Daniels v. Benedict

97 F. 367, 38 C.C.A. 592, 1899 U.S. App. LEXIS 2604
CourtCourt of Appeals for the Eighth Circuit
DecidedOctober 16, 1899
DocketNo. 1,206
StatusPublished
Cited by38 cases

This text of 97 F. 367 (Daniels v. Benedict) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Daniels v. Benedict, 97 F. 367, 38 C.C.A. 592, 1899 U.S. App. LEXIS 2604 (8th Cir. 1899).

Opinion

SANBORN, Circuit Judge.

This is a suit by a divorced wife to recover from the devisees under the will of her former husband one-half of the property of which he died seised. Under the statutes of Colorado, one-half of the real and personal property of a deceased husband and father descends to his widow, and the other half to his surviving children. The husband may not take away from his wife her share of his estate by a will, nor can she deprive herself of her right to claim this share by consenting before the death of her husband to a will which bequeaths it elsewhere. Mills’ Ann. St. Colo. §§ 1524, 3011. The appellant, Iilyon B. Daniels, exhibited her hill in equity in this case to set aside her divorce, for fraud, and to recover one-half of the estate which her deceased husband possessed when he died. It was met by an answer which denied the fraud in the procurement of the divorce, by a plea of an agreement of separation by which she covenanted never to claim any interest in her husband’s estate, and by a plea of the statute of limitations. A general replication was filed to the answer and to the pleas, and upon the final hearing of the case the circuit court held that the agreement of separation and the decree of divorce constituted good defenses to the suit, and dismissed the bill. This decree is challenged by the appeal, and we will first consider the objections of the appellant to the sufficiency of the defense based upon the agreement of separation.

It is said that this contract constitutes no defense to this suit, because the burden was upon the appellees to show, by evidence outside of the agreement itself, that its terms were equitable, just, and fair to the appellant, in view of the value of the property of her husband, and of all the surrounding circumstances when the contract was made, and that they neither pleaded nor proved any facts which sustained this burden. To this contention there are two answers. They are that no such burden rested upon the appellees, and that by the course of her pleading the appellant conceded this to be the law. The argument of counsel for appellant in support of their proposition is that husband and wife occupy a fiduciary relation to each, other, and that contracts between them are consequently presumptively void until they are proved to be valid. If all contracts between those in confidential relations to each other were presumptively fraudulent and void, the conclusion might be justified, but they are not, and hence the argument fails. Borne contracts between parties in fiduciary relations to each other are valid, and some are voidable or void, and some contracts between strangers are valid, and some are void; so that no definite conclusion can be drawn as to the validity or invalidity of a contract from the fact that the parties to it occupied a fiduciary relation to each other. It will not do to say that all contracts between husbands and wives, between fathers and daughters, between principals and agents, and between others in similar relations, are ineffectual until proved aliunde to be just and fair, because the effect of such a rule would be to pra.ctically disable parties occupying such relations from making contracts with each other. Agreements between parties in these relations are either presumptively valid or pre [370]*370sumptively void. If the former, then the power of such parties to bargain, trade, and agree with each other is plenary. If the latter, then their power to contract with each other is practically destroyed. Wo principle of equity, no rule of law or of morals, which occurs to us, requires a decision that the confidential and fiduciary relations of life disable all who enter them from making agreements with each other, or stamp their mutual contracts with the presumption of fraud or invalidity. Such a presumption is unfounded in fact, and runs counter to the common knowledge and experience of men. Cases may indeed be found in the books in which a husband, a wife, a son, or a daughter has become so lost to all considerations of honesty, honor, duty, or affection as to take an unconscionable advantage of a wife, a husband, or an. infirm father by means of a contract. But these cases are rare exceptions to the general rule of life and of business. The vast majority of customary contracts between members of families, between principals and agents, between trustees and cestuis que trustent, and between others in like relations, by which property is divided, transferred, sold, and conveyed, and the various business relations -of the parties are fixed, are not read in the books, because they ar« made in good faith, are fair and equitable, and are performed with satisfaction and pleasure. Men are at least as honest, just, and liberal in their contracts with their wives, with their children, and with others to whom they sustain confidential relations, as they are in their agreements with strangers. We do not question the settled rule that when one takes advantage of a fiduciary relation to make a contract with a person who trusts him, which the latter alleges to be unjust or inequitable, the charge will be investigated by the courts with searching scrutiny', that they will guard the rights of the confiding with jealous care, and that they will refuse to enforce the agreement if the proof sustains the charge. But they will not stamp the great multitude of fair contracts that are made between those in confidential relations with each other with the presumption of fraud and invalidity, and thus inject doubt and suspicion into the dearest and most intimate relations of life, because an occasional husband, wife, son, or daughter proves faithless, unscrupulous, or dishonest. A contract may indeed be so unjust, inequitable, or inconsistent with the duty of a trustee, on its face, — as when an agent to sell makes a contract with himself as purchaser, or a trustee obtains an inequitable agreement with his cestui que trust, — that it is presumptively voidable or void. But the general rule is that the existence of a fiduciary relation between the parties to an agreement does not disable them from making the contract, and does not render their agreement presumptively fraudulent or void. Contracts bétween parties in confidential relations which do not themselves disclose any injustice or inequity are presumed to be valid until they are proved to be fraudulent or unfair, and they are nof presumed to be fraudulent and void until they are proved to be just and equitable.

We have not failed to carefully peruse and consider, before reaching this conclusion, the authorities which have been cited by coun[371]*371sel for the appellant in support of their proposition that if an agreement of separation is relied on in pleading, either as a cause of action or as a matter in defense, the pleading must contain averments which show the contract to have been fair, just, and reasonable to the wife, and that a plea of the naked contract is insufficient: Garver v. Miller, 16 Ohio St. 528; Ireland v. Ireland, 43 N. J. Eq. 311, 12 Atl. 184; Boyd v. De La Montagnie, 73 N. Y. 498; Pierce v. Pierce, 71 N. Y. 154; Graham v. Graham, 143 N. Y. 573, 38 N. E. 722; Rogers v. Marshall (C. C.) 13 Fed. 60. But all these cases, except Garver v. Miller and Ireland v. Ireland, were decisions after the final hearing, in which it was affirmatively found that the agreements were obtained by fraudulent representations, and hence the general statements in the opinions in those cases that the burden was on him who would sustain them were mere obiter dicta. The cases of Garver v. Miller and Ireland v.

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Bluebook (online)
97 F. 367, 38 C.C.A. 592, 1899 U.S. App. LEXIS 2604, Counsel Stack Legal Research, https://law.counselstack.com/opinion/daniels-v-benedict-ca8-1899.