Kar v. Hogan

• Decision Date: 31 December 1976
• Docket Number: No. 5,5
• Citation: 251 N.W.2d 77,399 Mich. 529
• Parties: Edward W. KAR and Irene Altshuler, Plaintiffs-Appellants, v. Fred H. HOGAN, Executor of the Estate of Edward Merkiel, Deceased, Defendant-Appellee. 399 Mich. 529, 251 N.W.2d 77
• Court: Michigan Supreme Court

Page 77

251 N.W.2d 77

Edward W. KAR and Irene Altshuler, Plaintiffs-Appellants, v. Fred H. HOGAN, Executor of the Estate of Edward Merkiel Deceased, Defendant-Appellee.

No. 5.

399 Mich. 529, 251 N.W.2d 77

Supreme Court of Michigan.

Dec. 31, 1976.

Komjathy & Komjathy, Louis A. Komjathy, Louis A. Komjathy, II, Detroit, for plaintiffs-appellants.

Alton P. Shirley, Belleville, for defendant-appellee; George Stone, Detroit, of counsel.

LINDEMER, Justice.

This case involves an attempt to upset a deed between a woman and her husband on the ground that it was procured through undue influence.

Plaintiffs are the stepchildren of Julia Merkiel. Their natural mother, Helen Kar, died in 1914. In that same year Julia married John Kar, plaintiffs' father. She cared for his children as if they were her own. The property involved in this lawsuit, a farm near Belleville, Michigan, was purchased by John and Julia in 1917. John died in 1951, leaving Julia as the sole owner of the property. In 1953, Julia married Edward Merkiel. In 1969, by use of a "strawman", the property was deeded to Julia and Edward as tenants by the entireties. When Julia died in 1970, Edward became the sole owner of the property. On March 25, 1970, plaintiffs filed this lawsuit against Edward hoping to have the 1969 deed invalidated. If the deed were to be voided, the property in dispute would pass by the terms of Julia's will. Under her will, plaintiffs would receive approximately two-thirds of the land while the remainder of the property would go to Edward. Edward died on September 18, 1971, and Fred Hogan, executor of his estate, was substituted as defendant.

Trial commenced on July 6, 1972, before Wayne Circuit Court Judge George E. Bowles. Apparently there was a dispute over whether or not the parties were entitled to have a jury trial. The judge postponed decision of this question until after trial. A jury was selected and the trial proceeded as a regular jury trial. At the conclusion of the trial, the judge requested briefs from both parties on this issue. In his written opinion Judge Bowles concluded that there was no right to a jury trial of this case and therefore " * * * the verdict of the advisory jury is mere surplusage without legal effect".

In spite of a jury verdict in favor of plaintiffs, the trial judge decided the case for defendant. The Court of Appeals affirmed. Kar v. Hogan, 54 Mich.App. 664, 221 N.W.2d 417 (1974). This Court granted plaintiffs' application for leave to appeal on December 5, 1974. 393 Mich. 766. We affirm.

Plaintiffs raise three issues for review. Their first argument is that on the basis of the evidence presented, the trial judge should have found the deed to be the product of undue influence. To establish undue influence it must be shown that the grantor was subjected to threats, misrepresentation, undue flattery, fraud, or physical or moral coercion sufficient to overpower volition, destroy free agency and impel the grantor to act against his inclination and free will. Motive, opportunity, or even ability to control, in the absence of affirmative evidence that it was exercised, are not sufficient. Nelson v. Wiggins, 172 Mich. 191, 137 N.W. 623 (1912). However, in some transactions the law presumes undue influence. The presumption of undue influence is brought to life upon the introduction of evidence which would establish (1) the existence of a confidential or fiduciary relationship between the grantor and a fiduciary, (2) the fiduciary or an interest which he represents benefits from a transaction, and (3) the fiduciary had an opportunity to influence the grantor's decision in that transaction.

The trial judge found all the necessary elements and applied the presumption to the case. It is the application of the presumption and its effect upon the "burden of proof" over which the parties are split. Plaintiffs argue that, once established, the presumption shifts the burden of proof to the defendant to show an absence of undue influence.

The seeds of this argument were sown by Justice Souris in his landmark opinion of In re Wood Estate, 374 Mich. 278, 132 N.W.2d 35, 5 A.L.R.3d 1 (1965). Several law review comments concerning Wood have aided this theory to sprout roots. Callahan, Succession and Trusts, 17 Wayne L.Rev. 665, 671 (1971); Recent Decisions, 40 Notre Dame Lawyer 676, 677 (1965). Recently, the Court of Appeals has been nurturing this theory towards full bloom. Totorean v. Samuels, 52 Mich.App. 14, 21, 216 N.W.2d 429, 433 (1974); First National Bank & Trust Co. of Marquette v. Albert, 66 Mich.App. 252, 238 N.W.2d 827 (1975). In Totorean, the Court of Appeals said:

"We read Wood as standing for the proposition that a rebuttable presumption shifts the burden of proof. In dicta the Wood Court said:

" 'Finally, in every case in which evidence has been offered to rebut presumed fact C, the jury should be instructed that in the event it cannot decide upon which side the evidence preponderates, then as a matter of law fact C must be presumed.' In re Wood, supra, 295, 132 N.W.2d 46.

"Therefore, in those cases where (1) plaintiff has the benefit of a presumption which has been rebutted and, thus, reduced to a permissible inference; and (2) the trier of fact determines the evidence of plaintiff and defendant to be equal, the trier of fact should return a verdict for the plaintiff. This can only mean the ultimate burden of proof is on defendant not plaintiff." (Footnote deleted).

We disagree. The ultimate burden of proof in undue influence cases does not shift; it remains with the plaintiff throughout trial. We readily concede that prior cases may have unnecessarily confused the issue. In the case of In re Bailey's Estate, 186 Mich. 677, 692, 153 N.W. 39, 44 (1915), this Court held:

"It is true that a presumption is raised that calls for an explanation, but the burden of proof to show undue influence is not thereby shifted."

But only two years later in Williams v. Williams, 198 Mich. 1, 4-5, 164 N.W. 374, 375 (1917), the Court said:

"That the presumptions are against transactions of this nature and they are critically scrutinized by the courts, putting the burden of proof upon those seeking to sustain them, requires no citation of authority."

The essence of the problem is the definition of "burden of proof". There are two separate meanings. 9 Wigmore, Evidence (3d ed.) § 2483 et seq., p. 266 et seq.; McCormick, Evidence (2d ed.) § 336, p. 783; James, Burdens of Proof, 47 Va.L.Rev. 51 (1961). One of these meanings is the burden of persuasion or the risk of nonpersuasion. The other is the burden of going forward or the risk of nonproduction.

Generally the burden of persuasion is allocated between the parties on the basis of the pleadings. The party alleging a fact to be true should suffer the consequences of a failure to prove the truth of that allegation. A plaintiff has the burden of proof (risk of nonpersuasion) for all elements necessary to establish the case. This burden never shifts during trial. Therefor plaintiffs, who alleged the existence of undue influence, bore the ultimate burden of persuading the trier of fact that undue influence was used to procure the deed.

Initially, the burden of going forward with evidence (the risk of nonproduction) is upon the party charged with the burden of persuasion. However, the burden of going forward may be shifted to the opposing party.

"We have seen something of the mechanics of the process of 'proceeding' or 'going forward' with evidence, viewed from the point of view of the first party who is stimulated to produce proof under threat of a ruling foreclosing a finding in his favor. He may in respect to a particular issue pass through three states of judicial hospitality; (a) where if he stops he will be thrown out of court; (b) where if he stops and his adversary does nothing, his reception will be left to the jury; and (c) where if he stops and his adversary does nothing, his victory (so far as it depends on having the inference he desires drawn) is at once proclaimed. Whenever the first producer has presented evidence sufficient to get him to the third stage and the burden of producing evidence can truly be said to have shifted, his adversary may in turn pass through the same three stages. His evidence again may be (a) insufficient to warrant a finding in his favor, (b) sufficient to warrant a finding, or (c) irresistible, if unrebutted." McCormick, supra, p. 793.

A discussion of presumptions and their effect upon the burden of producing evidence appears in Wood.

"Presumptions in the law are almost invariably crystallized inferences of fact. Experience has taught that if certain evidentiary facts be established, there is such a strong practical likelihood that another stated fact will be true that that fact may be presumed. The law's special recognition of this lesson of experience is expressed by its rulings that if a litigant proves evidentiary facts A and B, then fact C's existence will be presumed.

"The immediate legal effect of a presumption is procedural it shifts the burden of going forward with the evidence relating to the presumed fact. 5 Once there is a presumption that fact C is true, the opposing party must produce evidence tending to disprove either facts A and B or presumed fact C; if he fails to do so, he risks jury instruction that they must presume fact C to have been established."

The thrust of the Wood case was to change the law in this state concerning the effect that a presumption has after rebuttal evidence has been introduced. Prior to Wood, Michigan held to the "Thayer" or "bubble bursting" approach; that is, the presumption governed only the burden of going forward with evidence and the presumption was totally dissipated if rebuttal evidence was offered. See In re Haskell's Estate, 283 Mich. 513, 278 N.W. 668 (1938). Wood rejected the "Thayer" approach and adopted the view that once rebuttal evidence was...