Flanagan v. DeLapp

• Citation: 533 S.W.2d 592
• Decision Date: 08 March 1976
• Docket Number: No. 59053,59053
• Parties: Eunice FLANAGAN, Individually, and Eunice Flanagan, Administratrix of Joseph Francis Moore, Deceased, Respondents, v. G. L. DeLAPP, Jr., et al., Appellants.
• Court: United States State Supreme Court of Missouri

Page 592

533 S.W.2d 592

Eunice FLANAGAN, Individually, and Eunice Flanagan Administratrix of Joseph Francis Moore, Deceased Respondents, v. G. L. DeLAPP, Jr., et al., Appellants.

No. 59053.

Supreme Court of Missouri, En Banc.

March 8, 1976.

William E. Shull, Duncan & Russell, Kansas City, for appellants.

Arthur Kincaid, Hale, Kincaid, Waters & Allen, Liberty, for respondents.

FINCH, Judge.

On March 31, 1971, seven days before his death, Joseph Francis Moore (decedent) executed a warranty deed conveying 275 acres of farmland (2 tracts), plus a 7/12ths interest in a 11.52 acre tract, to G. L. DeLapp, Jr., an attorney, and his wife, Elizabeth J. DeLapp, a niece of decedent. This suit was brought to set aside that deed on the basis of alleged undue influence by G. L. DeLapp, Jr. (hereinafter DeLapp). The trial court found that execution of the deed was the result of undue influence by DeLapp and ordered the conveyance set aside and the deed cancelled. Only DeLapp appealed from that judgment, the appeal being to the Missouri Court of Appeals, Kansas City District, which affirmed. Thereafter, on application of DeLapp, we ordered the case transferred pursuant to Art. V, § 10, Mo. Const. We now review the case as though here on direct appeal. We affirm.

Decedent (age 74) died intestate on April 7, 1971, leaving as his surviving heirs at law, a sister, Eunice Flanagan (age 71), and a brother, Thomas Corydon Moore (age 75), ¹ who had been declared incompetent in 1969. Mrs. Flanagan was appointed administratrix of decedent's estate. She then brought this suit individually and as administratrix (pursuant to probate court authorization), naming as defendants DeLapp and his wife, Elizabeth, grantees in the deed, the surviving incompetent heir at law, Thomas Corydon Moore, and the surviving guardian of his estate, Elizabeth J. DeLapp. ²

The issues presented on this appeal concern (1) the sufficiency of the evidence to show undue influence by DeLapp in the execution of the deed by Joseph, and (2) whether the court erroneously excluded proffered testimony of DeLapp on the basis of § 491.010, ³ the dead man's statute.

The evidence discloses that on March 31, 1971, Joseph became ill. When he finished his breakfast that morning, he could not get up from the table. Mrs. Flanagan, who had been living with Joseph since 1969, had to help him back to bed. The same thing happened at lunch. Later that afternoon when she tried to get him off the bed, his head fell back and he could not get up. Mrs. Flanagan then called the doctor and at his direction called an ambulance and had Joseph taken to the Cameron Community Hospital. Records with reference to his admission to the hospital show that his condition was diagnosed as a stroke syndrome ⁴ and that his entire left side, including his hand and arm, were weak and had no motor voluntary movement. He could not move his left arm or leg, could not get out of a chair, and could not walk. The impression as record at that time in the hospital records was that the patient had suffered cerebral thrombosis with left hemiparesis.

In addition to calling the doctor, Mrs. Flanagan called DeLapp and told him what she was doing. Later that same day, he came by and picked up Mrs. Flanagan and the two of them went to the hospital. En route, according to the testimony of Mrs. Flanagan, DeLapp told her that he was going to get Joseph to sign a deed conveying his farms to DeLapp and his wife, Betty. Mrs. Flanagan testified thus with reference to that conversation:

'I said first he couldn't do it, and he said he had to because of the taxes; that the estate taxes would be so big that he had to have this so that we wouldn't have to pay those taxes, and he said if Joe--if half of Joe's estate went into Tom's estate, then the taxes on Tom's estate, when he died, would be especially high, and that he has to do it because of the taxes and that was the reason he was going to do it.'

Mrs. Flanagan further testified that so far as she knew, there had been no prior conversations with Joseph with reference to conveyance of his farms.

On arriving at the hospital, DeLapp asked Mrs. Hines, a receptionist at the hospital who was a notary public, to accompany them to Joseph's room. As they passed a small chapel, DeLapp told Mrs. Flanagan to wait in there and he would take care of the matter. She went into the prayer room and in 5 or 10 minutes DeLapp came back and displayed a deed signed by Joseph conveying the property in question to G. L. DeLapp, Jr. and Elizabeth J. DeLapp, husband and wife, subject to a life estate in the grantor.

Mrs. Hines, who acknowledged the deed in question, testified as follows with reference to the signing of the deed:

'Mr. DeLapp came up and told me Mr. Moore was ready to sign the papers and I walked down the hall with Mr. DeLapp and we didn't have any room. We had to put him in the hall that night--I called it the alcove--and when we got in the room, Mr. DeLapp said to Mr. Moore, 'Joe, we are down here to have you sign the paper and this is Helen Hines and she is a notary.' And he lifted Joe up and he signed the papers. Seemed like he signed two.'

Mrs. Hines testified that she then went back to her desk and completed the acknowledgment of the deed.

DeLapp was not permitted to testify as to what occurred when the deed was signed or with reference to his conversations with Mrs. Flanagan.

In ruling that the deed should be set aside on account of undue influence, the trial court determined (1) that as a result of an attorney-client relationship found to exist between Joseph and DeLapp there was a presumption of undue influence by DeLapp which was not overcome by evidence, and (2) that the evidence affirmatively demonstrated that undue influence by DeLapp existed in fact.

We consider first the issue of whether a presumption of undue influence exists in this case as a result of an attorney-client relationship.

It is an almost universal rule that any client's transfer of his property to his attorney is subject to being set aside as resulting from undue influence unless the attorney is able to meet the burden of proving that the transaction was fair and equitable. In 7 Am.Jur.2d, Attorneys at Law, § 95 (1963), it is stated that '(I)t is presumed that undue influence of fraud attaches to any assignment or conveyance that an attorney takes from his client while the relation of attorney and client exists.' Similarly, 7 C.J.S. Attorney and Client § 128 (1937) states:

'* * * The general rule that all transactions and dealings between attorney and client are subject to close scrutiny and presumptively fraudulent or the result of undue influence applies with full force, however, to any purchase or acquisition by an attorney of his client's property. Hence, a transfer, conveyance, or assignment of property by a client to an attorney is subject to avoidance and being set aside as constructively fraudulent or the result of undue influence, except to the extent that it operates as a payment of reasonable and proper fees, if the attorney fails to discharge his burden by showing that the transaction was fair, equitable, and honest, for an adequate consideration, and that the client had the benefit of impartial advice or was fully informed of the nature and effect of his act so that he was in the same position as if he had dealt a stranger. * * *'

See also 7 C.J.S. Attorney and Client § 129 (1937); 7 Am.Jur.2d, Attorneys at Law, § 96 (1963).

In Missouri the rule is in accord. It is stated in Laspy v. Anderson, 361 S.W.2d 680, 682 (Mo.1962), as follows 'The law is well established in this state and elsewhere that 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. (Citing cases).'

Another Missouri case announcing such a rule is Bybee v. S'Renco, 316 Mo. 517, 291 S.W. 459 (1926). See also Cuthbert v. Heidsieck, 364 S.W.2d 583 (Mo.1963).

Appellant DeLapp does not really question the foregoing rule. Rather, he contends that it is inapplicable in this case on the theory that although it was stipulated that DeLapp had served continuously as attorney for Joseph and Elizabeth as coguardians of the estate of Thomas C. Moore from the time the guardianship was created until the date of Joseph's death, it was not shown that he had acted as attorney for Joseph individually in any instance. The issue squarely presented is whether the attorney-client relationship which existed with reference to the guardianship estate also resulted in such a relationship applicable to transactions involving DeLapp and Joseph individually.

While it is true that the evidence did not disclose that DeLapp had served as attorney for Joseph in any individual matters, it also was true that the evidence disclosed that Joseph had no other attorney handling such matters. Thus, the only attorney-client relationship which Joseph had with any lawyer, so far as the evidence discloses, was the one with DeLapp in connection with the guardianship of the estate of Joseph's brother. That relationship had continued over a period of time and was one in which Joseph would look to and rely upon DeLapp for professional and confidential advice and information. It is unrealistic to conclude that said relationship and confidence existed only so long as DeLapp dealt with matters in the brother's estate but disappeared completely when he dealt with Joseph about a conveyance of his own property. This is particularly true in this case since, according to DeLapp's explanation to Mrs. Flanagan, the objective of the conveyance was to avoid having part of the property pass to the guardianship...