Stephens County Museum, Inc. v. Swenson

• Citation: 517 S.W.2d 257
• Decision Date: 04 December 1974
• Docket Number: No. B--4305,B--4305
• Parties: STEPHENS COUNTY MUSEUM, INC., et al., Petitioners, v. Clara J. SWENSON et al., Respondents.
• Court: Supreme Court of Texas

Page 257

517 S.W.2d 257

STEPHENS COUNTY MUSEUM, INC., et al., Petitioners, v. Clara J. SWENSON et al., Respondents.

No. B--4305.

Supreme Court of Texas.

Dec. 4, 1974.

Rehearing Denied Jan. 29, 1975.

McMahon, Smart, Wilson, Camp, Lee & Surovik, Stanley P. Wilson, Abilene, C. J. Eden, Breckenridge, John L. Hill, Atty. Gen., Martha E. Smiley, Asst. Atty. Gen., Austin, Patrick W. Thompson, Breckenridge, Johnson, Slagle & Bell, William W. Bell and J. Edward Johnson, Brownwood, for petitioners.

C. J. O'Connor, Harrell, Thompson & Cook, W. G. Thompson, Breckenridge, Jennings, Montgomery & Dies, Frank L. Jennings, Graham, for respondents.

DENTON, Justice.

This is a suit to set aside a series of contributions by Clara J. Swenson and Alma B. Swenson, two sisters, to Stephens County Museum, a non-profit organization. The trial court, upon a jury verdict, entered judgment denying recovery of the initial cash contribution of the sisters, but set aside a second cash contribution and the conveyance of two tracts of land, as well as a trust set up for the benefit of the non-profit organization in conjunction with the second conveyance. The court of civil appeals, by a majority opinion, affirmed. 499 S.W.2d 676.

The court held that the initial deed conveying a trust of land to the Stephens County Museum was not delivered with the intention that it should become operative; that the transactions were presumptively unfair and invalid; and that there was evidence of undue influence. The court further found that the jury misconduct accompanying the special issues on undue influence was harmless. We affirm that part of the judgments below which upheld the first cash contribution, and that part of the judgments which set aside the conveyance of the 1761 acre tract. We reverse that part of the judgments below which set aside the second cash contribution and the conveyance of the 5777 acre tract and the Declaration of Trust.

Clara J. Swenson, 92 years old, and Alma B. Swenson, 84 years old, are the surviving members of the Swenson family that has resided in Stephens County for almost a century. Their older brother, S. T. Swenson, 95 at the time of trial, who has since passed away following the trial of this case, had handled the business affairs of his two sisters for over 40 years, receiving a monthly salary for his services. Although he held a power of attorney, the sisters nevertheless exercised the custom and habit of signing and approving documents and transactions presented to them by their brother.

In 1967, S. T. Swenson, with the acquiescence of this sisters, employed an attorney to prepare wills for both sisters. These wills, approved and executed by Clara and Alma, provided for testamentary trusts to care for themselves and for S. T. and his wife and, that following their deaths, the trust would be dedicated to charitable purposes in Stephens County. The Stephens County Museum, a non-profit corporation, was organized in December of 1969 with S. T. Swenson serving as one of the incorporators as well as a vice-president and director of the museum. During the ensuing months Clara and Alma, upon S. T.'s advice and approval, made several substantial gifts including the following: cash contributions totaling approximately $100,000, the conveyance of a 1761 acre tract subject to a life-time, $1.00 per year leaseback agreement and the creation of an intervivos trust involving the 5777 acre Swenson Ranch for the maintenance of the surviving Swenson's with the remainder of the net income being used for the creation and upkeep of the museum facility.

When S. T. Swenson's health began to fail, Clara and Alma contacted C. J. O'Connor, an old family attorney, concerning the execution of the trust agreement. He informed them that they had given away their entire estate and were without the means to take care of themselves. Ther sisters thereupon filed this suit to set aside all the contributions, asserting that they did not understand the nature and the subject matter of the transactions described above at the time they were entered into, and that the facts and circumstances of these transactions give rise to a strong presumption that they resulted from fraud and undue influence.

In answer to special issues submitted, the jury found that the Swenson sisters were acting under undue influence when they entered into the various transactions here; and that they did not understand the nature and subject matter of the transactions except for the first cash contribution. The petitioners filed a motion for a new trial in which they complained of jury misconduct. At the hearing of the alleged jury misconduct the foreman of the jury testified, that once the jury answered that the sisters did understand the transaction concerning the first cash transaction, they found that they were not unduly influenced. He testified that the jury reasoned that if the sisters understood the nature and the subject matter of each transaction inquired about, it could not be said that they had been unduly influenced. The majority and concurring opinions of the court of civil appeals both concluded that this amounted to jury misconduct, however, both considered the error harmless. We think it is apparent that the conduct of the jury in this case was an effort on its part to follow its own reasoning, rather than properly applying the court's charge. It is not misconduct to misinterpret or misunderstand the court's charge. Adams v. Houston Lighting & Power Co., 158 Tex. 551, 314 S.W.2d 826 (1958); Whited v. Powell, 155 Tex. 210, 285 S.W.2d 364 (1956). Nor is it misconduct to misunderstand the effect of answers to special issues. Burchfield v. Tanner, 142 Tex. 404, 178 S.W.2d 681 (1944). We conclude that the conduct of the jury complained of here does not constitute misconduct.

Having concluded that the judgment of the trial court should not be reversed upon the ground of jury misconduct, we must review the evidence concerning the issues of undue influence, delivery of the deeds, and determine the extent of the evidence offered relating to the voluntary nature and fairness of the transactions.

The court of civil appeals correctly applied the proper definition of undue influence as enunciated in Long v. Long, 133 Tex. 96, 125 S.W.2d 1034 (1939) and went on to set out evidence supporting the fact that S. T. Swenson had the opportunity to exert undue influence upon his sisters due to his management of their business affairs and their reliance upon his judgment. We find, however, no evidence that S. T. Swenson did in fact exert undue influence upon Clara and Alma in the course of the transactions in question here. Dulak v. Dulak, 513 S.W.2d 205 (Tex.1974); Rothermel v. Duncan, 369 S.W.2d 917 (Tex.1963).

The Swenson sisters also assert, and the petitioners do not contest, that a fiduciary relationship existed between them and their brother because he was operating under a power of attorney which gave him broad powers in the management of their property and his functioning as a trusted business advisor. It is to be further noted S. T. Swenson was director and...