Opinion ID: 2379324
Heading Depth: 1
Heading Rank: 2

Heading: sufficiency of proof.

Text: The bill alleges the establishment of the first account in December, 1945, with the daughter Antoinette (now Mrs. Steinert) as a joint owner, subject only to the order of the decedent, its closing and the establishment of the second account in the name of the decedent alone, on July 3, 1952. The bill then alleges that on July 8, 1952, the said decedent was in her last illness with an extremely limited ability to get about and look after her own affairs; that while she was in this state, acting either under fraud, duress and [sic] undue influence of the Defendant, Francis A. Tribull, the account opened on July 3, 1952, by the decedent was changed so that it read: `Anna B. Tribull in trust for herself and Francis A. Tribull, joint owners, subject to the order of either, the balance at death of either to belong to the survivor';   . The next paragraph charged that this last transfer was invalid because of the duress, fraud and undue influence practiced upon the decedent while she was ill, weak and dying, by the Defendant, Francis A. Tribull. No demurrer was interposed to the bill, so that we are not confronted with the question as to whether or not the rather few facts asserted are sufficient to sustain a charge of fraud, duress or undue influence. The rules of good pleading where fraud is charged have often been stated. It is sufficient here merely to refer to Miller, Equity Procedure, Section 93, and the opinion in Upman v. Thomey, 145 Md. 347, 125 A. 860. The first question on this branch of the case is whether or not the charges in the bill are sufficient to permit the plaintiff, without specific mention of a confidential relationship in the bill, to seek to establish his claim on the basis of there having been such a relationship. We think that he may. In Mead v. Gilbert, 170 Md. 592, at 606, 185 A. 668, Judge Offutt, who also wrote the opinion in Upman v. Thomey, supra , said for the Court: Fraud is a generic term and includes constructive fraud as well as actual fraud. In this case, because of the relationship of the parties, the transaction was constructively fraudulent and, apart from any question of actual fraud, will not be permitted to stand unless the beneficiary shows that it was the free, voluntary act of the donor and that her confidence was not abused. The relationship there was found to be a confidential one between an aged, ill and illiterate mother and her son; and the abuse of that confidence was held to constitute a fraud. Conversely, we think, a charge of fraud, actual or constructive, which is not challenged for sufficiency by a demurrer or by an equivalent objection in the answer, is enough to permit the introduction of evidence on the issue of a confidential relationship. The doctrine of confidential relations, it may be noted, is treated by Pomeroy under the heading Constructive Fraud  Inferred from the Condition and Relations of the Immediate Parties to the Transaction. See Pomeroy, Equity Jurisdiction, 5th Ed., Vol. 3, Pt. II, Ch. III, Sec. IV, § 943, 955, et seq. In such cases as Kernan v. Carter, 132 Md. 577, 104 A. 530, and Reeder v. Lanahan, 111 Md. 372, 74 A. 575, the sufficiency of the bill was challenged by demurrer. Gayle v. Fattle, 14 Md. 69, and Grove v. Rentch, 26 Md. 367, were similar. The Gayle case was heard on bill and answer and the bill charged ignorance and inadvertence, but not fraud. In the Grove case, there were exceptions which amounted virtually to a demurrer. On the other hand, in Dennis v. Dennis, 15 Md. 73, at 124, it was stated that: Every material fact, to which the plaintiff means to offer evidence, ought to be stated; but a general charge or statement of the matter of fact is sufficient, and it is not necessary to charge minutely all the circumstances which may conduce to prove the general charge. These circumstances are properly a matter of evidence, which need not be charged in order to let them in as proof. Likewise, in Canton v. McGraw, 67 Md. 583, at 585, 11 A. 287, the Court said: There is no rule of equity pleading which requires the pleader in charging fraud, to set out the proof by which he expects to maintain the charge; and while the law requires the fraud to be proved by clear and satisfactory testimony, it allows a broad scope for the introduction of facts and circumstances bearing even remotely upon the question. Both of the above quotations are included in the opinion in Upman v. Thomey, supra , in support of a like conclusion there reached. Our views on this point are strengthened by the absence of any perceptible surprise or prejudice to the individual appellees in the appellant's claim based upon an alleged confidential relationship. Indeed, the appellant's principal witness telephoned to the appellee, Francis, the day before she testified to discuss her testimony with him. Our views are further strengthened by the liberality with which amendments are permitted under Equity Rule 17 in furtherance of justice. In the light of the authorities above cited as to the scope of permissible testimony in support of a charge of fraud, we think that the Chancellor was in error in striking out the testimony relating to the safe deposit box of the decedent and Francis' right of access thereto. We shall accordingly take it into consideration. The remaining principal question in the case is whether the plaintiff has offered proof of sufficient facts to establish the existence of a confidential relationship between the decedent mother and the defendant son, Francis, and so to throw the burden of proof of the fairness of the transaction upon that defendant. It is by no means free of difficulty. There is no general presumption that a gift from a parent to a child is invalid. Henry v. Leech, 123 Md. 436, 91 A. 694; Williams v. Robinson, 183 Md. 117, 36 A.2d 547. However, if the normal situation of the parties has become reversed, so that the child is in the dominant position, the burden of establishing the fairness of the transaction may be cast upon the child. Willoughby v. Trevisonno, 202 Md. 442, 97 A.2d 307; Gaggers v. Gibson, 180 Md. 609, 26 A.2d 395; Mead v. Gilbert, supra ; Upman v. Thomey, supra ; Thiede v. Startzman, 113 Md. 278, 77 A. 666; Horner v. Bell, 102 Md. 435, 65 A. 736; Whitridge v. Whitridge, 76 Md. 54, 24 A. 645; Beinbrink v. Fox, 121 Md. 102, 88 A. 106 (rule recognized, but gift upheld); Highberger v. Stiffler, 21 Md. 338. Actual fraud or undue influence is not necessary in order to vacate the deed. Highberger v. Stiffler, supra ; Todd v. Grove, 33 Md. 188, Willoughby v. Trevisonno, supra ; Coburn v. Shilling, 138 Md. 177. This case is a battle of presumptions and of the shifting of the burden of proof. The form of the third account is sufficient to create the presumption of a valid trust and gift in favor of Francis. Milholland v. Whalen, 89 Md. 212, 43 A. 43; Hancock v. Savings Bank of Baltimore, 199 Md. 163, 85 A.2d 770; Whittington v. Whittington, 205 Md. 1, 106 A.2d 72. It is rebuttable as to whether a gift was intended. Ragan v. Kelly, 180 Md. 324, 24 A.2d 289; Bradford v. Eutaw Savings Bank, 186 Md. 127, 46 A.2d 284. It may be overcome, if a confidential relation existed at the time of the alleged gift, through the shifting of the burden of proof as to the fairness and reasonableness of the transaction. This burden of proof exists even though the gift may be testamentary in character, for it is incumbent upon the donee to show that the donor understood the nature of the transaction and intended to make a gift. See Hancock v. Savings Bank of Baltimore, supra , both the majority and the dissenting opinions, where the difference was primarily on the application of the rule to the facts. Thus if the plaintiff has adduced sufficient evidence, despite the absence of any presumption against the validity of a gift from a parent to a child, to establish a confidential relation in which the son, Francis, was the dominant party, then the burden of proof shifts to Francis. Advanced age, physical debility and mental feebleness are all facts carrying weight in determining whether a confidential relation in fact existed. Gaggers v. Gibson, supra, at 180 Md. 612-613, citing Mead v. Gilbert, supra , and Gerson v. Gerson, 179 Md. 171, 20 A.2d 567. In the present case there is no evidence in the record to prove mental incapacity. There is, however, evidence of rapidly advancing physical debility. The hospital records show that the decedent was able to walk into the institution on July 1, 1952, but that she had an incurable disease in an advanced stage and died twelve days after being admitted. Francis did not, prior to her going to the hospital, manage her business affairs, but he seems to have moved into them quite actively as to both her safe deposit box and her savings account as soon as he had taken her to the hospital. She had shown confidence in him by giving him joint access to the safe deposit box. There is no suggestion that he abused her confidence with regard to the contents of that box, and the evidence indicates quite the contrary; but giving him access to the box was certainly a mark of confidence. The changes in the savings account seem on the evidence in the case, which is far from ample, to present a different kind of situation. The account from December, 1945, to early July, 1952, had been in a form in which the decedent had control of it, but the daughter, now Mrs. Steinert, had full ownership, if she survived her mother. Mrs. Steinert's testimony indicates, however, that the account was put in that form solely as a matter of convenience for the mother, and it is a noteworthy fact that Mrs. Steinert seems to have been quite consistent in adhering to this view, for she made no claim of ownership of the deposit after her mother's death. It is also worthy of note that during the period of estrangement between the decedent and Mrs. Steinert, the decedent made no change in the form of this account, though she made a number of withdrawals from it. Accepting Mrs. Steinert's view of the account as a matter of convenience for her mother as correct, we should find no ground for criticism of the transfer of the account to Mrs. Tribull's name alone, if the transfers had stopped there. But they did not. On the contrary a few days after the second account was established, the change to the third form was made, and for practical purposes, Francis took control. He arranged both transfers, and so far as appears took the initiative in doing so. He was the only one who dealt directly with the bank and he must have been the one who obtained his mother's signature to the several documents required by the bank to accomplish the transfers. In view of the past history of this account and of the rather obvious need to have funds readily available for the payment of hospital expenses, a transfer to an account subject to the order of either Mrs. Tribull or of her son, Francis, who seems to have assumed charge of his mother's going to the hospital, would have been a matter of convenience. The form of the third account did not, however, stop there; it put Francis in the position of a joint owner. Mrs. Steinert's testimony as to the establishment of the first account, in which Mrs. Steinert was designated as a joint owner, though she stated that the purpose of the change was simply to enable Mrs. Steinert to make withdrawals for her mother, suggests strongly that Mrs. Tribull was not aware of the legal import of the form of account in trust for herself and another as joint owners, the balance on the death of either to belong to the survivor. There is nothing to show that she was any better informed on this subject at the time of her last illness. It is perfectly clear that in July, 1952, she had no contact with the bank otherwise than through Francis, and the bank official who made the changes for the bank made it clear that he had no conversation with her as to her wishes. Francis' conduct with regard to this account both before and after his mother's death casts doubt upon his position. He told none of the other legatees of the change before his mother's death and he volunteered none afterwards. When the question of the account came up at the reading of the will, after a good deal of discussion, he said he would turn the account over to the executor. Later he claimed he had not had time to do so, though he continued to reassure the executor. After consulting counsel, which he was certainly entitled to do, he ultimately took the legal position that the account belonged to him and that he would not turn it over. (Because of the incompleteness of the record, which does not show either the date of the reading of the will or the date of its probate, it is impossible to tell whether the account in the name of Francis and his wife was established before or after his promise to turn the fund over to the executor or his reassurances on that subject.) We think that in spite of the paucity of the record, there was enough to show that the decedent, during her final illness, reposed confidence in and relied upon her son Francis in such business affairs as she then undertook, that she was somewhat advanced in years and was in very seriously weakened physical condition, and that Francis assumed charge of and exercised control over her business affairs at least insofar as her safe deposit box and savings account were concerned. These facts, we think, indicate that a confidential relationship existed, and the burden was therefore cast upon Francis to sustain the transfer of the savings account to himself as a joint owner with his mother, with right of survivorship. His only effort so far to do so occurred during the cross-examination of Mrs. Steinert. He sought to show that the gift was made by their mother in recognition of his being more loyal to her  presumably more loyal than the other children. The answer upon which this contention is based is so garbled or confused as to be almost unintelligible. If that were the reason for the gift, perhaps it can be better developed at a later stage of proceedings. In view of our holding that this suit may be maintained by a residuary legatee and our further holding that the evidence adduced was sufficient to show the existence of a confidential relationship, it will be necessary to remand the case for further proceedings not inconsistent with this opinion. Since the decree dismissing the bill was entered at the conclusion of the plaintiff's case and before the appellees had gone on with their case, we deem it appropriate to remand the case without affirming or reversing the decree, for further proceedings as stated above, with the right to any of the parties to offer additional testimony, and to apply for leave to make amendments to the pleadings in accordance with Equity Rule 17. Case remanded without affirming or reversing the decree, for further proceedings not inconsistent with this opinion; with costs of this appeal to the appellant.