No. 12238 INTHE SUPREME COURT OF THE STATE OF MONTANA 1972

JOHN F

# .PATTERSON, JR.

## ,SPECIAL ADMINISTRATOR OF THE ESTATE OF CLARA M. MODLIN, Deceased, Plaintiff and Respondent,

ANNA K. HALTERMAN and THE FIRST NATIONAT, BANK OF MISSOULA, MONTANA, Defendants and Appellants.

Appeal from: District Court of theFourth Judicial District, Honorable JackL. Green, Judge presiding

# . Counsel of Record: For Appellants: Worden, Thane, Haines and Williams, Missoula, Hontana. Shelton 

### C. Williams argued, Missoula, Montana.. For Respondent: Mulroney

# ,Delaney and Dalby

# ,Missoula

# ,Montana. Dexter Delaney argued, Missoula, Montana. Boone, Karlberg and Haddon, Missoula, Montana.

Submitted: November 

### 30, 1972

Decided: 

## JAN24 1973 Filed: 

## JAN 2 19T3

### %re Justice Gene R, Daly delivered the Opinion of the Court,

This actionwas commenced in the district court of Missoula Counry by John F, Patterson, Jr., a practicing attorney, acting in his own behalf inhis capacity as special administrator of the escate of Clara M. Modlin, deceased. The suitjoined Anna K. Yal-terman and the First National Bank of Missoula asparties defendmt. However, the status of thebank was that of a stakeholder with no interest in the outcome and it didnot participate inthe trial. The trialcourt, sittingwithout a jury, entered findings

l~f fact, conclusions of law and judgment for the plaintiff, which held that defendant Anna K. Halterman had no claim ina particular savings account and a certificate of deposit and directed defendant 5irstNational Bank of Missoula topay over the savings account drld certificate of deposit tothe estate. From the judgment, the court's denial of her motion to amend the findings of fact and cunclusions of law, and her motion for 

### a new trial, 

### Mrs. Halterman appeals. Undisputed facts appearing in the record are that Clara Modlin died on October 26, 1968, atthe age of 88 years. On March 

### 22, 1968, about seven months prior tohew death, 

### Mrs. Halterman was named as ioint tenant with Clara Modlin in 

### a savings account with a balance at 

### that time of approximately $1,065.89 and ina certificate of deposit wit11 

### abalance at that time of approxi.mately $5,523.62, both 2Ewhich were and areheld by the First National Bank of Missoula. About three years prior toher death, Clara Modlin executed

d 

### will which was admitted toprobate and under which John F. Patterson, Jr, was appointed special administrator. Mrs. Halterman, niece of Clara Modlin, was not a beneficiary under thewill. The willdivided the entire estatebetween Mr. Glen Boyer, husband of a predeceased daughter, and two granddaughters, children of Glen Boyer. Plaintiff testified hehad assisted Clara Modlin in two transactions concerning her property. On August 18, 1967, he drew 

### adeed which created a joint tenancy of Clara Xodlin and Glen Boyer inher home, worth about $14,000, On April 

### 7, 1968, he helped her complete a change of beneficiary form which designated Glen Boyer beneficiary of two lifeinsurance policies owned by Clara Modlin, amounting toabout 

### $500. During the two year period preceding her death, Clara Modlin

was in a state of declininghealth, She resided ather home as long as she was able then entered St. patrick's Hospital in Missoula. She later spent ten months to a year in the Hillside Yanor Nursing Home inMissoula, and was finally again admitted to St. Patrick's Hospital, where she died, Xrs, Halterman testified that thejoint tenancy transaction of March 

### 22, 1968between she and Clara Modlin was not made pursuant to any preexisting debt or any express or implied contract for services rendered or goods delivered. The disputed facts, which are the crux of the lawsuit and appeal, concern (1) whether on March 

### 22, 1968, Clara Modlin had the mental capacity tocomprehend the nature of the transaction enteringMrs. 

### alterm man's name on the two bank accounts as joint tenant; 

### (2) whether Clara Modlin was capable of and formed an intention tomake a gift to

### Mrs. Halterman, and 

### (3) whether 

### Mrs. Halterman had exerted undue influence on Clara Modlin. Two assignments of error involve questions of law: (a) whether theplaintiff's original complaint stated a claim entitling him torelief; and (b) whether the trialjudge erred inexcluding certain evidence offeredby defendant. The remaining assignments of error relate to the three issues of fact, Considering firstthe law issues, we find that the cases cited by defendant in support of her motion to dismiss the original complaint predate the adoption of the rules of civilprocedure in effect atthe time the complaint was filed. The original complaint

was no model of draftsmanship, but it does not invoke any serious due process question of lack of notice todefendants. The complaint was amended toconform to the proof at trial.

### The 

### excluded evidence which defendant assigns as error concerns statementsmade by Clara Modlin to Mrs. Halterman and a Mrs. 

### Stevenson,as to Clara Modlin's attitude toward her granddaughters and her intention regarding the disposition of her property. We find the trial judge acted within his discretion in 

### excluding the offered testimony on various grounds. The proposed testimony of both witnesses falls squarelyunder the hearsay rule stated in section 93-401-2,R.C.M. 1947. The proposed testimony of Mrs. Halterman falls squarelyunder the dead man statute R.C.M. section 93-701-3,11947. The proposed testimony had questionable probative value, in light of the preceding evidence concerning Clara ~odlin'ssenility at the time the statementswere made. Consideringnow the fact issues,we find the transaction which placed Mrs. 

## t alter man's name on the two bank deposits to be valid and binding must meet the legal requirements of a gift intervivos. Section 67-1706,R.C.M. 1947, states:

1'

### A gift is a transfer of personal property made voluntarily, and without consideration.11 

### In InreBrown's Estate, 122Mont. 451, 455, 206 P.2d 816, this Court stated:

II

### To constitute a gift of a chattel theremust be 

### (1) an intention on the part of the donor to make the gift; (2) delivery by the donor of the subject matter of the gift, and 

### (3) acceptance of the gift by the donee. 11 

### See also: State Board of Equalizationv. Cole, 122Mont. 9,195 P.2d 989; Fender

### v. Foust, 82Mont. 

### 73, 265 P. 15. It is requirement 

### (1) from Brown which is determinativehere, Ifby 

### reason of old age inducing senility, illness inducing incompetence,undue influence, or a combination of these factors, Clara Modlin did not have a rational, independent intention to make a gift, i.e. the requisite donative intent, therewas no gift. 38 C.J.S. Gifts $5 13,34, 

### explain the requirement inmore detail:I1 

### 5 13 in pertinent part states: It is essential to the validity of a gift that the donor shallhave sufficient mental capacity to make a gift;a gift by a donor mentally incompetent is 

### void.11 

### 5 34 in pertinent part states: "Freedom of will on the part of the donor is essential to the validity of a gift, and where the donor has been induced to make a gift through fraud,duress or undue influence the gift may be set aside. In determiningwhether fraud or undue influence invalidating a 

### gift exists, the courtswill look to the special facts of each case. The court must consider the situation of the parties, the conditions that surround them, the attitude that they occupy toward each other, and the influences that control their actions. Thus, in determiningwhether undue influence entered into a transferby gift, consideration will be given to the nature of the relationship between the donor and donee, the donor's susceptibility to undue influence,and the reasonablenessof the transfer in light of the existing circumstances," (Emphasis added).
Ar 

### trial, plaintiff introduced four witnesses to testify concerning Clara ~odlin'sstate of health and mental capability during the general time span inwhich the joint tenancy transactionwas carried out. The witnesses were: the plaintiff John F. Patterson, Jr., Clara ~odlin's attorney formany years;Dr. Gerald

### A. Diettert, M.D., 

### Clara ~odlin's physician for the five years preceding her death;Geraldine

### A. OIConnor,a registered nurse at the Hillside )faanor Nursing Home; and J. 

### Lynn Kellogg, a recently retired director of 

### the First National Bank of Missoula,who formany yearswas acquaintedwith Clara Modlin in his professional capacity. Defendant introduced sixwitnesses for the same purpose: Sarah Stephenson,Kate J. Rasmussen, Wes Waldbillig, Ruth Bloom, and Theodora T. Reed, all long time personal friends of Clara Nodlin; and Mrs. Halterman, the defendant. 

### A seventhwitness, Wallace 

### E. Small of the FirstNational Banlc ofMissoula, testified basically about bank policy and his observations of the joint tenancy transactions, The testimony of plaintiff's and defendant's witnesses concerning Clara ~odlin's physical and mental condition,her susceptibility to influence,and the question ofwhether shehad been influenced, was in conflict. This, as we have stated, is the determinative issue of 

### the case.The burden of proof for undue influence and the basic elements for the court's consideration indetermining the fact of undue influencewere statedby this Court in In reEstate of Mack 

### G. Hall, Mont

# . -9 492 P.2d 1388, 1394, 29 St,Rep. 53,62, quoting from Estate of Maricich, 145 Mont. 146, 161, 400 P.2d 873:

11 1The law inthe cases concerning undue influence places upon the contestant the burden of proof in showing substantial evidence of undue influence. 

### In determining this issue on undue influencewe may consider:

'I' (1) Confidential relationship of the person attempting to influence the testator [donor]; "'(2) The physical condition of the testator [donor] as it affectshis ability towithstand the influence; 

# "'(3) The mental condition of the testator [donor] as it affects his ability towithstand influence; "'(4) The unnaturalness of the disposition as it relates to showing an unbalanced mind or a mind easily susceptible toundue influence; and 

## "'(5) The demands and importunities as they may affect the particular testator [donor] taking into consideration the time, the place, and allthe surrounding circumstances

# .I I' Although inHall this expression of legal principles 

### is directed toward an alleged undue influence on a testator inmaking a will, the same basic criteria apply toan alleged undue influence on a donor inmaking a gift, and they areparticularly pertinent in the instant case, since the nature of the alleged giftwas essentially testamentary inpartially defeating the effect of the donor's 

### will. Reviewing, then, the evidence as it relates to the various criteria enumerated inHall, the record discloses that Mrs. Halter

# - man was a close friend and blood relative of Clara Modlin. In the opinion of her physician, Clara Modlin suffered from cerebral arteriosclerosis and was disoriented and forgetful. In the opinion of her nurse, she was more susceptible to suggestion than the average healthy person. 

### The unnatural effect of thisjoint tenancy transaction was to partially defeat the provisions of her will toward closer relatives. 

### Mrs. Halterman ina letterwhich was introduced attrial, and testified toattrial, suggested to Clara Modlin that "she put someone else's name on her savings account"./ It isreadily apparent that on some material points the testimony of plaintiff's and defendant's witnesses was contradictory. It also appears therewas an inherent contradiction in the plaintiff's own testimony regarding Clara Modlin's competency

on the dates of the two joint tenancy transactions inwhich he participated. However, we find therewas ample evidence, if believed, that would fully support the court's findings of fact. In Stromberg 

### v. Seaton Ranch Company, Mont

# . , 502 P.2d 41,48, 29 St.Rep. 

### 848, this Court stated the pertinent rule of appeal and errorwhich must be applied to the factual issues raised

on appeal: "As is indicated in the summary of the facts, there was an unusual amount of evidence presented to the trialjudge which resulted innumerous conflicts in the evidence. He was the one who had the only opportunity to see and hear allwitnesses. Each party makes a strong argument that these facts and circumstances favor hisposition. Yet, ashas been statedby this Court too many times torequire citation, it isnot this Court's province toreview the record of the trial court to determine whether or not we agree with the conclusions reached, if supported by the evidence. We must indulge the presumption that thejudgment of thr district court iscorrect and willnot be disturbed unless there isa clear preponderance of evidence against it 

## - when viewed in the light most favorable to the prevailing party ;k 9: 9; 

### " (Emphasis added), Accordingly, in light of the facts and in the absence of a showing of a clear preponderance of evidence against the trial court's findings of fact and conclusions of law, thejudgment of the district court is affirmed.