Ham v. Ham

Decision Date13 December 1926
Docket Number26048
CourtMississippi Supreme Court
PartiesHAM et al. v. HAM et al. [*]

Division A

1 DEEDS. Fiduciary relation in fact between parties to deed sought to be set aside held shown, making prima facie case of fraud. Evidence in suit to set aside deed held to show between the parties to the deed, who were partners and brothers, a fiduciary relation in fact, making deed prima facie fraudulent.

2 DEEDS. Conveyances between parties to fiduciary relation whether it be in fact or conventional, are governed by same rules as to presumption of fraud.

Rules governing deeds between parties to a fiduciary relation in fact are the same as those where the parties occupy a conventional fiduciary relation, as to presumption of fraud.

3. DEEDS. Fiduciary relation between parties to deed raises presumption of invalidity.

There is a presumption of invalidity of deed between parties to fiduciary relation, requiring evidence of full knowledge and independent consent and action.

4. DEEDS. Party claiming under deed between parties to fiduciary relation has burden of overcoming presumption of invalidity. Burden of overcoming presumption of invalidity of deed between parties to fiduciary relation is on party claiming under it.

5. DEEDS. Full Knowledge and independent consent and action of grantor, in deed to one in confidential relation held not shown by the evidence.

Evidence in suit to set aside deed between parties in confidential relation held not to show grantor at time of its execution had full knowledge of property's value or of its relation thereto of the consideration, or that it was executed of his own independent consent and action.

6. DEEDS. Independent consent and action of grantor in deed to one in confidential relation is provable by showing he acted on advice of competent person disconnected from grantee.

The usual if not the only way of proving independent consent and action of grantor in deed to one in confidential relation with him is by showing that in making deed he acted on advice of competent person disconnected from grantee, and devoted wholly to grantor's interest.

HON. E. N. THOMAS, Chancellor.

APPEAL from chancery court of Washington county, HON. E. N. THOMAS, Chancellor.

Suit by J. L. Ham and others against Eugene Ham and others. From an adverse decree, complainants appeal. Reversed and remanded.

Reversed and remanded.

Shands, Elmore & Causey and Boddie & Farish, for appellants.

The conveyance should have been cancelled. There is a clear showing by the evidence that at the time of the conveyance a confidential relation existed as a fact and also as a matter of law. Consider the "single circumstance" of a confidential relation. 2 Pomeroy's Eq. Juris., paragraphs 955-56. To instance a few cases in which the courts have held that a confidential relation existed as a fact, see Hutcheson v. Bibb et al., (Ala.), 38 So. 754; Irwin v. Sample (Ill.), 72 S.E. 689; Spiva et al. v. Byrd (Ala.), 90 So. 289.

The confidential relation in the above cases, it seems, may be said to have been shown to exist as a fact without reference to any of those conventional relations from which it is conclusively inferred as a matter of law. Some relations from their inherent nature are held and termed by the law as confidential or fiduciary relations. One of these relations is the relation between partners. Referring to that characteristic of the partnership, see Goldsmith v. Eichold (Ala.), 10 So. 81.

It is usually held that the mere fact that two parties are brothers is not sufficient to show prima facie a confidential relation, but see Salhinger v. Salhinger, (Wash.), 105 P. 237; 22 Am. & Eng. Ency. of Law 114; 3 Pomeroy's Eq. Juris., par. 1088.

In the present case there exists as a matter of law the element of confidence and trust. But there is much more than that because the evidence shows that there was a high confidence and trust as a fact.

Let us pause to remark here that Eugene Ham was not of the timid or bashful kind. Learning early the ways of mastery as a railroad conductor, he was of that aggressive disposition which made him a dominant figure in the politics of his new home town and became mayor of the city of Greenville for two terms, which was just a short while prior to the events herein referred to.

Dr. Smythe very positively drew the conclusion from the symptoms that "C. M. Ham's trouble in speaking was due to a lesion in the brain." It may be true, yet it is difficult to believe that a man nearly three score years of age who had been preyed upon for years by a slowly progressing, incurable malady, which in less than nine months sapped the last of life out of him, had a mind sound and of normal strength. It would seem that "if the mind did not become correspondingly weak with the body, then nature would not be in harmony with itself." Plant v. Plant, 76 Miss. 563.

We have shown as a matter of law that the partnership relation of the grantor and the grantee was in and of itself a relation of trust and confidence. We have shown as a fact that C. M. Ham had implicit trust and confidence in Engene Ham, trusted him absolutely, admired him and relied on Eugene Ham taking care of him; that C. M. Ham had virtually retired from the business even two or three years before 1921; that for four or five years his condition had been such that he was not active in the business and his brother Eugene had to take full charge.

We have shown his physical sickness and have suggested the probability of his mental weakness. These circumstances force the conclusion that the relation of the parties as contended for by us, if not necessitated by the circumstances, was the reasonable and natural relation under those circumstances.

Are we not then on safe and solid ground to assert that we have made it clear and manifest that the charge in the bill that the relation of C. M. Ham to Eugene Ham at the time of the conveyance was "one of the strictest confidence and trust" is a true charge?

If we have established that relation by the evidence and the law, what is its bearing on this case? See Hutcheson v. Bibb, 38 So. 754; 2 Pomeroy's Eq. Juris., par. 956; Spiva v. Boyd, 90 So. 290; Thomas v. Whitney, 57 N.E. 810; Henson v. Cooksey, 86 N.E. 1107; Rutherford v. Snieder, 138 N.E. 181; Shelvin v. Shelvin, 105 N.W. 260.

With particular reference to the sale by one partner of his interest in the partnership business to another, see 20 R. C. L. 879, par. 91; 22 Am. & Eng. Ency. of Law, page 115; Ehrmann v. Stitzel, 90 S.W. 278; Goldsmith v. Vrooman, 152 F. 176.

It appears that the defendant Ham makes a sorry figure when he comes to repel the presumptions against him. Under the authorities above it rested upon him "to prove satisfactorily that the transaction was just, fair and equitable in every respect." So far was he from doing anything of that sort that he absolutely shut us off from making any question about the consideration whatever.

The bill of complaint charged gross inadequacy of consideration. The answer denied the charge. The issue was sharply joined. The record shows the evidence offered by the complainants, most of it corkscrewed out of Eugene Ham himself. Some of it came from his books. That evidence shows that the pretended discovery made under oath in his answer was a sham and a swindle and that his "fair price" is a perfect illustration of gross and shocking inadequacy.

Eugene Ham actually paid about thirty-five hundred dollars in all, about four per cent of the value. If gross inadequacy of consideration is shown, and it further appears that there was a relation of confidence, the relief is certain. Let us now take up the proposition of independent advice. Thomas v. Whitney, 57 N.E. 810; Nobles v. Hutton.

The evidence of Eugene Ham is sprinkled with his statements that C. M. Ham spoke of the matter of disposing of his property in favor of Eugene and that Eugene always told him to go and talk to "his lawyer" or to "his attorney." C. M. Ham advised with no other person except Mr. H. C. Watson, the lawyer in the case.

But the evidence discloses that "his lawyer" was in Desdemona's dilemma, "I do perceive here a divided duty;" for in answer to the question, "I believe the other witness was H. C. Watson, your attorney in this matter?" Eugene said, "Yes, his attorney and mine." Eugene Ham himself paid the attorney for the service performed in preparing the document. Surely, this was no independent advice.

We earnestly contend that a lawyer with an eye single to the interest of his client alone, knowing expressly as it is said that the other party cared not how the protection was "set up" and who has determined that a lien ought to be fixed on the property for the protection of his client, would in such a case fix a lien thereon which could not be taken off without the consent of the lienholder until the debt secured by it was paid. The word fix means "to make fast, firm, immovable." Logans Port Co. v. City, 89 F. 187; Nat'l Candy Co. v. Miller, 160 F. 56.

To emphasize the importance of independent advice, it will be noted that in Spiva v. Boyd, 90 So. 289, above referred to, that the complainant's own attorney wrote the deed but it was held that under the circumstances of that particular case she did not have the benefit of his independent advice.

There is no showing in this case that C. M. Ham had the advice of any one as to the merit, fairness or business policy of this conveyance.

He who sits in the seat of judgment is bound to conclude that if the defendant was open and candid with his brother, if he was in every respect fair, just, and equitable with him, if he performed his duty "to protect and shield the weaker and to take no advantage of...

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