Title: PATTERSON v HALTERMAN
Citation: N/A
Docket Number: 12238
State: Montana
Issuer: Montana Supreme Court
Date: January 24, 1973

No. 12238 I N THE S U P R E M E COURT O F THE STATE O F MONTANA 1972 JOHN F . PATTERSON, JR. , SPECIAL ADMINISTRATOR O F T H E ESTATE O F C L A R A M. MODLIN, Deceased, Plaintiff and Respondent, ANNA K. H A L T E R M A N and T H E FIRST N A T I O N A T , BANK O F MISSOULA, MONTANA, Defendants and Appellants. Appeal from: D i s t r i c t Court of the Fourth Judicial District, Honorable Jack L. 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: JAN 2 4 1973 Filed : JAN 2 19T3 %re Justice Gene R , Daly delivered t h e Opinion of the Court, This action was commenced i n the d i s t r i c t court of Missoula Counry by John F, Patterson, Jr., a practicing attorney, acting in h i s own behalf i n h i s capacity a s special administrator of the escate of Clara M. Modlin, deceased. The s u i t joined Anna K. Yal-terman and the F i r s t National Bank of Missoula a s p a r t i e s defend- mt. However, the s t a t u s of the bank was t h a t of a stakeholder with no i n t e r e s t i n t h e outcome and it did not p a r t i c i p a t e i n t h e t r i a l . The t r i a l court, s i t t i n g without a jury, entered findings l ~ f f a c t , conclusions of law and judgment f o r the p l a i n t i f f , which held t h a t defendant Anna K. Halterman had no claim i n a p a r t i c u l a r savings account and a c e r t i f i c a t e of deposit and directed defendant 5 i r s t National Bank of Missoula t o pay over the savings account drld c e r t i f i c a t e of deposit t o the e s t a t e . From the judgment, the c o u r t ' s denial of her motion t o amend the findings of f a c t and cunclusions of law, and her motion f o r a new t r i a l , Mrs. Halterman appeals. Undisputed f a c t s appearing i n the record a r e t h a t Clara Modlin d i e d on October 26, 1968, a t the age of 88 years. O n March 22, 1968, about seven months p r i o r t o hew death, Mrs. Halterman was named a s ioint tenant with Clara Modlin i n a savings account with a balance a t that t i m e of approximately $1,065.89 and i n a c e r t i f i c a t e of deposit wit11 a balance a t t h a t time of approxi.mately $5,523.62, both 2 E which were and a r e held by the F i r s t National Bank of Missoula. About three years p r i o r t o her death, Clara Modlin executed d will which was admitted t o probate and under which John F. Pat- terson, Jr, was appointed special administrator. M r s . Halterman, niece of Clara Modlin, was not a beneficiary under the w i l l . The w i l l divided the e n t i r e e s t a t e between M r . Glen Boyer, husband of a predeceased daughter, and two granddaughters, children of Glen Boyer. P l a i n t i f f t e s t i f i e d h e had assisted Clara Modlin i n two trans- actions concerning her property. On August 18, 1967, he drew a deed which created a j o i n t tenancy of Clara Xodlin and Glen Boyer i n her home, worth about $14,000, O n April 7, 1968, he helped her complete a change of beneficiary form which designated Glen Boyer beneficiary of two l i f e insurance p o l i c i e s owned by Clara Modlin, amounting t o about $500. During the two year period preceding her death, Clara Modlin was in a s t a t e of declining health, She resided a t her home a s long a s she was able then entered St. p a t r i c k ' s Hospital i n Missoula. She l a t e r spent ten months t o a year i n t h e H i l l s i d e Yanor Nursing Home i n Missoula, and was f i n a l l y again admitted t o St. Patrick's Hospital, where she died, X r s , Halterman t e s t i f i e d that the j o i n t tenancy transaction of March 22, 1968 between she and Clara Modlin was not made pursuant t o any preexisting debt o r any express o r implied contract f o r services rendered o r goods delivered. The disputed f a c t s , which a r e the crux of the lawsuit and a p p e a l , concern (1) whether on March 22, 1968, Clara Modlin had the mental capacity t o comprehend the nature of the transaction entering Mrs. alterm man's name on the two bank accounts a s j o i n t tenant; (2) whether Clara Modlin was capable of and formed an intention t o make a g i f t t o Mrs. Halterman, and (3) whether Mrs. Halterman had exerted undue influence on Clara Modlin. Two assignments of e r r o r involve questions of law: (a) whether t h e p l a i n t i f f ' s o r i g i n a l complaint s t a t e d a claim e n t i t l i n g him t o r e l i e f ; and (b) whether the t r i a l judge erred i n excluding c e r t a i n evidence offered by defendant. The remaining assignments of e r r o r r e l a t e t o the three issues of f a c t , Considering f i r s t the law issues, we find t h a t the cases c i t e d by defendant i n support of her motion t o dismiss the o r i g i n a l com- p l a i n t predate the adoption of the r u l e s of c i v i l procedure i n e f f e c t a t the time the complaint was f i l e d . The o r i g i n a l complaint was no model of draftsmanship, but it does not invoke any serious due process question of lack of notice t o defendants. The complaint was amended t o conform t o the proof a t t r i a l . The excluded evidence which defendant assigns as error con- cerns statements made by Clara Modlin to Mrs. Halterman and a Mrs. Stevenson, as to Clara Modlin's attitude toward her grand- daughters 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 pro- posed testimony of both witnesses falls squarely under the hearsay rule stated in section 93-401-2, R.C.M. 1947. The proposed testi- mony of Mrs. Halterman falls squarely under 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's senility at the time the statements were made. Considering now 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 inter vivos. Section 67-1706, R.C.M. 1947, states: 1 ' A gift is a transfer of personal property made voluntarily, and without consideration. 1 1 In In re Brown's Estate, 122 Mont. 451, 455, 206 P.2d 816, this Court stated: I I To constitute a gift of a chattel there must 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. 1 1 See also: State Board of Equalization v. Cole, 122 Mont. 9, 195 P.2d 989; Fender v. Foust, 82 Mont. 73, 265 P . 15. It is requirement ( 1 ) from Brown which is determinative here, If by reason of old age inducing senility, illness inducing in- competence, 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, there was no gift. 38 C.J.S. Gifts $ 5 1 3 , 3 4 , explain the requirement in more detail: I 1 5 13 in pertinent part states: It is essential to the validity of a gift that the donor shall have 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 determining whether fraud or undue influence invalidating a gift exists, the courts will 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 determining whether undue influence entered into a transfer by gift, consideration will be given to the nature of the relationship between the donor and donee, the donor's susceptibility to undue i n - fluence, and the reasonableness of the transfer in light of the existing circumstances," (Emphasis added). A r trial, plaintiff introduced four witnesses to testify con- cerning Clara ~odlin's state of health and mental capability during the general time span in which the joint tenancy transaction was carried out. The witnesses were: the plaintiff John F. Patterson, Jr., Clara ~odlin's attorney for many 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 ) f a a n o r Nursing Home; and J. Lynn Kellogg, a recently retired director of the First National Bank of Missoula, who for many years was acquainted with Clara Modlin in his professional capacity. Defendant introduced six witnesses 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 seventh witness, Wallace E. Small of the First National B a n l c of Missoula, 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 of whether she had 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 i n determining the fact of undue influence were stated by t h i s Court i n In r e Estate 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 1 The law i n the cases concerning undue influence places upon the contestant the burden of proof i n showing substantial evidence of undue influence. I n determining t h i s issue on undue influence we may consider : ' I ' (1) Confidential relationship of the person attempting t o influence the testator [donor]; "'(2) The physical condition of the testator [donor] as it affects h i s a b i l i t y t o withstand the in- fluence ; "' (3) The mental condition of the testator [donor] as it affects h i s a b i l i t y t o withstand influence; "'(4) The unnaturalness of the disposition a s it relates t o showing an unbalanced mind or a mind easily susceptible t o undue influence; and "' (5) The demands and importunities a s they may affect the particular testator [donor ] taking into consideration the time, the place, and a l l the surround- ing circumstances . I I' Although i n Hall t h i s expression of legal principles i s directed toward an alleged undue influence on a testator i n making a w i l l , the same basic c r i t e r i a apply t o an alleged undue influence on a donor i n making a g i f t , and they are particularly pertinent i n the instant case, since the nature of the alleged g i f t was essentially testamentary i n partially defeating the effect of the donor's w i l l . Reviewing, then, the evidence a s it r e l a t e s t o the various c r i t e r i a enumerated i n Hall, 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 t o suggestion than the average healthy person. The unnatural effect of t h i s joint tenancy transaction was t o p a r t i a l l y defeat the provisions of her w i l l toward closer relatives. Mrs. Halterman i n a l e t t e r which was introduced a t t r i a l , and t e s t i f i e d t o a t t r i a l , suggested t o Clara Modlin that "she put someone e l s e ' s name on her savings account". / It i s readily apparent t h a t on some material points the testimony of p l a i n t i f f ' s and defendant's witnesses was contra- dictory. It a l s o appears there was an inherent contradiction i n the p l a i n t i f f ' s own testimony regarding Clara Modlin's competency on the dates of the two j o i n t tenancy transactions i n which he participated. However, we find there was ample evidence, i f believed, t h a t would f u l l y support the c o u r t ' s findings of f a c t . In Stromberg v. Seaton Ranch Company, Mont . , 502 P.2d 41,48, 29 St.Rep. 848, t h i s Court s t a t e d the pertinent r u l e of appeal and e r r o r which must be applied t o the f a c t u a l issues raised on appeal: "As i s indicated i n the summary of the f a c t s , there was an unusual amount of evidence presented t o the t r i a l judge which resulted i n numerous c o n f l i c t s i n the evidence. He was the one who had the only oppor- t u n i t y t o see and hear a l l witnesses. Each party makes a strong argument t h a t these f a c t s and circumstances favor h i s position. Yet, a s has been s t a t e d by t h i s Court too many times t o require c i t a t i o n , it is not t h i s Court's province t o review the record of the t r i a l court t o determine whether or not we agree with the conclusions reached, i f supported by the evidence. W e must indulge the presumption t h a t the judgment of t h r d i s t r i c t court i s correct and w i l l not be disturbed unless there i s a c l e a r preponderance of evidence against it - when viewed i n the l i g h t most favorable t o the prevailing party ; k 9 : 9 ; " (Emphasis added), Accordingly, i n l i g h t of the f a c t s and i n the absence of a showing of a c l e a r preponderance of evidence against the t r i a l c o u r t ' s findings of f a c t and conclusions of law, the judgment of the d i s t r i c t court i s affirmed.