Opinion ID: 1430158
Heading Depth: 2
Heading Rank: 6

Heading: Whether Wife unduly influenced Husband to transfer the family residence from Husband's separate property to joint tenancy in Husband and Wife.

Text: In New Mexico, transactions between husbands and wives are governed by Section 40-2-2, N.M.S.A. 1978, which provides: Either husband or wife may enter into any engagement or transaction with the other, or with any other person respecting property, which either might, if unmarried; subject, in transactions between themselves, to the general rules of common law which control the actions of persons occupying confidential relations with each other. A claim of undue influence within a confidential relationship appeals to the conscience of the court of equity. The general rule as to what constitutes undue influence within a confidential relationship in New Mexico was stated in Trigg v. Trigg, 37 N.M. 296, 302, 22 P.2d 119, 123 (1933), as a moral, social, or domestic force exerted upon [a party] so as to control the free action of his will. The standard set forth in Trigg provides the general parameters for the court of equity. The analysis begins with the presumption of undue influence when plaintiff establishes: (1) a certain kind of relationship between parties giving rise to the presumption, such as the relationship between husband and wife; (2) one party is benefited at the expense of the other. See Walters v. Walters, 26 N.M. 22, 188 P. 1105 (1920). Although there is a presumption of undue influence in certain types of confidential relationships such as that between husband and wife, most courts consider the circumstances of each particular case. See, e.g., Cardenas v. Ortiz, 29 N.M. 633, 226 P. 418 (1924). The analysis which employs a presumption of undue influence on the one hand, and consideration of particular circumstances on the other, is consistent with the bursting bubble theory of presumptions. The bursting bubble theory is simply that [t]he trial judge need only determine that the evidence introduced in rebuttal [of the presumption] is sufficient to support a finding contrary to the presumed fact. McCormick on Evidence § 345 at 821 (2d ed. 1972) (footnote omitted). The presumption of undue influence in a confidential relationship will be applied unless it is determined that defendant's evidence presented in rebuttal is sufficient to overcome the presumption. See Walters v. Walters, supra (defendant failed to present any evidence to rebut the presumption). If the parties present conflicting evidence, the court of equity will consider the circumstances of the case in arriving at a determination. See Curtis v. Curtis, 56 N.M. 695, 248 P.2d 683 (1952). In the case at bar, Husband has shown that the parties were married and that Wife benefited. The evidence presented by Wife to rebut Husband's prima facie case consists of the testimony of the attorney who assisted the parties in preparing the deed in issue, and Wife's testimony as to why the residence was placed in joint tenancy. The testimony of the attorney was that Husband appeared to be of sound mind when he signed the deed. If this were the only evidence presented by Wife to rebut the presumption of undue influence, it would not be sufficient. Husband's mental competence is not at issue on appeal. What is at issue is whether Husband acted sufficiently of his own free will when he created the joint tenancy. Wife's testimony was that Husband executed the new deed because he wanted to be sure to protect his family, as the parties believed that Husband's brother would inherit the house if Husband died before the residence was placed in joint ownership. Although Wife's evidence is lean, it is adequate to rebut the presumption of undue influence. As the evidence is conflicting, this Court will now consider the circumstances of this case. The record shows that in 1977, Husband executed a deed which served to place the family residence in joint tenancy between Husband and Wife. The Husband had acquired the house in 1968, following probate of his mother's estate. The house had been purchased by Husband's mother before her death. Husband's three brothers and sisters agreed with Husband to convey their interest in the house to Husband after Husband paid each one a thousand dollars. These payments were made with Husband's funds received by way of inheritance from his mother. The agreement was pursuant to his mother's wishes that the house remain Husband's separate property. Husband acquired the house subject to a mortgage of some thirteen thousand dollars. Monthly payments were made on the home for about three years from community funds. The house was paid for in full in 1971 with funds later received by Husband from his mother's estate. Husband bases his claim of undue influence on his alleged vulnerable mental and physical state at the time he executed the deed, and on Wife's alleged aggressive temperament as contrasted to his more timid character. Husband claims his wife constantly pressured him to make the transfer at a time when he was dependent on the use of tranquilizers and alcohol, and at a time when he was suffering from assorted maladies related to his disability. His disability is due to peptic ulcers which necessitated removal of part of Husband's stomach. Wife admits that she was very interested in having the house placed in joint tenancy. She claims that she wanted the house transferred to joint tenancy because it was only right that Husband and Wife share their property in case something should happen to Husband. Undue influence classically involves a situation where a victim's loss is directly related to the trust that the victim had in the wrongdoer. See D.B. Dobbs, Remedies § 10.3 (1973). While the case at bar is a close one, it is not clear that Wife is a wrongdoer or that Husband completely trusted Wife. It was certainly a legitimate concern of Wife that she have an interest in the home, particularly in the light of Husband's poor health. The preoccupation with joint ownership does not make Wife a wrongdoer. In the light of the evidence presented as to how poorly Husband and Wife got along during their marriage, it cannot be inferred that there was a complete trusting relationship between them. When Husband decided to change the deed, he did so despite the poor relationship he had with Wife. While it might be inferred that Husband's will finally succumbed to Wife's pressure at a time when Husband was mentally and physically vulnerable, it might also be inferred that Husband came to realize that his health was fragile and it was time he did something regarding his Wife's future well-being in case he should die. In view of the particular facts of this case, we hold that there was substantial evidence to support the trial court's conclusion that Husband was not unduly influenced at the time he executed the joint tenancy deed in issue.