Court Opinion

ID: 6903211
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:57:05.492403+00
Date Added: 2024-06-11T16:06:14.683481
License: Public Domain

Mr. Justice Bean
delivered the opinion of the court.
No articles of partnership were executed. At the time of the execution of the instrument in question, plaintiff and defendant were so brotherly that it seemed that there was no necessity for any written agreement in regard thereto. Until after the etiquette of Chicago did not compare favorably with that of the backwoods Oregon ranch, plaintiff would have given defendant his money if he had needed it, and defendant would have conveyed to plaintiff title to all his land, if some excuse therefor had been shown. In short, the whole transaction was a family affair. Much of the evidence relates to the cause and details of the estrangement between the brothers. Both look through differently colored glasses from formerly. This evidence may be eliminated with a wish that their mental wounds will soon heal.
1. The real question for determination is: Was the property conveyed to plaintiff as a gift, or was it the understanding that he and his wife should live with defendant and cultivate and improve the farm for five years, and then have such share? If the latter, then plaintiff failed to comply with the terms of the arrangement, and it would be inequitable and unfair to defendant to sustain the conveyances. No actual fraud in the deal is imputed to plaintiff. These family contracts stand in a class of their own.
2, 3. A gift obtained by any person standing in a confidential relation to the donor is- prima facie void, and the burden is thrown upon the donee to establish to the satisfaction of the court that it was the free, voluntary, unbiased act of the donor. A court of *18equity, on the grounds of public policy, watches such transactions with a jealous scrutiny, and to set them aside it is not necessary to aver or prove actual fraud, or that there was such a degree of infirmity or imT becility of mind in the donor as amounts to legal incapacity to make a will or execute a valid deed or contract: Todd v. Grove, 33 Md. 188.
4. The relation of the parties at the time of the alleged gift was as follows: Defendant, Samuel F. Jenkins, had been less accustomed to transact business than Jay, his brother. Each had implicit confidence in the other. In this magnanimous gift arrangement, no unfair advantage should be gained by either. When they could not run the sawmill and agree, it was shut down, and soon after plaintiff went to work elsewhere. All the circumstances indicate that defendant thought that if the deal “fell through” the deed and bill of sale would be of no effect. Plaintiff entertained the idea that as soon as the conveyances were executed he was the absolute owner of one-half of the property, and so claims the same.
In Rhodes v. Bates, 1 Ch. App. 256, a case between two brothers, Sir Gr. J. Turner, L. J., said:
“I take it to be a well-established principle of this court that persons standing in a confidential relation towards others cannot entitle themselves to hold benefits which those others may have conferred upon them, unless they can shew to the satisfaction of the court that the persons by whom the benefits have been conferred had competent and independent advice in conferring them. This, in my opinion, is a settled general principle of the court, and I do not think that either the age or capacity of the person conferring the benefit, or the nature of the benefit conferred, affects this principle. Age and capacity are considerations which may be of great importance in cases in which the principle does not apply; but I think they are but of little, *19if any, importance in cases to which the principle is applicable. They may afford a sufficient protection in ordinary cases, but they can afford but little protection in eases of influence founded upon confidence.”
In Story’s Equity Jurisprudence (13 ed.), Section 307 et seq., there is found a very complete statement of the law applicable to this case. According to Section 307, in cases of constructive frauds, which arise from some peculiar, confidential, or fiduciary relation between the parties, there is often to be found some intermixture of deceit, imposition, over-reaching, unconscionable advantage, or other mark of direct and positive fraud. But the principle on which courts of equity act in regard thereto stands independent of any such ingredients, upon a motive of general public policy; and it is designed in some degree as a protection to the parties against the effects of overweening confidence and self-delusion, and the infirmities of hasty and precipitate judgment. These courts will therefore often interfere in such cases, where but for such peculiar relation they would either abstain wholly from granting relief or would grant it in a very modified and abstemious manner: See, also, Osmond v. Fitzroy, P. Wms. 129.
The relation of the parties at the time the instruments in question were executed was such as to compel the plaintiff to make a full discovery of the purport of the conveyances to his brother and partner, or abstain from gaining any selfish benefit in the transaction. It appears that plaintiff suggested and wrote the preliminary contract, and gave the attorney the information in regard to drawing the other documents. It is not to be presumed that defendant at his age and in his station of life, freely, voluntarily and advisedly gave away and conveyed one-half of his home, and one-half of all the other means by which he could ob*20tain subsistence during his old age, without expecting anything in return. The deal amounted to a constructive fraud upon the defendant, which vitiates the contract: Kroll v. Coach, 45 Or. 495 (78 Pac. 397, 80 Pac. 900). There are no intervening rights and the proper relief can be granted: Parrish v. Parrish, 33 Or. 486 (54 Pac. 352); Finlayson v. Finlayson, 17 Or. 347 (21 Pac. 57, 11 Am. St. Rep. 836, 3 L. R. A. 801).
5. The deed and bill of sale should be annulled and canceled of record. The property therein described should not be considered in settlement, except as to the increase thereof, leaving as partnership property one portable sawmill with all the equipments thereto belonging, and the crop raised upon the land during the year 1911. Since the fall of 1911 plaintiff has contributed little or nothing to aid in the cultivation of the farm, and he should not share in the crops raised since that time. We believe that the partnership agreement was to extend only to the carrying on or cultivation of the farm and the running of the sawmill, until at least the end of the five years from the making of the contract, and the decree of the lower court should be modified accordingly.
The learned circuit judge who tried the cause, very carefully, and with much minuteness considered all the details pertaining to the amounts paid by the different parties and the amounts due to and from each of them in connection with the partnership, and the findings in regard thereto are approved.
With the modification above mentioned, the decree of the lower court is affirmed; neither party to recover costs in this court. Modified : Rehearing Denied.