Title: Loucks v. McCormick

State: kansas

Issuer: Kansas Supreme Court

Document:

198 Kan. 351 (1967)
424 P.2d 555
RHODA D. LOUCKS, Appellant,
v.
ETHEL K. McCORMICK, and P.S. McCORMICK, Appellees.
No. 44,646

Supreme Court of Kansas.
Opinion filed March 4, 1967.
Dale E. Saffels, of Garden City, argued the cause, and A.M. Fleming, Lloyd H. Haag and Clifford R. Hope, Jr., all of Garden City, were with him on the briefs for the appellant.
Logan N. Green, of Garden City, argued the cause, and Ray H. Calihan, Ray H. Calihan, Jr. and Daniel J. High, all of Garden City, were with him on the briefs for the appellees.
The opinion of the court was delivered by
HATCHER, C.:
This was an action to cancel a quitclaim deed alleged to have been obtained by fraud.
The facts leading up to the execution of the deed are not in dispute. *352 Although P.S. McCormick, the divorced husband of Ethel, is named as defendant, he did not participate in the transaction in controversy or the trial of the case, therefore we will refer to Ethel K. McCormick as the defendant and appellee. In 1938 Charles A. Loucks employed the defendant, Ethel K. McCormick, in his abstract business at Lakin, Kansas. The next year a partnership was formed to operate the abstract business and an insurance agency was also included. Charles A. Loucks owned a one-half interest in the partnership and Ethel K. McCormick and P.S. McCormick, her husband, each owned a one-fourth interest. The business was carried on by the McCormicks, Mr. Loucks acting only in an advisory capacity.
The partnership arrangement continued until Mr. Loucks' death December 28, 1960. He died testate naming his wife, Rhoda D. Loucks, as executrix. The will devised the property where the partnership office was located to the defendant and provided for division of the remaining partnership real estate as follows:
Letters testamentary were issued to plaintiff on January 19, 1961, and on the same day the plaintiff gave the defendant a power of attorney. Under the power the defendant managed the business affairs of the estate which was of the approximate value of $1,000,000. She collected monies, paid bills, both business and personal, and took care of the plaintiff's business affairs generally. The power of attorney did not extend to the sale and transfer of property. The plaintiff gave the power of attorney to the defendant because her husband, Charles A. Loucks, had said she was capable and because the defendant had transacted Mr. Loucks' business for many years. Neither the plaintiff nor her husband, Charles A. Loucks, had any known relatives.
On November 16, 1961, the plaintiff executed two deeds to the defendant, one covering the business building which was devised to defendant by the will, and one covering a small parcel of land immediately west of the business property which defendant purchased from the estate. The plaintiff read the deeds conveying the *353 above mentioned property, signed them and acknowledged them before a notary public. These conveyances are not in dispute.
On December 1, 1961, the plaintiff executed a quitclaim deed conveying to the defendant and her ex-husband, P.S. McCormick  the parties having been divorced  plaintiff's one-half interest in the partnership property. The record does not disclose the value of the one-half interest but plaintiff alleged it to be in excess of $75,000. At the time the quitclaim deed was executed the plaintiff's eyesight was impaired and she was in the habit of signing instruments brought to her by the defendant without reading them. She could, however, ascertain the general tenor and import of a document if she made an effort to do so. The plaintiff was 88 years of age but of sound mind.
Although the quitclaim deed showed an acknowledgment and was duly recorded, the plaintiff did not appear before the notary acknowledging the instrument or have contact with the notary in any way.
The friendly relationship between the plaintiff and defendant continued until the latter part of the year 1964, when an old friend of the Loucks family began to cast aspersions on defendant's financial integrity. In the early part of 1965 the power of attorney given defendant was cancelled and a similar one given to the family friend. The petition was filed to cancel the quitclaim deed March 17, 1965.
The petition, after setting forth the formal allegations, stated the quitclaim deed was obtained from the plaintiff by fraud while the defendant was in a confidential relationship. The plaintiff had no knowledge of the execution of the deed until February 8, 1965. It was the habit of plaintiff to sign such instruments as defendant brought to her without question because of her trust and confidence. The petition concluded:
*354 The prayer was for cancellation of the instrument.
It will be noted that at no place in the petition is there a suggestion of undue influence or persuasion.
The answer denied that the deed was signed by plaintiff without her knowledge and consent and stated:
In addition to the undisputed facts heretofore stated the plaintiff testified:
"A. No, indeed.
"A. If I signed that, it wasn't to my knowledge.
"Q. You did not intend to convey this?
"A. I did not."
The trial court saw fit to believe the defendant, who testified:
"A. Yes, sir.
"Q. Was anyone there beside you and Mrs. Loucks?
"A. Yes, sir.
"Q. Did you have any other papers with you?
"A. No, sir.
"Q. When she got through reading it she signed it?
"A. Yes, sir.
"Q. What happened then; where did you go?
"A. Yes, sir.
"Q. Did Mrs. Warthen acknowledge it?
"A. Yes, sir."
Mrs. Warthen testified that the plaintiff did not call her about the acknowledgment.
The trial judge made findings in harmony with the facts summarized herein and in addition found that:
The trial judge concluded that a confidential relationship existed between the plaintiff and the defendant, the burden of proof was upon the defendants to prove that the deed was knowingly executed with the intention of making a gift, and that 
Other conclusions of the trial court will be considered as we review the contentions of plaintiff raised in her appeal.
We must proceed to unravel appellant's legal contentions with *356 some caution or we will become ensnared in a web of inappropriate legal theories not applicable to the issues as framed in the case. We will first consider appellant's contention that the trial court erred in concluding that her claim was based upon actual rather than constructive fraud. On this point the trial court concluded:
We are inclined to agree with the trial court that appellant's petition alleged actual fraud and her testimony, if believed, would have established only actual fraud. Appellant's entire case is based upon the theory that appellee intentionally tricked her into signing an instrument which she did not intend to sign by leading her to believe she was signing something else.
Actual fraud is an intentional fraud and the intent to deceive is an essential element thereof. Constructive fraud is a breach of a legal or equitable duty which, irrespective of the moral guilt, the law declares fraudulent because of its tendency to deceive others or violate a confidence and neither actual dishonesty of purpose or intent to deceive is necessary. (37 C.J.S., Fraud, § 2; 23 Am. Jur., Fraud and Deceit, § 4.)
This court has recognized the following distinction between actual and constructive fraud:
Black's Law Dictionary defines actual fraud:
Under appellant's allegations and proof, if she were cheated it had to be by some artifice or trick resulting in actual fraud.
The appellant contends the trial court erred in concluding that the doctrine of independent advice had no application to the controversy.
The trial court concluded on this issue:
We are inclined to agree with the conclusion of the trial court.
We adhere to the rule that where a substantial gift is made by a person of weak or infirm mind to a person in a confidential relationship, undue influence amounting to constructive fraud will be presumed and the donee can only be freed of the presumption by satisfactory proof that the donor had independent advice. (Flintjer v. Rehm, 120 Kan. 13, 241 Pac. 1087; Madden v. Glathart, 125 Kan. 466, 265 Pac. 42; Jernberg v. Evangelical Lutheran Home for the Aged, 156 Kan. 167, 131 P.2d 691.)
However, in this case the appellant makes no contention either in her pleading or proof that she was in any way influenced or persuaded to sign the quitclaim deed because of a confidential relationship. She rather contends that she was defrauded through artifice or trickery. A confidential relationship that had no influence on the transaction in question furnishes no ground for relief, neither does it invoke the doctrine of independent advice.
Undue influence must be specifically pleaded. (Brazee v. Morris, 68 Ariz. 224, 204 P.2d 475.) In 25 Am.Jur.2d, § 42, p. 403, the general rule is stated:
*358 The appellant contends the trial court's finding that the gift was voluntarily and knowingly made by the plaintiff to the defendants with donative intent is contrary to the evidence. We cannot agree. The court considered the testimony of the two vital witnesses, the appellant and the appellee, gave attention to their demeanor and candor "and in some instances lack of candor," and decided that the appellee was telling the truth. We have consistently held that the appellate court is not concerned with the credibility of witnesses or the weight of their testimony, and the trier of facts, not the court of appellate review, has the responsibility of determining what testimony should be believed. (State v. Shaw, 195 Kan. 677, 408 P.2d 650; Kramer v. Farmers Elevator Co., 193 Kan. 438, 393 P.2d 998; White v. Rapid Transit Lines, Inc., 192 Kan. 802, 391 P.2d 148; Stumfoll v. Inman, 188 Kan. 553, 363 P.2d 443.)
The appellant has challenged numerous findings of the trial court as not supported by the evidence. Space will not permit us to give them individual attention. We have examined the evidentiary findings of the trial court which were ancillary to its conclusory finding and we have discovered no error prejudicial to the rights of the appellant.
In view of the determination reached in the case on the merits, the question of the statute of limitations raised by appellee in her cross-appeal is no longer a material issue.
A careful consideration of the record discloses no error which would require the granting of a new trial.
The judgment is affirmed.
APPROVED BY THE COURT.