Court Opinion

ID: 6955659
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:37:10.33232+00
Date Added: 2024-06-11T16:08:15.903909
License: Public Domain

Mr. Justice Thornton, dissenting: I can not agree to the opinion of a majority of the court in this case, and the importance of the principles and the large interests involved, require more than a bare dissent. The opinion holds, that the mind of Carl G. Uhlich was sufficiently active and vigorous to enable him to comprehend fully the intent and effect of the several deeds executed by him. ' After a careful reading of the testimony, I am compelled to a different conclusion. The evidence is voluminous, and a glance can only be taken of it. When Muhlke undertook the management of affairs, Uhlich was eighty years old. He was a native of Saxony, and could neither read, write, nor speak the English language. Though there is some discrepancy in the evidence, as to his mental condition, from the assumption of the agency, in 1861, until his death, in 1867, yet the great preponderance, and the most reliable, indicates an enfeebled condition, both of mind and body. The witnesses for complainant refer to acts and language irreconcilable with a sound and healthy intellect, while the witnesses for defendants generally express mere opinions. A number of persons who had known Uhlich for from seven to twenty years, testified that he was childish, his memory almost a blank, and that often he did not recognize persons whom he had known intimately for years. On the day succeeding the death of his wife, he had forgotten all about the sad event, which naturally would be indelibly impressed upon his memory. For some time before his death he had to be nursed and dressed, as a child. He yielded readily to flattery, and had strong dislikes and prejudices. In the vigor of his manhood, he was intelligent, and was active and prompt, before care and age and sickness had weighed heavily upon him. But for years before his death his conversation was deficient in coherence. At times he was singularly strange and erratic. Though rich, he seriously apprehended that he would be reduced to poverty, and would gather up and eat scraps of meat and bread which had .been thrown away as offal. He would frequently converse upon the subject of religion, the end of the world, and the day of judgment, and would become so excited as to imagine that he saw “the Kingdom of Heaven” and his deceased daughter, in full view. He conceived the idea that, at his death, he would be transferred to the moon. An old acquaintance, who had known him in Saxony since 1828, visited him in 1864, and spoke to him about the politics of the day. The reply shows a crazed condition of mind. It was: “ This amounts to nothing. I am what Mr. Muhlke is. Here they come together, the Turk and the Anti-Christ, and when they get through, the Turk and the Anti-Christ will come and cut everything to pieces, and Chicago.will sink down.” This witness said Uhlich did not speak figuratively, but seemed to be in a state of enthusiasm, and that the conversation was discontinued, and he was satisfied that no man of sense would talk in such manner. In the language of some of the witnesses, Uhlich himself said frequently “he forgot everything.” “He was no longer capable of doing anything any more.” “Sometimes he did not know what he was doing.” “ Had to give up his business to Muhlke, because he was so old, feeble and forgetful.” “ Could not take care of his business, complained of his mind and memory, and wished he was dead.” “ He had to sign whatever he was told; did not know what he was signing, and had to believe whatever Muhlke did.” Language could not depict a more absolute state of dependence and despondency. In 1867, Muhlke himself said to different persons: “The old man is not exactly right in his head all the time.” “ He is in bed on account of old age.” “He did not know what he was doing.” ■ He also admits, in his answer, that Uhlich was unable, alone, to manage his affairs when he undertook the agency. According to the testimony of his family physician, the old man had been afflicted with chronic bronchitis for several years before his death. As age approached he had grown feebler in body and mind. In 1865, when the first deed was executed, he was eighty-four years of age. In 1867, when the grand result was brought about, in addition to more infirm health, a shattered constitution, a vigorous intellect blighted, the death of his wife, estrangement from the only son capable of advising him, and increased old age, he was also blind. Was it right to make a bargain and effect a family settlement with regard to an estate worth $1,000,000, with this semblance of a man, an almost empty casket whence the soul was about to depart? But I do not rely upon the condition of mind, and physical infirmity, alone, to impeach the deeds. There was a relation between the parties more controlling in its influence, and potent in its effects, than that of ordinary principal and agent, and the several deeds must have been the result of this relation and the influence thereby exerted. Muhlke, with the money of his principal, built a house on a lot adjoining his own residence. From this time forward a constant supervision was exercised over the old man. Elizabeth Uhlich says “Muhlke was in every day at Uhlich’s.” Muhlke was not only agent, but confidential adviser; was consulted about a family settlement and a proper distribution of the estate amongst the children. He and his family were constant visitants. The relation was of the most intimate character. Uhlich and wife were so dependent upon him for money and assistance and counsel, that they were induced to believe that he had rescued their fortune from almost total wreck, when it is evident that it was the unparalleled appreciation of property in Chicago which made them one half million of dollars. They were old, credulous and trustful, susceptible to flattery, and so beguiled that no extravagance of language in praise of Muhlke, seemed to them hyperbole^ They called him their “ guardian angel,” whom Providence had kindly sent to shield them from ruin and poverty. The means adopted had the effect to establish an absolute dependence, and an implicit confidence, almost childlike in its character. I shall not undertake to fathom the motives of Muhlke. I desire only to trace the cause, and ascertain the effect, so as to apply the true principle of law, as'I Understand it. Muhlke seemed chary of asking compensation, or demanding a share of the estate, until his power was firmly fixed. Once he spoke to Vanshoove, and said he had done so much for the old man, and he had never referred to the subject of compensation, and made the inquiry: “ How much will he pay me?” This was communicated to the old man. He replied: “Well, I don’t know. What does he want?” Then, in his answer, Muhlke admits that the subject of compensation was spoken of several times during the first four years of the agency, and that Uhlich always postponed the matter with the remark that he desired the relation of father and son to exist between them. Again, in August, 1864, Uhlich said to one Gross, that Muhlke was the most honest man in Chicago; that he had offered to pay him, and he refused to accept anything. The propitious time had not yet arrived. ■ In November, 1864, the removal is made to the new house. It was handsomely fitted up, had gas and hot and cold water, and was grand in the estimation of these plain people, and so very different from anything to which they had been accustomed. Why was this removal made? Uhlich said to Lang: “ Muhlke wanted me near him, so that he could counsel with me all the time.” Daily intercourse followed; Muhlke had entire control; he was Uhlich’s sole dependence for advice; all suspicion was lulled, and the most unbounded confidence existed. Thus matters continued until in January, 1865, when, as I gather from Muhlke’s answer, Uhlich and wife proposed a conveyance to him of one-third of their property, valued at $125,000. He says he was surprised, though flattered, at the proposal, and the evidence of confidence; that he was reluctant to accept; was doubtful whether he would gain in money or comfort; was afraid of jealousies and trouble after Uhlich’s death, and gave an evasive reply. Did the proposition gt first shock him ? Did “ coward conscience” then afflict him? Did honest compunction, and some regard, then, for the higher right of the children, deter him? Or was the object to decoy, and grasp more? The sequel will show. In March, 1865, the offér was renewed and accepted. Muhlke, in his answer, says the offer was liberal, and “ all that, in reason, could be expected.” He had hoped, then, for a larger gift. What had settled his doubts and removed his fears of jealousy and trouble ? His efforts to obtain more had failed, then all doubt and fear vanished, and he gracefully accepted the magnificent donation. The offer was indeed liberal—one-eighth of a million of dollars for less than four years services. They were not of any extraordinary character, requiring unusual or arduous labor, or any outlay of capital, but would have been amply compensated with $3000 or $4000 per annum. From this time until September, 1867, when Muhlke obtained about one-half of the estate, for no consideration except his services for about five years the intimacy continued unabated, and the confidence undiminished. I will mention a few more incidents which occurred before the denouement of the drama. TJhlich was an enthusiast upon the subject of religion. Muhlke prayed with him and read the Bible to him daily. The “golden wedding” followed. There were, prominent, Muhlke, and also Pastor Hartman, the religious adviser of TJhlich,—the one soon to obtain an immense fortune, the other laboring for a donation from the rich man to an orphan asylum. On that occasion, Muhlke presented a handsome bible, worth twenty-five dollars, and had just before purchased a carriage, with Uhlich’s money, costing thirteen hundred dollars, for the accommodation of the old man, who thought he would be beggared by the payment of the small pittance necessary to ride upon the street cars. The pastor performed anew the marriage ceremony, and announced that TJhlich would make a donation to the orphan asylum. This wedding must have been a sad and sickening scene to the old couple. They were infirm, tottering on the brink of the grave, in the midst of a scene to them so strange, and such a contrast to anything to which they had been used; and they must have felt as intruders, amid the gaieties and festivities, the drinking and feasting, the toasts and speeches. In June following the wedding in January, Mrs. Uhlich died; in July, TJhlich made his will, substantially like the subsequent disposition of his estate, and was carried to Muhlke’s house for the purpose; and in September the several deeds were executed, by virtue of which the complainant received only about sixty thousand dollars of this immense estate, and his children were wholly disregarded, and the agent acquired an immense fortune. At this time, TJhlich was almost helpless. Twice he had to be asked before he made any attempt to make his mark to his' signature, and was assisted for fear he would fall. There is something suspicious about the deeds themselves. Those from Uhlich to his sons, Ernst and August, were in consideration of “ love and affection,” and designated them as “sons of Carl G. Uhlich,” while the deed to Henry .did not recognize him as a son, but was made as to a stranger. This old man, imbued, we may hope, with the spirit of Christian charity, with some lingering affection for his son Henry; deprived of the light of heaven, and no longer cheered by smiles nor intimidated by frowns, and soon to face a future fearful to one with anger and passion in his heart, could not have made this distinction between those of his own blood, if undue influence had not been exercised over him. Another singular fact should be mentioned in this connection. For years prior to the commencement of the agency, Henry had assisted his father, and been loved and trusted by him. The estrangement commenced about the beginning of the agency, and increased with the increase of confidence in the agent. But even concede that Henry was ingrate and undutiful, this could not have destroyed all love and affection for his children. They, at least, were innocent. They loved their grandfather; and he always, to his death, manifested for and towards them the utmost fondness and attachment. Why were they disinherited ? Why were they not sharers in this great wealth ? Muhlke can, perhaps, explain the strange and unnatural act which resulted in their deprivation. I shall not attempt an answer. I must now, as briefly as I can, notice the law as laid down in the opinion of the court. It is conceded that, at the time ,of the. execution of the deeds, the grantee sustained to the grantor the relation of confidential agent and adviser. The court then proceeds to combat an ideal position—that the deeds are ipso facto void—a position never assumed by the counsel for the complainant, as I understand their argument. A very proper stricture is then made upon any attempt to deprive a man of the right to bestow a gift in remuneration of important services; for it is said that “ kindness and friendship to the distressed would then be under a legal ban.” There is, and should be, no rule of law to check the growth of the kindlier feelings of our nature; to prevent the bestowal of gifts as a reward of merit or a manifestation of friendship; or to trammel the free and voluntary disposition of property. The suspicion of the law, however, is always excited when a gift, greatly disproportionate to services rendered, is made to a fiduciary. Courts then assume jurisdiction to examine the case and give relief, “ not for the purpose of infringing the right of alienation, but to secure the full and uninfluenced enjoyment of it.” The court then announces the rule of law to be, that the party assailing a deed executed when the fiduciary relation exists, must prove that the fiduciary abused the confidence reposed in him, and took advantage of the relation, and until this is done, the fiduciary is relieved of any explanation. The following is the language used: “ It is difficult, at all times, to prove a negative—to prove that a grantee, standing in this (fiduciary) relation, did not use the influence he possesed over the grantor to induce the deed—that he did not abuse the confidence reposed in him. Nor does the rule of law require it.” Again, it is said: “ A gift by one to another, who has been for many years his confidential agent and adviser, is valid, unless the party who seeks to set it aside can show that some advantage was taken by the agent of the relation in which he stood.” . I can not yield my assent to this as the rule of law, so inconsistent as I regard it with justice and general public policy. When the relation of agency and active confidence was so fully proved, the presumptions of law were against the fairness of the transaction, and the burden of proof was on the agent to explain and rebut the presumptions. It then became a case of constructive fraud. Constructive frauds include acts which, though not originating in any actual evil intent, tend to impose upon, deceive and mislead. They will .arise out of a fiduciary relation, Avhich is watched with peculiar jealousy, for it affords the poAver and the means of exercising undue influence. The object of the laAV is to preserve from temptation, and to deprive acts performed while the relation exists of all legal protection, unless they are fair and pure and above the reach of suspicion. The principle stands independent of any indicia of positive fraud, and relief will often be given in such cases, in which, but for the relation, there Avould be no interference. “ The burden of proof lies, in all cases, upon the party Avho fills the position of active confidence, to shoAV that the transaction has been fair.” Kerr on Fraud, Ed. 1872, 151. The same Avriter says, on page 386 : “Upon the same principle, if it appear that a fiduciary or confidential relation exist betAveen the parties to a transaction, or if it be established by evidence that one of the parties possessed a poAver of influence over the other, the burthen of proof lies upon the party filling the relation of actiA'e confidence or possessing the power of influence, as the case may be, to establish, beyond all reasonable doubt, the perfect fairness and honesty of the transaction.” The laAV further requires that the fiduciary must show that the parties were substantially at arm’s length and upon an equal footing; that the donor had competent and independent advice; that his conduct Avas not the result of the influences caused by the relation, and that he acted voluntarily, deliberately and advisedly. Has the agent complied Avith the requirements of the laAV ? I think not. There Avas no indejiendent and disinterested adviser. The counsel Avho prepared the seA'eral deeds and assisted in their execution, Avere the counsel of the donee and not of the donor. The Avife AAras no competent adviser, in the eye of the laAV. She Avas under the same influence as the husband. Neither Avas the feeble and aged man upon an equal footing with the skilled agent, who was, in the language of Harwell, “ a good business man and had succeeded in everything which he had undertaken,” and who had a temptation before him which only true virtue could resist. I have quoted from the same author referred to in the opinion, and it seems to me that the principle contained in the quotations is a plain one, simply expressed and directly applicable to the facts of this case. I shall proceed to refer to some of the same adjudged cases, which, it is said, are unlike this case in its important features. While the facts may be unlike, the broad, comprehensive principle in all the cases is identical with the citations from Kerr. In Gibson v. Jeyes, 6 Ves. Jr. 266, the relation of attorney and client existed. Lord Eldon said the parties might contract, but that it resulted from the rule of the court that the whole onus of the case was thrown upon the attorney. He then said: "It is asked, where is that rule to be found? I answer, in that great rule of the court, that he who bargains in matter of advantage with a person placing confidence in him, is bound to show that a reasonable use has been made of that confidence—a rule applying to trustees, attorneys or anyone else.” In Billage v. Lauthee, 9 Hare, 534, the Vice Chancellor said: “ Where a gift is set up between parties standing in a confidential relation, the onus of establishing it by proof rests upon the party who has received the gift.” In another part of the same opinion it is said: "Ho part of the jurisdiction of a court is more useful than that which it exercises in watching and controlling transactions between persons standing in a relation of confidence to each other. The jurisdiction is founded on the principle of correcting abuses of confidence, and ought to be applied, whatever may be the nature of the confidence reposed or the relation of the parties between whom it has subsisted.” In Harrison v. Guest, 6 Gex, Mac. & Gordon, 424, the same general principle is asserted that, whenever the fiduciary relation subsists between vendor and purchaser, the burden of proof is on- the party who sets up the transaction against the person whom he should protect. In Cooke v. Lamotle, 15 Beavan, 239, Sir J. Romilly, in speaking of the confidential relation, said: “The rule is, where these relations exist, by means of which a person is able to exercise a dominion over another, the court will annul the transaction, unless the person taking the benefit can show that the transaction was a righteous one.” Apply this rule to Muhlke, and it is a just one; and I am afraid that he would never succeed in proving the righteousness of the transactions with Uhlich. In Griffiths v. Robins, 3 Madd. 191, there was no technical fiduciary relation, yet a deed of gift was set aside, because the donor, an old person, jilaced confidence in the donee, and the latter did not show that the deed was the result of free will. In McCormick v. Malin, 5 Blackf. 509, there was no formal relation of principal and agent, but confidence was reposed, and the court say: “In the technical relations, such as principal and agent, client and attorney, etc., equity implies a confidence; and in all contracts between them, to which the confidence extends, requires of the party in whom the trust is reposed the highest degree of good faith. On him rests the duty off proving that the contract is in every respect ffair and equitable. If he fails in this, it is a constructive fraud,” and the contract must be held invalid. In a recent case in Missouri (Cadwallader v. West), the principles of law governing cases of this character was fully and elaborately discussed. The suit was brought by the heirs of Cadwallader, deceased, to set aside a deed alleged to have been obtained by undue influence. The relation of medical adviser and patient existed. Cadwallader was an old bachelor, and Dr. West had resided in the same house with him for thirteen years. There was no proof of any active influence, and the consideration consisted of ordinary medical services, Supervision of the property and kind care of the deceased. The value of the property Avas about fifteen thousand dollars, and the proof showed kindness and attention on the part of the donee. The court held that the law presumed the deed to be the result of undue influence, emanating from the younger and stronger party; that it Avas prima facie void, and could not be sustained as a gift, on account , of the relation of confidence. . » This court, in its opinion, refer to the case of Butler v. Haskell, 4 Dessaussure, 651, and deny the principle asserted in it that an agent is legally incapacitated to purchase the estate Avhich is the subject of the agency. Yet this court said iii Dennis v. McCagg, 32 Ill. 429, that an agent “was disabled from dealing in the matter of his agency.” In Butler v. Haskell the relation Avas principal and agent, and the rule declared was, that Avhere a great advantage is gained by the agent from the principal, the agent must prove the transaction perfectly fair and pure. In Ladd v. Grove, 33 Maryland, 188, it was held that a gift obtained by a person sustaining a confidential relation to the donor, is prima facie A’oid, and that the burden of proof is upon the donee to establish affirmatively that the act Avas the free and unbiased Avill of the donor. Greenfield’s Estate, 14 Penn. Stat. 489, is a very interesting case, in its facts as well as in the clearness of the laAV announced.. The court declared that Avhen the confidence Avas established, and the benefit to the beneficiary, then arose a case of constructive fraud; and this peculiarity, Avithdrawing it from the operation of ordinary rules, throws upon the beneficiaries the duty of shoAving expressly that the arrangement was fair and conscientious, and beyond the reach' even of suspicion. I think the principles which underlie this case, as developed by the facts, have been fully heretofore settled by this court. I shall only refer to one case and the cases therein cited— Dennis v. McCagg, supra. In that case the relation of principal and agent existed, and the rule is declared as well established, “that trustees and others, sustaining a fiduciary and confidential relation, can not deal on their own account with the thing or the persons falling within that trust or relationship. The- temptation of self-interest is too powerful and insinuating to be trusted; and it must -be removed by taking away the right to hold the property purchased.” How applicable is the language to the facts of this case! Rarely, if ever, has anyone possessed the confidence which Muhlke had. Rarely, if ever, has anyone been allured by so great temptation. Apply the rule, and remove the temptation for the benefit of him and others in the future. In its opinion, the court seem inclined to draw a distinction between the relation of principal and agent on the one hand, and attorney and client, and trustee and cestui que trust on the other. While some distinction is preserved in some of the adjudged cases—regarding these relations abstractly—there is no reason for the distinction in this case. Muhlke was not only sole agent, but was relied on as an intimate friend; was quasi spiritual adviser; a confidant of family secrets, and was regarded with adoration as “ guardian angel.” 1 In such a case, if ever, the rule of law to which I have adverted should be applied in all its stringency. A court of equity, under the circumstances, "should act without any regard to positive fraud, upon a principle independent of any proof of deceit or imposition—a principle arising out of motives of general public policy, and for the protection of weakness and imbecility, resulting from the infirmities of age and the trustfulness of a second childhood. After the most thorough examination, I have not found a single case—save the opinion in this case—in which, where such unbounded confidence existed, a similar rule has been recognized. In cases of trifling benefits or gifts bestowed somewhat commensurate with the services rendered or the friendship given, there would not be the same ground for interference, upon proof of the mere fact of the confidential relation. The strong presumption of unfairness or undue influence might not then arise. But when so large an estate is almost given away, and the ties of nature are severed, suspicion of wrong can no longer sleep; and when the donor is an infirm and blind old man, confiding as a child, the suspicion is strengthened into absolute conviction. Another fact should be considered: the inadequacy of the consideration. The deeds to the agent import a consideration, when in fact there was none except the services rendered. The answer sets up the conveyance as a gift. This creates a suspicion, but I shall not pursue the question thus presented. The services constituted a grossly inadequate consideration, such as shocks the mind and furnishes a strong presumption that undue advantage had been taken, when we consider the weakness and age of the grantor. This presumption the purchaser should remove by proof. Butler v. Haskell, supra; Cadwallader v. West, supra. I think the inadequacy was so gross as, in the language of Lord Eldon, in Coles v. Trecothick, 9 Ves. Jr. 234, to “ shock the conscience” and is evidence of fraud. Morse v. Royal, 12 Ves. 355. There is one other fact connected with this transaction to which reference ought not to be omitted, and ivhich adds to the bad faith of the arrangement of September, 1867. At the date of the deed, in 1865, Muhlke and Uhlich entered into a solemn, written agreement, and in consideration of the deed then made, and as full compensation for all past and future services during the life of Uhlich, and for acting as executor in the management of the jiroperty after his death, the agent covenanted to accept the deed. In a little over two years he violated this solemn covenant, and quadrupled his compensation. If the first transaction was fair, justice would say that the agent was estopped; but he could not withstand the temptation, and grasped the greater gain, which his relation enabled him to achieve. I think that the agent has wholly failed to remove the presumptions of the law, and show the transactions fair, pure, conscientious, equitable and to be the result of the free and unbiased will of the donor. I am, therefore, of opinion that the whole arrangement is invalid. Is the complainant estopped from invoking the aid of equity? He should not be debarred the relief prayed for, on account of the acceptance of the deed from his father and the execution of the deed to his brother and Huh Ike. The transaction of September, 1867, was an entirety. Fraud taints the whole of it. In ordinary cases, equity will undo the whole transaction, and place the parties in their former situation. Danberry v. Cockburn, 1 Meriv. 640. When the deeds to the agent are void, the other instruments forming a part of the scheme are likewise impeached. They emanated from the same brain; were nurtured and produced under the same influences; were for the same illegal purpose—to grasp possession of the estate. It can not be said that Henry knew the intent, object and effect of the deeds. He requested permission to take them, examine them and consult a lawyer. This reasonable request was refused; and Smith, the attorney of the agent, said to him : “You had better sign; if you do not sign to-day, you shall have nothing.” It is true, the deeds were read to him, and he delayed three days before signing; but the mere reading, under the circumstances, was not sufficient. He was an unprofessional man, and the proof should be satisfactory that the nature, effect and contents of the deeds were explained to and perfectly understood by him. Kerr,on Fraud, 387. Besides, Henry was in the presence of a father, prejudiced against him—it may be justly—and of others who desired and were laboring for his disinherison. He was not informed of the arrangement. The plan was concealed fro» him. Here was a family settlement, as it is termed, and he, as- one of the family, had not the information upon which to' aet advisedly and deliberately. An estoppel is not favored in law, and might properly be sustained to prevent the perpetration of a fraud, but not to encourage a fraud. There should be no confirmation of a transaction so inconsistent with justice, so unnatural and so presumptive o.f fraud. If so, it would be a ratification of an act which should- never have been performed. I think the decree should be reversed, and the relief asked granted.