Court Opinion

ID: 5438349
Source: CourtListenerOpinion
Date Created: 2022-01-08 17:57:52.186543+00
Date Added: 2024-06-11T08:31:55.401603
License: Public Domain

By the Court, Crockett, J.:
In March, 1867, Don Louis Bubidoex, being the owner of a rancho in San Bernardino County, made and delivered to the defendant a power of attorney, which recites that on account of his “general debility and ill health,” he had constituted and appointed the defendant his attorney, for him and in his name, to take possession of and have the charge and control of all his real estate in that county, to commence and prosecute any actions which he might deem necessary, and to appear and defend actions, “and generally to do and perform all matters and things, transact all business, make, execute and acknowledge all contracts, orders and writings (except the signing of deeds of conveyance,) assurances and instruments, which may be requisite or proper to effectuate all or any of the premises, or any other matter or thing belonging to me, with the same powers, and to all intents and purposes with the same validity, as I could if personally present.” When the power was made, Bubidoex. was an old man, in feeble health, and for several years had been rendered almost helpless by a personal injury he had received; and had become so addicted to the excessive use of opium and intoxicating drinks, as greatly to impair his mind. Indeed, the testimony shows conclusively that at the date of the power, and from thence until his death, lie was subject to paroxysms, produced by the use of opium and other stimulants, which rendered him, for the time being, completely imbecile,, and greatly impaired the vigor of his intellect generally. In February, 1868, whilst the power of attorney was in force, and the defendant was acting under it, Bubidoex conveyed to him an undivided fourth part of the rancho then remaining unsold.
*218The only consideration recited in the deed is stated in these words: “ That for and in consideration of the services of the said party of the second part, as attorney in fact of said Louis Bubidoex, Sr., duly performed, and being performed, the value thereof is duly acknowledged, said parties of the first part hereby give, grant, bargain sell,” etc. It is not pretended that there was any other consideration for the deed than the services rendered and to be rendered by the defendant under the power of attorney. The plaintiff is the widow of Bubidoex and the administratrix of his estate; and the action is brought to set aside the 'deed on the ground of the trust relations between Bubidoex and the defendant, and that it was obtained by fraud, imposition and undue influence; and on the further ground that Bubidoex had not sufficient mental capacity to enter into a valid contract. The judgment in the Court below was for the defendant, and the plaintiff appeals.
Among other facts, the Court found “that at the execution of said deed of one fourth of said rancho, the said Bubidoex was of sound understanding, and knew the nature and object of the deed.” But that, for years prior to that time, Bubidoex had been a confirmed invalid, and that his intellect had been greatly impaired by disease and by the excessive use of opium and alcoholic drinks, -was established by the uncontradicted testimony of a number of wit- • nesses. There was, it is true, some evidence tending to show that, on the particular occasion when the deed was executed, he appeared to comprehend the terms o'f the instrument, and had sufficient intellect remaining to understand the nature of the transaction; but so far as we can judge from the record, the weight of the evidence was overwhelmingly to the contrary.
But, however'this may be, it is admitted by the answer, that at the date of the deed the defendant was acting under the power of attorney, and the relation of principal and agent existed between the parties. It is further admitted that the defendant was then the attorney in fact of Bubidoex “to look after, care for and protect the interests, and negotiatexsales of the property of the said Louis Bubidoex, Sr., *219deceased.” While thus undertaking to care for and protect the interests of Rübidoex, and to negotiate sales of his property, he becomes himself the purchaser of one fourth of a valuable property. The relations between them were of a fiduciary nature; and in such cases the law exacts from the agent the utmost good faith and fairness in all dealings between them relating to the subject-matter of the agency. It may be regarded as a prevailing principle of the law that an agent must not put himself, during his agency, in a position which is adverse to that of his principal. For even if the honesty of the agent is unquestioned, and if his impartiality between his own interest and his principal’s might be relied upon, yet the principal has, in fact, bargained for the exercise of all the skill, ability and industry of the agent, and he is entitled to demand the exercise of all this in his own favor." (1 Parsons on Contracts, 74, 75; Hilliard on Vendors, 384; Story on Agency, Section 246.)
After stating the rule, “that any act by an agent with respect to the subject-matter of the agency, injurious to his principal, may be avoided by the principal,” as between themselves; as, for example, if an agent to sell become the purchaser, Mr. Hilliard, in his work on Vendors (page 386), proceeds to say that the confidential relations between the principal and agent, and the cestui que trust and the trustee, “are to'some extent identical; all agents being in a certain sense trustees, and all trustees agents;” and that “agents, from the very nature of their employment, standing in a confidential capacity, are clearly subject to the rule” which governs the relation of trustee and cestui que trust. The parties occupying these relations are not absolutely prohibited from dealing with each other in respect to the subject-matter of the agency or trust; but, in all cases of purchases and bargains respecting property directly and openly made between principals and agents, the utmost good faith is required. The agent must conceal no facts within his knowledge which might influence the judgment of his principal, as to the price or value; and if he does, the sale will be set aside. The question, in all such cases, does not turn upon the point whether there" is any intention to *220cheat or not, but upon the obligation, from the fiduciary relation» of the parties, to make a frank and full disclosure.” (1 Story’s Eq. Sec. 316, a.) In such cases, “thelaw presumes the existence of that superiority and influence on the one part, and that confidence and dependence on the other, which is the natural result of the relation, and will accordingly decree the cancelation of the contract, unless it appear affirmatively to have been equal and just.” (1 Story’s Eq. Sec. 329 a.) The burden of proof is on the agent to show, affirmatively, that he acted fairly and in good faith, and without concealment, and that the price paid was fair and just. (1 Story’s Eq. Sec. 311.) The defendant, in this case, has failed to bring himself within these rules. Waiving the question whether Bubidoex had sufficient capacity to contract, it is admitted that he was an old man, greatly enfeebled by disease and by the excessive use of stimulants. In dealing with him in respect to his estate, it was incumbent on' the defendant to disclose to him fully all the information he had acquired as to its present or prospective value, which might tend to enlighten him as to the propriety of selling on the terms proposed. It is not alleged or proved, nor does the Court find that any such disclosure was made. The Court, it is true, finds (contrary, as we think, to the weight of the evidence), that Bubidoex was' of sound understanding, and knew the nature and object of the deed, and “that no fraud nor device was used by said defendant, or any other person in his behalf, to obtain the execution of said deed, and the value of 'the land therein deeded was not an unreasonable consideration for the services rendered and to be rendered by him.” But this is not enough to uphold a transaction of this character between a decrepid, feeble old man and his confidential agent, who is averred in the complaint to have obtained “ an entire ascendancy over the mind” of his principal; an averment which is not denied in the answer. There is nothing in the findings or proofs to rebut the inference that the deed may have resulted from this undue influence. Moreover, the finding as to the fairness and sufficiency of the consideration is not satisfactory. The value of the land *221conveyed may not have been an unreasonable consideration for the services rendered “and to be rendered.” But that is not the proper test. From this the contract does not “appear affirmatively to have been equal and just.” On the contrary, it would seem to be unequal and unjust, and in every respect injudicious for a feeble old man to convey one quarter of his estate to his agent as a compensation for services not then rendered, and which might never be rendered. In every aspect in which we can view the case, we think this transaction ought not to stand.
Judgment reversed, and cause remanded for a new trial.