Hodes v. Hodes

• Decision Date: 25 January 1944
• Citation: 173 Or. 267,145 P.2d 299
• Parties: HODES <I>v.</I> HODES ET AL.
• Court: Oregon Supreme Court

173 Or. 267

145 P.2d 299

HODES

v. HODES ET AL.

Supreme Court of Oregon.

Argued January 5, 1944.

Affirmed January 25, 1944.

Husband and wife

1. Evidence established that general power of attorney, which was executed by a woman inexperienced in legal affairs and authorized husband to convey any realty in which she had an interest, was procured through fraud and abuse of fiduciary relation between husband and wife and used to circumvent separate maintenance decree requiring monthly payments to wife and to defraud wife of interest in property acquired through combined efforts of husband and wife so as to authorize cancellation of power of attorney and conveyances of land thereunder to corporations organized and owned by husband.

Witnesses

2. A witness willfully false in one part of his testimony is to be distrusted in others.

Husband and wife

3. A fiduciary relationship of high degree exists between husband and wife, and business transactions between them are carefully scrutinized to prevent wife from being overreached.

Husband and wife

4. In view of fiduciary relationship existing between them, husband must deal with wife in the utmost fairness and good faith.

Husband and wife

5. Husband, when acting as agent or attorney in fact for wife, must exercise authority conferred upon him for their mutual benefit and not for his own advantage.

Husband and wife

6. If power of attorney authorizing husband to convey any realty in which wife had an interest was executed to enable husband to procure funds to finance trip of wife and daughter, authority thus conferred upon husband terminated when purpose of agency had been accomplished, and conveyances of land thereafter made to corporations organized and owned by husband were subject to cancellation by wife.

                  Scope of power of attorney to convey, note, 73 A.L.R. 884
                See, also, 2 Am. Jur. 113
                  30 C.J., Husband and Wife, § 248
                

Before BAILEY, Chief Justice, and BELT, ROSSMAN, KELLY and HAY, Associate Justices.

Appeal from Circuit Court, Multnomah County.

ROBERT TUCKER, Judge.

Suit by Sarah Hodes against David Hodes and others to cancel a power of attorney and certain conveyances made thereunder. From a decree in favor of plaintiff, defendants appeal.

AFFIRMED.

Leland F. Hess, of Portland, for appellants.

Barnett H. Goldstein, of Portland, for respondent.

BELT, J.

This is a suit to cancel and set aside a power of attorney and certain conveyances made thereunder, for the reasons: (1) That the power of attorney was procured by fraudulent representations made by the defendant David Hodes to his wife, the plaintiff herein; (2) that the conveyances were not made for the mutual benefit of the plaintiff and her husband, but were for the sole benefit of the latter; (3) that it was mutually understood and agreed between plaintiff and her husband that the power of attorney had terminated prior to the time of the execution of the conveyances in question. From a decree in favor of the plaintiff, defendants appeal.

Plaintiff and the defendant, David Hodes, who are of Jewish extraction, were born in Russia. Sarah came to this country — the land of hope and opportunity — when she was a small girl only fourteen years of age. When David came he was about ten years old. Sarah spoke only Yiddish but soon after landing in New York City attended night school for a few weeks and acquired a limited knowledge of English. The Ghetto — where the lessons of life are learned in the hard way — was her home. After working in a tailor shop for a period of ten years, Sarah came to Portland, Oregon, where, in 1913, she married David Hodes. David, at that time, was a junk peddler in destitute circumstances. Sarah and David, however, were extremely frugal and industrious and soon began to accumulate property. David was not content to be a junk peddler very long. He engaged in the auto wrecking business and then sold tractors and other industrial equipment. He did everything to make money. That his efforts were not in vain is indicated by his financial statement to Dun & Bradstreet on May 10, 1940, showing a net worth of $65,000. The title to the real property in question was all in the name of the husband, with the exception of the home property (Lot 12, Block 2, in Laurelhurst, in the city of Portland) which was held by David and his wife as an estate by the entirety.

As a result of their marriage, five children were born, all of whom have now attained majority and, with the exception of one, have been educated in various colleges and universities in this country.

On February 13, 1939, the plaintiff executed a general power of attorney purporting to authorize her husband to "sell and convey, exchange or dispose, mortgage or hypothecate" any real property in which she had an interest. We think the evidence fairly discloses that, at such time, plaintiff had only slight knowledge of legal documents or instruments, and would not have been able to appreciate the significance and meaning of the terms used in the power of attorney had she been able to read the same. On the other hand, David Hodes was a shrewd, experienced business man. David, in describing how his wife happened to confer this authority upon him, thus testified:

"A. Mrs. Hodes wanted money; she wanted to go East. Just why I don't know. She woke up one day and she says she wants to go east right now fast. I had no money, I had nothing, and I had to suffer to get money. So after conversing this thing with her I told her that she should give me a power of attorney to deal with these properties and I would give her the necessary funds to go East, finance the trip, which I did. She rendered me these copies, gave them to me for that purpose, for that reason, because I wouldn't furnish the money, I wouldn't go out and borrow it for her — I had to borrow the money — unless I got something for it, and that is what I got."

It is clear from the evidence that plaintiff believed the power of attorney was executed for the purpose, as represented by her husband, of enabling him to sell a part of the 337-acre tract of land in Skamania county, Washington, but sh...