Meginnes v. McChesney
| Decision Date | 24 November 1916 |
| Docket Number | 30725 |
| Citation | 160 N.W. 50,179 Iowa 563 |
| Parties | CORA E. MEGINNES, Appellee, v. W. J. MCCHESNEY, Administrator, et al., Appellants |
| Court | Iowa Supreme Court |
REHEARING DENIED MONDAY, MARCH 12, 1917.
Appeal from Johnson District Court.--R. P. HOWELL, Judge.
CORA E Meginnes filed a claim for amount alleged due on a note given to her by decedent shortly before his death. Trial resulted in a judgment as prayed. The executrix and the administrator with the will annexed appeal.
Reversed.
Dawley Jordan & Dawley, and Henry G. Walker, for appellants.
Dutcher & Davis and George D. Koser, for appellee.
I.
D. L. Houser died in Los Angeles, California, July 17, 1913, when nearly 74 years of age, leaving him surviving a son and two daughters. On June 24th prior to his death, he gave claimant a promissory note for $ 5,000, payable six months after date, with interest at the rate of 6 per cent per annum. Claim for the amount due thereon was filed October 1st of the same year, and trial thereof had in November, 1914. The defenses interposed were that the note was obtained by undue influence exerted by the payee, and was without consideration. Decedent ceased to do business about 1902, and his wife died in 1904. In March, 1908, while in Jacksonville, Florida, he employed claimant, who was a nurse, to care for him, as he was nearly blind, and suffering from other infirmities; and she continued as nurse, companion and secretary until his death, throughout the entire time receiving $ 50 per month and expenses, for her services. Prior to death, he became totally blind, suffered from a rupture, hemorrhoids and neuritis, and frequently lost control of his organs of excretion. He was unable to dress himself after May, 1910, and required attention day and night. That claimant proved entirely trustworthy and rendered most efficient service, this record bears indubitable evidence. Being blind, he depended on her for practically everything. She wrote letters for and read to him, accompanied him on his daily walks, and waited on him generally, as she was employed to do. All his property was at Iowa City, consisting of houses, which were rented, some bank stock, a certificate of deposit and a note. His son looked after renting the houses until the last year, and after that, this was done by a bank. His letters concerning these matters were dictated to her, and she signed his name thereto, adding "per C. E. M." His income, including a pension, was about $ 200 per month, which he obtained through the bank at Iowa City, and she cashed the drafts, received and paid from the proceeds his expenses, handing to him an amount necessary for personal items. Some of the witnesses testified that he relied entirely on her, and followed her directions implicitly. On the other hand, there was evidence tending to show that he controlled all his business affairs, and that she acted merely as his amanuensis. The record fairly raised the issue as to whether, in their relations, she exercised a dominating influence over him. The mere proof of some relationships warrants the inference that the stronger or superior party obtaining a benefit or advantage succeeded in doing so through the other's confidence, and the burden is cast on the other to establish the fairness and equity of the transaction. These are where the relations are such as that one person is put in the power of the other, and the law raises the presumption that any deal between them is through the dictation of the one in a situation to exercise dominion over the other. Illustrations thereof are: (1) Trustee and cestui que trust, dealing in reference to the trust fund; (2) attorney and client, in respect to the matter wherein the relationship exists; (3) guardian and ward, immediately after the ward arrives at age; (4) when one is the general agent of another, and has entire management, so as to be, in effect, as much his guardian as the regularly appointed guardian of an infant. The list need not be completed. Presumptions so arising are rebuttable, however. Other relationships depend on additional proof of facts and circumstances from which the existence of special confidence of one person in another is shown to be reposed to such an extent as that control by the latter is to be inferred. This may happen through relationship of blood, business, friendship or association in which the parties repose special trust and confidence in each other, and are in positions to have and exercise influence over each other. Curtis v. Armagast, 158 Iowa 507, 520, 138 N.W. 873. The rule is well stated in Cowee v. Cornell, 75 N.Y. 91, 99:
See Zimmerman v. Bitner, (Md.) 28 A. 820; Dawson v. National Life Ins. Co., 176 Iowa 362, 157 N.W. 929.
The existence of a fiduciary relation is not to be inferred from the relation of master and servant alone. Nichols v. McCarthy, 53 Conn. 299 (55 Am. R. 105, 23 A. 93). Indeed, the employee is in a position exacting obedience rather than domination. Nor will it be inferred from friendship, though that is often an important consideration, and undoubtedly furnishes a vantage ground; for one is not likely to expect a friend to deceive him into a bad bargain. As against a friend, no shield is worn nor sword drawn in defense. Friendship tends to disarm. Hypocrisy is not so common in that relation, however, as to have led the courts to declare deals between friends open to suspicion on this ground alone. Wells v. Houston, (Tex.) 69 S.W. 183; Seward v. Seward, (Kan.) 53 P. 63. The evidence was such that it was for the jury to say whether decedent was under the dominion or paramount influence of plaintiff. As persons are presumed to act on their own initiative, the burden was on defendants to prove by a preponderance of evidence that decedent was so under claimant's influence. If he was not, then the note was presumed to have been given for a valid consideration, and this must have been overcome by the defendants. In re Chismore's Estate, 175 Iowa 495, 157 N.W. 139. If he was under such dominion or influence, then the burden was on plaintiff to prove that the note was not executed in consequence of any undue influence of claimant.
As bearing thereon, all the circumstances of its execution, for what given, the nature and amount of the consideration, may be shown; and, until proven by a preponderance of the evidence to have been the voluntary act of decedent, no presumption that it was given for a valuable consideration obtains. If not his voluntary act, the promissory note was not his, and therefore this conclusion is not in conflict with Section 3060-a24, Supplement to the Code, 1913, declaring that "every negotiable instrument is deemed prima facie to have been issued for a valuable consideration, and every person whose signature appears thereon to have become a party thereto for value." This presumption is overcome by the finding that the maker was under the dominion of another, and, in ascertaining whether the note was the result of the undue influence of such other or was the voluntary act of the maker, such presumption is not to be taken into account, and the jury might well have been so advised. See In re Workman's Estate, 174 Iowa 222, 156 N.W. 438. If found to be the voluntary act of decedent, the note was thereupon presumed to have been given for a valuable consideration, and the burden was then on defendants to prove the contrary.
II. Another question involved on the trial was whether a promissory note, if executed as a gift, should be allowed by the executors. Some early decisions in New York seem so to hold. Wright v. Wright, 1 Cowen (N.Y.) 598 Coutant v. Schuyler, 1 Paige (N.Y.) 315. But these were overruled by the court of appeals in Harris v. Clark, 3 N.Y. 93, which was subsequently approved in Whitaker v. Whitaker, 52 N.Y. 368 (11 Am. R. 711). In Tate v. Hilbert, 2 Ves. Jr. 111, a desire that the law might be so construed was expressed by the Chancellor (Lord Loughborough). Seton v. Seton, 2 Brown Ch. 476, does not decide the point. In Dawson v. Kearton, 3 Smale & G. 186, decedent gave a note to one Welch for the benefit of a friend's child named Bull, and had paid interest thereon, as had the executor; and the court seems to have upheld the allowance of the claim, on the theory that the execution of the renewal note was based on a sufficient consideration, i. e., the surrender of the note renewed. The numerous English decisions deciding that the note of a donor made to the donee as a gift cannot be enforced by the latter against the estate of the former, will be found in the briefs preceding the opinion. See also Gosling v. Gosling, 3 Drew 335, and Holliday v. Atkinson, 5 B. & C. 501. Practically all the authorities construe such a note to be merely a promise to...
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