Guardianship of Chandos, In re

• Decision Date: 29 December 1972
• Docket Number: CA-CIV,No. 2,2
• Parties: In the Matter of the GUARDIANSHIP OF the Person and Estate of Allan J. CHANDOS, An Incompetent. Arthur L. RANES and Kathleen Rosa Ranes, husband and wife, appellants, v. FIRST NATIONAL BANK OF ARIZONA, Successor Guardian of the Estate of Allan J. Chandos, an Incompetent, Appellee. 1153.
• Court: Arizona Court of Appeals

Page 524

504 P.2d 524

18 Ariz.App. 583

In the Matter of the GUARDIANSHIP OF the Person and Estate of Allan J. CHANDOS, An Incompetent. Arthur L. RANES and Kathleen Rosa Ranes, husband and wife, appellants, v. FIRST NATIONAL BANK OF ARIZONA, Successor Guardian of the Estate of Allan J. Chandos, an Incompetent, Appellee.

No. 2 CA-CIV 1153.

Court of Appeals of Arizona, Division 2.

Dec. 29, 1972.

Williams, Ryan & Herbolich, P.C., by Michael J. Herbolich, Douglas, for appellants.

Gentry, McNulty & Borowiec, by Robert A. Hewlett, Bisbee, for appellee.

HATHAWAY, Judge.

Arthur Ranes and his wife, Kathleen, defendants in the superior court, have appealed from an order in favor of the appellee bank requiring them to execute a quit claim deed of a parcel of property which they received by virtue of a deed of gift. The order was predicated upon the court's findings that a confidential relationship existed between the donor, Allan J. Chandos, and the defendants-donees, and that the gift was procured in violation of the confidential relationship.

Mr. Chandos, a man of advanced age, and defendants were very close friends, and as a result of such friendship, Mr. Chandos lived with the defendants. On May 4, 1970, defendants filed a petition in superior court for appointment as guardians of the person and estate of Allan J. Chandos, an alleged incompetent; four days later, Mr. Chandos executed and delivered a gift deed of a parcel of improved real property situated in California to defendants. Shortly thereafter, defendants were appointed guardians of Allan J. Chandos.

Certain irregularities arose in defendants' administration of the guardianship estate and the court, Sua sponte, issued an order to defendants ordering them to appear and show cause why they should not be required to account and why a successor guardian should not be appointed. After testimony was heard, the First National Bank of Arizona, appellee herein, was appointed successor guardian of the estate and appellants were ordered to turn over all documents and assets in their possession to appellee.

After appellants filed an accounting with the court, appellee bank filed a petition for a decree against them for failure to render a true accounting, for conversion of the assets of the estate to their own use, and, in particular, praying that the court order appellants to execute a quit claim deed in favor of Allan J. Chandos of the real property reported to have been conveyed by gift deed from Chandos to appellants. The trial court gave judgment in favor of appellee decreeing that the subject gift deed be set aside as fraudulent and void, and requiring the appellants to execute a quit claim deed in favor of Allan J. Chandos.

Appellants have presented three questions for review, all three challenging the sufficiency of the evidence to sustain the trial court's findings. Consideration of the following single question we find dispositive of this appeal:

Did substantial evidence establish the existence of a confidential relationship and breach of that relationship?

In reviewing the sufficiency of the evidence, the test to be applied by an appellate court is whether or not there is any substantial evidence to support the findings. All questions of weight and credibility of testimony are for the trier of fact and cannot be set aside by the reviewing court although such court would have determined the controversy in a different manner. Jackson v. Burke, 124 Cal.App.2d 519, 269 P.2d 137 (1954).

Fraud is classified under two major headings, actual and constructive. The former is distinguished by the presence of an actual intent to deceive while the latter, with which we are here concerned, is characterized by a breach of a duty arising out of a fiduciary of confidential relationship. In re McDonnell's Estate, 65 Ariz. 248, 179 P.2d 238 (1947); Bell v. Bell, 44 Ariz. 520, 39 P.2d 629 (1934). Once a confidential relationship is found to exist, there is a presumption of constructive fraud which shifts the burden of proof to defendants to show, by clear evidence, that they acted with entire fairness and that the other party acted independently, with full knowledge and of his own volition free from undue influence. Bolander v. Thompson, 57 Cal.App.2d 444, 134 P.2d 924 (1943).

Whether a confidential relationship exists between parties to a transaction is a question of fact. Kloehn v. Prendiville, 154 Cal.App.2d 156, 316 P.2d 17 (1957). A confidential relation has been defined as follows:

'A relationship which arises by reason of kinship between the parties, or professional, business, or social relations that would reasonably lead an ordinarily prudent person in the management of his business affairs to repose that degree of confidence in another which largely results in the substitution of that other's will for his in the material matters involved in the transaction; or where the parties occupy relations, whether legal, natural, or conventional in their origin, in which confidence is naturally inspired, or, in fact, reasonably exists.' 15A C.J.S. Confidential, p. 352.

Appellants contend that their relationship with Mr. Chandos was nothing more than a friendly relationship and as such, not enough to constitute a fiduciary or confidential relationship; further, they contend that Mr. Chandos' confidence or...