Hendricks v. James

• Decision Date: 03 November 1982
• Docket Number: No. 53787,53787
• Citation: 421 So.2d 1031
• Parties: Mary HENDRICKS, et al. v. Dykes L. JAMES, et al.
• Court: Mississippi Supreme Court

Page 1031

421 So.2d 1031

Mary HENDRICKS, et al. v. Dykes L. JAMES, et al.

No. 53787.

Supreme Court of Mississippi.

Nov. 3, 1982.

Rehearing Denied Dec. 1, 1982.

Richard E. Stratton, III, Brookhaven, for appellants.

Donald B. Patterson, Brookhaven, for appellees.

En Banc.

HAWKINS, Justice, for the Court:

Mary Hendricks, Stanley H. Hendricks, and Mrs. Etta McInnis Lambert, the heirs-at-law of Terry Hendricks, have appealed from a final decree of the Chancery Court of Lincoln County dismissing their bill of complaint to set aside a deed, bill of sale, and transfers made by Mr. Hendricks during his lifetime to the defendants, Dykes L. James and Glynn R. James, nephews of his pre-deceased wife. The defendants have cross-appealed the ruling of the chancellor that a fiduciary relationship existed between them and Mr. Hendricks.

The issues we address on this appeal are the sufficiency of the evidence to support the findings of the chancellor:

(1) that a fiduciary relationship existed between these parties;

(2) that Mr. Hendricks possessed sufficient mental capacity to engage in these transactions; and

(3) that the presumption of invalidity arising from the transactions by virtue of the fiduciary relationship was rebutted.

We affirm on cross-appeal. We reverse and render on direct appeal on the third issue above stated.

SUMMARY

Terry Hendricks and his wife, Maude (or Maudell) James Hendricks, married sometime in the early 1920s. No children were born to their marriage. They apparently lived their entire married lives in Lincoln County, northwest of Brookhaven. Mrs. Hendricks died intestate June 28, 1979. Mr. Hendricks died intestate July 29, 1979, at the age of 76.

On July 2, 1979, there was on deposit in the Brookhaven Bank and Trust Company a joint checking account in the names of Mr. or Mrs. Hendricks. On July 6, 1979, Mr. Hendricks had $34,993 on deposit in this account (No. 45-2173-8). He also had two certificates of deposit in the amount of $1,000 each.

The Hendricks also had a safety deposit box with this bank, which had been used over the years by Mr. Hendricks. The contents of this box are not in the record.

The Hendricks also owned four certificates of deposit in the State Bank and Trust Company of Brookhaven in the names of "Mr. or Mrs. Terry Hendricks, Either or the Survivor," all dated October 17, 1974, and in the amount of $500.00 each.

Their home was situated on approximately 123 acres of land. Apparently the deed to this realty was in the name of Mr. Hendricks. Forty acres of this land was in virgin timber.

Mr. Hendricks also owned a mineral interest in realty in the south half of the northeast quarter (S 1/2 of NE 1/4) in Section 13, Township 9 North, Range 8 East in Copiah County.

At his wife's death, Mr. Hendricks also owned personalty consisting of an old automobile, the household furniture and appliances, and personal belongings. Mr. Hendricks' sole heirs-at-law were Mary Hendricks, a sister, Stanley H. Hendricks, the son of a pre-deceased brother, and Etta McInnis Lambert, the daughter of a pre-deceased sister. Stanley lived in New Orleans; Mrs. Lambert and Miss Hendricks lived in Lee County, Mississippi.

The record does not reveal the names of all the blood relatives of Mrs. Hendricks (or her heirs-at-law had she survived her husband). She did have a half-brother, Floyd Lee Moak; a half-sister (not named in the record), who is the mother of Mrs. Jewell Dunn; and two nephews, Dykes L. James and Glynn R. James, the sons of a pre-deceased brother, J. Hugh James (the record is not clear he was a whole or half-brother). All these parties were residents of Lincoln County.

Mr. Hendricks was chronically ill, suffering from the disease Wegener's Granulomatosis and degenerative arthritis. He was hospitalized in May, 1979. He was again hospitalized from July 8 until July 20, and was re-admitted to the hospital on July 28, where he died on July 29, 1979. All these hospitalizations were in the local hospital in Brookhaven.

Mrs. Hendricks died on a Thursday, and was buried the next day. On the Monday following, July 2, Mr. Hendricks, accompanied by Dykes James, went to the Brookhaven Bank and Trust Company. At Mr. Hendricks' request, a bank employee struck the name of Mrs. Hendricks off the checking account, and changed the name to "Terry M. Hendricks or Dykes James or Glynn James." Two signature cards as to this account were signed. One was signed by Mr. Hendricks and Dykes James. The other was signed by Mr. Hendricks, Dykes James, and Glynn James. Both are dated July 2, 1979, and provide that the funds in the account shall be joint property with the right of survivorship and not as tenants in common. The card that bears Glynn James' signature was taken from the bank by Dykes for Glynn to sign.

The certificates of deposit were also changed to the names of Mr. Hendricks, Dykes James, or Glynn James. The safe deposit box card was changed by adding the names of Dykes James and Glynn James as Lessees.

Also on July 2, Mr. Hendricks and Dykes James went to the State Bank and Trust Company, and at Mr. Hendricks' request the certificates of deposit with that bank were changed to the names of "Mr. Terry Hendricks or Dykes James or Glynn James, Either or the Survivor."

On July 18, Mr. Hendricks executed a general warranty deed to all of his realty to Dykes L. James and Glynn R. James. This deed was signed in the hospital. The deed was read to him in the hospital room by the chancery clerk, who took the acknowledgment. Dykes James and his wife Helen, and Juanita James, the wife of Glynn, were also present in the room. ¹ This deed was filed for record on August 20.

On July 23, Mr. Hendricks executed a bill of sale to Dykes L. James and Glynn R. James to all of his personalty, namely: "all personal property of every kind and character and wheresoever situated, including but not limited to household furnishing and furniture." This document was executed in Dykes James' pickup truck; James brought a deputy chancery clerk out to the truck to take the acknowledgment.

On this same day, the two certificates of deposit with the Brookhaven Bank and Trust Company were also cashed and placed on deposit in the checking account.

As a result of the above transactions Mr. Hendricks left no estate.

Letters of administration were granted to Mary Hendricks by the Chancery Court of Lincoln County on August 6, 1979. On August 30, Miss Hendricks individually and as administratrix, and Stanley Hendricks and Mrs. Lambert filed a bill of complaint in the chancery court of that county against Dykes L. James and Glynn R. James to set aside the deed to them from Mr. Hendricks, as well as to return all personal property and the sum of $46,640.96 plus interest. The bill also prayed for discovery of Mr. Hendricks' assets.

The factual allegations supporting the bill charged a fiduciary relationship between Mr. Hendricks and the defendants, a weakness of body and mind, as well as mental incapacity to execute the instruments, fraud and undue influence in procuring the execution of the instruments and the monetary assets, and gross inadequacy of consideration. The defendants denied all these charges.

Following trial the chancellor found a fiduciary relation existed between Mr. Hendricks and the defendants beginning on July 2. However, as to Mr. Hendricks, the chancellor ruled that "it was his desire all along for these boys to have the property he had out there. There's been no contradiction of that." He found Mr. Hendricks to be a frugal man who was trying to attend to these matters without court expenses, and that the chancery clerk's testimony showed that when Mr. Hendricks signed the deed, Mr. Hendricks knew what he intended to do, and the same was true when the deputy clerk took the acknowledgment to the bill of sale. Finally, the chancellor found that the burden imposed upon the defendants by virtue of their confidential and fiduciary relationship had been met, and denied the relief prayed for. A decree was rendered accordingly, from which the complainants have appealed.

The assignments of error on direct appeal, as stated above, raise two issues: (a) mental capacity, and (b) sufficiency of the evidence adduced to rebut the presumption of invalidity of these transactions arising from the fiduciary relationship between the parties.

TRIAL EVIDENCE

The complainants' first witness was Mr. Emmette P. Allen, an attorney in Brookhaven. Mr. Allen had rendered legal services occasionally over the years for the James family, including Dykes. He did not recall ever doing any legal work for Mr. Hendricks.

From his recollection and the records in his office, Mr. Allen testified that on July 18, at Dykes James' request, he prepared the warranty deed and a mineral deed based on legal descriptions furnished him by Dykes James. ² On July 23, he prepared the bill of sale. Dykes James paid him by two checks: $50.00 on July 18, and $10.00 on July 23. ³ Mr. Hendricks did not accompany Dykes to Mr. Allen's office, and Mr. Allen had no contact with Mr. Hendricks relative to the preparation or execution of any of these instruments.

Mrs. Jewell Dunn, the niece of Mrs. Hendricks, recalled an instance when she visited Mr. Hendricks prior to his wife's death and during his hospitalization. He complained that the medicine being given him by the nurses was not easing his pain. Mrs. Hendricks telephoned the doctor, and then gave him some medicine from her purse.

On the Sunday afternoon following Mrs. Hendricks' death, Mrs. Dunn took her mother to Mr. Hendricks' home. He remained reclining on a cot their entire visit, and Mrs. Dunn was of the opinion he was too weak to get up.

She further testified that Mr. Hendricks told her mother, "he wanted his stuff divided equally. That he loved his nephews and nieces, and he wanted everything divided equal..." Mrs. Dunn said Mr. Hendricks made no distinction between blood or marriage nephews and...