Rowe v. Freeman
| Decision Date | 10 September 1918 |
| Citation | 174 P. 727,89 Or. 428 |
| Parties | ROWE v. FREEMAN ET UX. |
| Court | Oregon Supreme Court |
In Banc.
Appeal from Circuit Court, Columbia County; James A. Eakin, Judge.
On rehearing. Former opinion (172 P. 508) adhered to.
John Manning and W. T. Slater, both of Portland (Manning, Slater & Leonard, of Portland, on the briefs), for appellant. W. A Harris, of St. Helens, and Wm. Cake, of Portland (Cake & Cake, of Portland, on the briefs), for respondents.
The plaintiff sued to set aside a deed by her mother to her brother, the defendant Daniel E. Freeman, and to have herself decreed to be the owner of an undivided third of the land included in the conveyance. Her suit was dismissed by the circuit court, and the decree was affirmed by Mr. Justice McCamant's opinion reported in 172 P. 508. An able petition for rehearing was granted, and the cause has been argued again.
The former opinion contains a sufficient statement of the facts. In the petition for rehearing the plaintiff strongly urges that our estimate of the power of attorney executed by the grantor in favor of Daniel E. Freeman was erroneous. It will be recalled that the evidence was that the mother had executed a deed to the land in pursuance of an option given to some parties to purchase the same, which conveyance was deposited in escrow with a Portland bank. After the expiration of the option she sent another son to withdraw the deed, but the bank refused to surrender it without more definite authority from the mother, on account of which she executed the power of attorney in question in favor of Daniel E. Freeman, the defendant here, after consultation with other members of her family. The only use made of the instrument was to withdraw the deed, and the defendant explains that it was placed on record because it was contemplated that he might need it to perform some acts in his mother's interest relating to roads in Columbia county, as she was at the time a resident of Portland in Multnomah county. Looking at the matter in a common sense view, under all the testimony respecting the relations of the parties, it is plain to any unprejudiced observer that the actual confidence of the mother in the son was neither increased nor diminished by the execution of this instrument. Equity looks at the substance of things, rather than at the mere writing evidencing the conventional relationship of the parties. Under these conditions, whatever importance might be attached to the power of attorney as a legal document while it was in force was obviated by its revocation, which the witnesses agree occurred immediately prior to the execution of the conveyance attacked in this suit. The technical effect of the power is overcome by the technical effect of its revocation, and it must be disregarded as a controlling factor in the contention. Its value as conclusive evidence of a fiduciary relation with all its consequences, if that term is accurately a propos, began with its execution and ended with its revocation, however much we may consider it with other circumstances disclosed by the evidence.
For all practical purposes, on the real merits of the controversy we have before us for consideration the validity of a deed from a parent to her child. It is strongly urged that the conveyance should be destroyed because the grantor did not have competent independent advice. There are many English authorities which, under the circumstances of each particular case, hold that the lack of independent advice would be a circumstance in aid of other features affecting a conveyance by one who is under the domination of another with whom the grantor sustains a confidential relation and to whom the transfer of title is made.
The leading case on that subject is Huguenin v. Baseley, 2 L. C in Eq. 1156, 14 Ves. 273. In that instance a widow, unaccustomed to business affairs, became entitled to large estates in England and Jamaica. The defendant, a clergyman in whom she had great confidence and who seems to have been her spiritual adviser, insinuated himself into her good graces, and induced her to withdraw her affair's from her solicitors and confer the sole management of her estates upon him. He used this confidence and his superior knowledge of the actual situation of her holdings to procure from her an interest in the property. Lord Chancellor Eldon commented on the fact that she did not have independent advice, and used it as an argument to the effect that she did not fully understand and comprehend the effect of her dealings with the defendant. Summing up the whole matter after a discussion of that fact in connection with others appearing in the record, he said:
"Repeating, therefore, distinctly, that this court is not to undo voluntary deeds, I represent the question thus: Whether she executed these instruments, not only voluntarily, but with that knowledge of all their effect, nature, and consequences, which the defendant Baseley and the attorney were bound by their duty to communicate to her, before she was suffered to execute them; and though, perhaps, they were not aware of the duties which this court required from them in the situation in which they stood, where the decision rests upon the ground of public utility, for the purpose of maintaining the principle, it is necessary to impute knowledge which the party may not actually have had."
The essence of the discussion of the issue in that case is but a restatement in another form of the old rule, the substance of which is that if a grantor has sufficient reason and understanding to comprehend the nature, quality, and consequences of the deed which he executes, and the act is really his own, and not virtually that of another who exercises undue influence over the grantor to that end, the deed is valid. Huguenin v. Baseley does not lay down the rule that independent advice must appear absolutely and at all events in every instance where the grantor may have special trust and confidence in the grantee, or where a fiduciary relation exists between the two.
In this country the Supreme Court of New Jersey comes nearer than any other to establishing an absolute rule that in such cases the grantor must have had independent advice. The leading case from that state is Slack v. Rees, 66 N. J. Eq. 447, 59 A. 466, 69 L. R. A. 393. There the grantor was 68 years of age, and long had suffered from locomotor ataxia, which affected both his mind and body. The deed in question was executed the day before his death. For nearly three months prior to that event he was an inmate of the home of his daughter, the grantee, and was dependent upon her for the care and service which one in his condition constantly requires. The court found that the relation of the parties had become reversed, so that she was really his guardian. On the ground that the conveyance stripped the grantor of all his property, and that he did not have independent advice respecting the execution of the instrument, the court set it aside.
Other cases from New Jersey are Haydock v. Haydock, 34 N. J. Eq. 575, 38 Am. Rep. 385, where the grantor was an old man devoid of mental capacity and clearly under the domination of his wife, without memory of what he had already done in the matter of conveyancing, and Albert v. Haeberly, 68 N. J. Eq. 664, 61 A. 380, 111 Am. St. Rep. 652, where the gift was by a girl to her stepmother, with whom she had lived since she was 2 years old, and the deed was made two months after the grantor became of age and while still a member of the grantee's family. It will be noted that this latter case is an instance of a gift from a child to one standing in loco parentis. In Coffey v. Sullivan, 63 N. J. Eq. 296, 49 A. 520, a grantor was in some degree enfeebled both mentally and physically, and had not the benefit of independent advice. The grantee endeavored to keep the grantor away from others of the family, and did many things to conceal the conveyance, and there were other elements of suspicion surrounding the transaction. In that case the court stated the rule in this more modified form:
"The burden of proof was cast upon the donee to establish that the donor fully appreciated what he was doing, or, at all events, in the doing had the benefit of disinterested and competent advice."
New Jersey stands practically alone in this country in its treatment of the doctrine of independent advice. Woodbury v. Woodbury, 141 Mass. 329, 5 N.E. 275, 55 Am. Rep. 479, is an authority for submitting the lack of advice as a circumstance to be considered by the jury. The rule is thus stated in the alternative in Hensan v. Cooksey, 237 Ill. 620, 626, 86 N.E. 1107, 1109 (127 Am. St. Rep. 345) cited by the plaintiff:
"The existence of the confidential relation creates a presumption of influence, which imposes upon the one receiving the benefit the burden of proving an absence of undue influence by showing that the other party acted upon the competent and independent advice of another, or such facts as will satisfy the court that the dealing was at arm's length, or that the transaction was had in the most perfect good faith on his part, and was equitable and just between the parties or, as some of the authorities say, that it was beneficial to the other party."
In Gibson v. Hammang, 63 Neb. 349, 88 N.W. 500, noted in plaintiff's brief, the grantor was 78 years old, and much enfeebled by illness. The grantee, a daughter, was very importunate, made railing accusations against her brothers and sisters, represented that they were about to have a guardian appointed for the grantor, her mother, concealed the project from a brother living in the same house and from others of the family, especially a sister living near. In Disch v. Timm, 101 Wis. 179, 77 N.W. 196, a husband...
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