, Trenton, for respondents.

BILLINGS, Chief Justice.

Plaintiffs are heirs at law and residuary legatees under the will of George E. Mapes. They appeal from an order of the trial court directing a verdict for defendants James and John Holcomb in an action to discover estate assets. The Missouri Court of Appeals, Western District, affirmed. Transfer was granted to examine the standard of proof required to establish a presumption of fraud and undue influence where money or property is transferred from a client to his attorney via a joint account. Reversed and remanded.

Decedent George E. Mapes died October 25, 1980. His will dated January 10, 1980, and a codicil dated October 23, 1980 were admitted to probate. Defendant James Holcomb, a Missouri lawyer, drew the will and codicil. James Holcomb was named executor in the will and his brother, defendant John Holcomb, was named alternate executor. Defendants were grand-nephews of the decedent but were not named as beneficiaries in the will. The decedent's brothers and sisters and their descendants were the named residuary legatees.

Probate assets consisted of real estate valued at $95,000.00 and personal property valued at $52,044.00. In addition, the decedent left joint deposits totaling $124,554.00 in his name and James and/or John Holcomb as survivors. Upon discovery of these non-probate assets, the plaintiffs commenced this suit to have the joint accounts included in Mapes' estate.

At trial, plaintiffs contended the joint deposits to attorney James Holcomb and his brother were the product of fraud and undue influence. They claimed that a presumption of fraud and undue influence arises when a client transfers money or property to his attorney. At the close of plaintiffs' case the trial court directed a verdict for the defendants. The court concluded plaintiffs failed to meet their burden of proving fraud or undue influence and also failed to establish that the transfer to the Holcombs was made during the course of an attorney-client relationship between George Mapes and James Holcomb. During argument on the motion for a directed verdict plaintiffs' requested leave to reopen their case. Plaintiffs sought to introduce defendants' answers to interrogatories and to call defendant James Holcomb to the witness stand in order to show the existence of an attorney-client relationship at the time the joint accounts were created. The court denied the request.

Maintenance of joint accounts is conclusive evidence, absent proof of fraud or undue influence, that the accounts are the property of the joint tenants and that title passes to the survivor. Section 362.470.1, RSMo 1986; Pollock v. Brown, 569 S.W.2d 724, 731 (Mo. banc 1978); In re Estate of LaGarce, 487 S.W.2d 493, 500-01 (Mo. banc 1972). The conclusive presumption of joint tenancy, however, is subject to rebuttal on proof of fraud or undue influence. In re Estate of Hayes, 658 S.W.2d 956, 958 (Mo.App.1983).

Where a gift of money or property is made by a client to his attorney during the course of the attorney-client relationship, a rebuttable presumption of fraud and undue influence is established. In Laspy v. Anderson, 361 S.W.2d 680 (Mo.1962), this Court stated:

Public policy dictates the necessity to protect the confidential and fiduciary attorney-client relationship. Consequently when a conveyance from a client to an attorney is attacked it is considered presumptively fraudulent and the burden is on the attorney to prove by convincing evidence that the transaction evidenced by the conveyance, as well as the conveyance itself, was fair and equitable in every respect.

Id. at 682. This rule is not restricted to dealings involving transactions in which the attorney is representing the client, but extends to all transactions where the relationship between the parties would give the attorney some advantage over the client. Flanagan v. DeLapp, 533 S.W.2d 592, 596 (Mo. banc 1976).

Defendants rely on cases which hold that to establish a presumption of fraud and undue influence the challenging party must also prove that the transfer was the result of some active effort on the part of the beneficiary to obtain the gift. See Pasternak v. Mashak, 392 S.W.2d 631 (Mo.App.1965); In re Patterson's Estate, 383 S.W.2d 735 (Mo.1964); Flynn v. Union National Bank of Springfield, 378 S.W.2d 1 (Mo.App.1964); and Michaelson v. Wolf, 264 Mo. 356, 261 S.W.2d 918 (1953). These cases, with the exception of Pasternak, involved gifts made to lay person fiduciaries, not to attorneys, and are inapplicable here. Pasternak applied the lay person fiduciary standard to a gift made to an attorney in a will. This Court declines to follow Pasternak and reaffirms the general rule set out in Laspy. Where a transfer is made from a client to an attorney, in the course of the attorney-client relationship, the attorney should bear the burden of proving that the transaction was fair, irrespective of whether he actively procured the gift. Attorneys should be held to a higher standard than lay fiduciaries.

In this case, decedent Mapes established several joint accounts for the benefit of the brothers Holcomb. These transfers, if made during the course of an attorney-client relationship between Mapes and James Holcomb, were presumptively fraudulent. If the presumption was established, the plaintiffs made out a prima facie case precluding the trial court from directing a verdict for the defendants. Cuthbert v. Heidsieck, 364 S.W.2d 583, 587 (Mo.1963). The record reveals some evidence of a...