Court Opinion

ID: 5462135
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:39:43.812831+00
Date Added: 2024-06-11T08:32:56.068796
License: Public Domain

By the Court, James, J.
It is a well settled rule of equity jurisprudence, that all gifts, contracts, or benefits, from a principal to one occupying a fiduciary or confidential ^relation to him, are constructively fraudulent and void. The court, in such cases, acts upon the principle “ that if confidence is reposed, it must be faithfully acted upon; if influence is acquired, it must be kept free from the taint of selfish interest, and cunning and overreaching bargains.” “ In this class of cases, there is often found some inter-mixture of deceit, imposition or overreaching advantage, or other mark of positive or direct fraud. But the principle upon which courts of equity act in regard thereto, stands, independent of any such ingredient, upon a motive of general public policy.”
Among the relations subject to the foregoing rule are those of parent and child, attorney and client, and principal and agent. (Story’s Eq. Juris. §§ 309 to 315.) Story says: “In all eases of this sort, the principal contracts for the aid and benefit of the skill and judgment of the agent, and the habitual confidence reposed in the latter makes all his acts and statements possess a commanding influence with his principal. It is therefore for the common security of all mankind that gifts procured by agents, and purchases made by them, from their principals, should be scrutinized with a close and vigilant suspicion.” So of notes, bills, contracts, releases and obligations. ,
Indeed, agents are not permitted to deal validly with their principals in any case, except upon showing the most entire good faith, a full disclosure of all the facts and circumstances attending the transaction, and an absence of all undue influence or imposition. Transactions which would be held unobjectionable between other parties, are often declared void, if between persons occupying confidential relations.
In the present case the relation of principal and agent existed between the parties to the note, the receipt and *470the contract, strengthened by the further and other relation of parent and child; the parent was old and feeble; she was at least seventy-seven years of age when the first instrument bears date; she lived with her son; the instruments were in his handwriting; they were all for his benefit; no object, benefit or advantage appearing to the other side.
[Si. Lawbence GenebAl Teem,
October 2, 1866.
There is a still further suspicious circumstance; the note was dated May 1, 1857, the agreement to pay for board December 9, a will made by the mother giving her property to the respondent and his brother Daniel, December 12, 1857, and followed by the receipt dated September 14, 1858. This last instrument so diminished the assets that the note and claim for board swallowed up the entire estate.
Upon the hearing before the surrogate, the respondent barely proved the signature of the testatrix to the several instruments in question. He offered no evidence of the facts and circumstances under which they were made, of their consideration, their object and purpose, their freedom from undue influence or imposition ; or of good faith.
But we do not place our decision in this case upon the ground of actual fraud. We only go so far-as to say that the respondent occupied a confidential relation to the testatrix at the time the aforesaid instruments purport to be executed; that because of that relation they were presumptively fraudulent, and void as to her or her representatives, which presumption could only be overcome by actual proof; that as no such proof was made or offered, the presumption continued, and that presumption should have caused the rejection of said items. In this ' particular the surrogate erred, and his decree6 should be reversed, and the cause remitted for rehearing; and the costs of this appeal should be paid by the executor in person.
Bodies, Jemes, Rosehrems and. Rotter, Justices.]