Leuba v. Bailey

• Decision Date: 27 December 1957
• Docket Number: Nos. 37069,37187,s. 37069
• Citation: 88 N.W.2d 73,251 Minn. 193
• Court: Minnesota Supreme Court
• Parties: Beulah B. LEUBA et al., Respondents, v. Leone BAILEY and Samuel A. Warren, Appellants, Carl G. Christensen et al., Defendants. Beulah B. LEUBA et al., Respondents, v. Leone BAILEY and Samuel A. Warren, Appellants.

Page 73

88 N.W.2d 73

251 Minn. 193

Beulah B. LEUBA et al., Respondents, v. Leone BAILEY and Samuel A. Warren, Appellants, Carl G. Christensen et al., Defendants.

Beulah B. LEUBA et al., Respondents, v. Leone BAILEY and Samuel A. Warren, Appellants.

Nos. 37069, 37187.

Supreme Court of Minnesota.

Dec. 27, 1957.

Rehearing Denied Feb. 21, 1958.

Syllabus by the Court

1. Courts do not undertake to define undue influence by fixed principles for the reason that such a definition might furnish a guide to evasion of the consequences of the exercise of improper influence.

2. The fact of undue influence may, and in many cases can only, be established by circumstantial evidence. While the evidence of undue influence must go beyond suspicion and conjecture and show not only that the influence was in fact exerted but that it dominated and controlled the donor's own free will, it may nevertheless be established by evidence of the circumstances surrounding the making of the gift, and even though such circumstances, standing alone, might not constitute undue influence, they may when considered together in connection with the whole evidence support the verdict of the jury as to undue influence.

3. The existence of undue influence is a question of fact, and the supreme court will not set aside the findings of the trial court as to undue influence unless they are manifestly and palpably contrary to the evidence as a whole, and this holds true even though an appellate court might have determined otherwise if it had heard the case de novo.

4. The test of undue influence is not its effect upon a person of average intelligence and strength of character, but its effect upon the person in question, taking into consideration his age, intelligence, health, and strength of character.

5. Where, under circumstances showing that attorney acquired mortgage from the donee of real estate acquired by gift from the donor, which mortgage was executed the day following the death of the donor and which mortgage could only have value in the event of the validity of the gift to the donee, the trial court did not abuse its discretion in sustaining objection to testimony of proposed evidence of the attorney with reference to the circumstances under which the transfer was made from the donor to the donee since under M.S.A. § 595.04 the attorney was disqualified as a person interested in the outcome of the action.

6. Motions for a new trial should be granted cautiously and sparingly and only in the furtherance of substantial justice. Where proposed newly discovered evidence was cumulative in nature, the court did not abuse its discretion in denying motion for new trial.

Clifford F. Hansen and Samuel A. Warren, Minneapolis, Harry H. Peterson, Arthur T. Nelson, Minneapolis, of counsel, for appellants.

Robb, Robb & Van Eps, Minneapolis, for respondents.

MURPHY, Justice.

This is an appeal by defendants from a judgment of the District Court of Hennepin County. The case involves the issue of whether undue influence was exercised by the defendants on one Dr. William W. Shenk in connection with the execution of joint tenancy deeds to certain property in Minneapolis. Also involved is an appeal from orders of the court appointing a receiver for the purpose of managing and collecting rentals on the property during the pendency of the action. Both appeals are disposed of by this decision.

The plaintiff, Beulah B. Leuba, is the surviving daughter of Dr. William W. Shenk who died in Minneapolis, Minnesota, on May 2, 1955. The defendant Leone Bailey was the companion and housekeeper of Dr. Shenk for many years prior to his death. The defendant Samuel A. Warren performed legal services in connection with the transfer of certain real estate from Dr. Shenk individually to Leone Bailey and Dr. Shenk as joint tenants. The defendant Warren's interest grows out of a claim for legal services and certain advances made by him in connection with the transaction.

Mrs. Leuba instituted this action to cancel the deeds on the ground that they were procured by undue influence on the part of Miss Bailey. It appears from the record that the plaintiff's father was for many years a minister of the Gospel. He married Charlotte Marie Brooks of Byfield, Massachusetts, during the early period of his life when he was active as an evangelist. Two children were born of this marriage, Beulah, the plaintiff, and a son, David, both of whom survive. Sometime after his marriage Dr. Shenk left the evangelistic field and accepted the pastorate of a church in Tacoma, Washington, where he served for serveral years. In 1907 or 1908, the record is not clear as to the exact date, Dr. Shenk decided to leave his calling as a clergyman and to engage in mining ventures in Europe. He took his family from Tacoma to Byfield, Massachusetts, and left them with his wife's people while he went to Europe. After about six months in Europe, he returned to this country to pursue mining ventures here. His family did not see him from 1908 to 1916, during which interval he gave them little financial assistance. During this period Mrs. Shenk depended upon the aid of her relatives and friends and the sale of what little property she had to provide for herself and children.

It appears that Dr. Shenk returned to Massachusetts in 1916 intending to take over his family responsibilities, but certain circumstances, including his financial situation, prevented him from taking his family with him, when he returned west. The record is not clear as to Dr. Shenk's exact activities between 1916 and 1936, but it appears that at sometime in this interval, approximately 1918, he came to Minnesota to accept the pastorate of a Methodist Church at Deer River. He held various pastorates in Minnesota thereafter, the last being the Grace Methodist Church of Minneapolis which he finally gave up so that he could engage in osteopathic or chiropractic work. He was unable to qualify as an osteopath or chiropractic practitioner, but by 1936 he established himself as a naturopath, a profession which, it appears from the record, combined chiropractic and mental science ideas in the treatment of patients. It seems he enjoyed a modest success in this profession and purchased the property in which he carried on his practice at 3561 Minnehaha Avenue. He converted the second floor of the house on that property into two apartments which he rented out, and used the downstairs for his office and living quarters. While carrying on his practice as a naturopath he continued to send money to his family more frequently than he had in the past and in more substantial amounts. During all of this time he had kept up correspondence with members of his family, from which it appeared that he had every intention of being reunited with them when his financial circumstances would permit.

Leone Bailey came to live with Dr. Shenk in October 1936. Miss Bailey had no formal education beyond the eighth grade. Her mother, who was a talented musician, had taught music to Leone, and, prior to the time she came to live with Dr. Shenk, she engaged in the work of giving music lessons and had spent much of her time in taking care of her ailing parents. Her mother died in 1935 and her father died a year later. Her father was a friend and patient of Dr. Shenk. It was agreed between them that when Mr. Bailey died his daughter would work for Dr. Shenk. This arrangement was carried out. At the time Leone went to live with Dr. Shenk she was 36 years of age. She testified that Dr. Shenk had agreed to pay her $125 per month but that during the 19 years she spent with him she never received pay for the work she performed. She testified that she never had any money to spend for herself; that she received only her board and room and clothing which he purchased for her. She acted as a receptionist in his office and assisted in treating patients. She was his companion as well and accompanied him on social visits. They did their shopping together and took vacations together. In 1938, 1940, and 1941, Dr. Shenk paid Miss Bailey's expenses in the Minneapolis Business College to enable her to learn secretarial work. He believed that eventually some of his mining investments would pay off and in that event he would need a well-trained secretary.

After leaving Massachusetts in 1916, Dr. Shenk did not again see any of his family until 1948 when his daughter Beulah visited him in Minneapolis. During the entire interval of Dr. Shenk's separation from his family he wrote frequent and regular letters expressing love and affection for his family, always in endearing terms. These letters continued until the time of Dr. Shenk's death. During his absence from the family he often sent money and gifts. During his more prosperous years he aided his children in getting an education and later paid the college expenses of two of his son David's children. He also helped Beulah purchase a car. He continued, however, to invest money in mining and in other speculative ventures. It was his expectation that these investments would one day make it possible for him to be reunited with his family.

After Beulah's visit in 1948, Shenk did not again see his family until 1951 when he was about 82 years of age. In July 1951, he became ill with asthma and was confined at the Swedish Hospital in Minneapolis. He expressed the feeling that a change of climate would help him and on his return from the hospital Miss Bailey arranged for him to go to Utah to visit with Dr. Farr where he could recuperate from his illness. Miss Bailey had met Dr. Farr, a former missionary for the Mormon Church, in Minneapolis, and had become a convert to his faith. Miss Bailey made all the arrangements for the trip to Farr's home and bought a plane ticket to Salt Lake City where Dr. Shenk was met by Dr. Farr. Dr. Shenk stayed at the Farr home for approximately seven days after which arrangements were made for Dr. Shenk to go by plane...