Kosakowski v. Bagdon

16 N.E.2d 745, 369 Ill. 252
Illinois Supreme Court·Decided June 20, 1938·No. No. 24472. Reversed and remanded.·Published·Cited by 20 cases

Opinions

Mr. Justice Orr

delivered the opinion of the court.

Martha Kosakowski, by her amended complaint in equity in the circuit court of Lake county, sought to set aside a deed given by her mother, Eleanor Kosakowski, to Walter Bagdon, her mother’s second husband, and to recover her share of her mother’s estate. She claimed that the deed was procured by the exercise of undue influence upon her mother by Bagdon while they were engaged to be married. Bag-don’s answer denied generally the allegations of the complaint, but did not deny that they were engaged to marry at the time the deed was executed and delivered to him. His counter-claim also asserted a valuable consideration of $4500 was paid to his fiance prior to the conveyance. The master found the issues for appellant and recommended a decree in her favor, but the chancellor set aside the master’s recommendation and entered a decree dismissing the complaint for want of equity. Because a freehold is involved, the appeal has been brought directly to this court.

On August 8, 1932, a check for $6898.08 was received by appellant and her mother, as a result of a suit for damages on account of the death of the appellant’s father. Approximately $2300 of this sum went to the mother, who for some six months previously had been engaged to marry Bagdon. On August 17, 1932, before her marriage to him, Mrs. Kosakowski conveyed the residence property in question, valued at $5800, to Bagdon, for the stated consideration of $10. Appellant’s mother and Bagdon were married ten days later, August 27, 1932, and lived together until the mother’s death, May 14, 1933, leaving appellant and appellee as her only heirs. The bill alleged that upon her mother’s death, appellant became seized in fee of the real estate, subject to Bagdon’s statutory rights as surviving spouse.

The questions are: (1) Whether the undisputed evidence that Mrs. Kosakowski conveyed the property to Bag-don, during the existence between them of an engagement to marry, for a nominal consideration of $10, was sufficient to place the burden of proof on Bagdon to show the fairness of the transaction; and, if so, (2) whether such proof was made by him.

The law seems well settled in this State that where relations of trust and confidence exist between parties to a transaction and the party receiving the transfer is thereby benefited, the court will indulge in the presumption that the party making the transfer was unduly influenced, and such presumption will prevail until it is rebutted by the party benefited. (Dowie v. Driscoll, 203 Ill. 480, and many cases cited.) Courts of equity have carefully refrained from defining the particular instances of fiduciary relations in such manner that other and perhaps new cases might be excluded. An overwhelming weight of authority sustains the principle and extends it to every possible case in which a fiduciary relation exists as a fact, in which there is confidence reposed on one side and the resulting superiority and influence on the other. (Beach v. Wilton, 244 Ill. 413.) The doctrine repeatedly announced is that courts of equity “will scrutinize with the most jealous vigilance” transactions between parties occupying fiduciary relations toward each other, (Casey v. Casey, 14 Ill. 112,) and that the burden of proof is on the beneficiary, in such a case, to establish the fairness of the transaction, and to show that it did not proceed from undue influence. (Jennings v. McConnel, 17 Ill. 148; Zeigler v. Hughes, 55 id. 288; Ward v. Armstrong, 84 id. 151; Wickiser v. Cook, 85 id. 68.) Where a fiduciary relation exists, the person obtaining the advantage must “vindicate the bargain or gift from any shadow of suspicion” and “show that it was perfectly fair and reasonable in every respect.” (Jones v. Lloyd, 117 Ill. 597.) We have often held that where a fiduciary relation exists and gives cause for suspicion, it is not necessary to prove actual fraud in order to vitiate a questioned action. Mors v. Peterson, 261 Ill. 532; Witkowsky v. Affeld, 283 id. 557; Feeney v. Runyan, 316 id. 246; Duncan v. Dazey, 318 id. 500; McCord v. Roberts, 334 id. 233; Eichhorst v. Eichhorst, 338 id. 185.

The circumstances here do not involve an antenuptial contract to do something of financial benefit to one of the parties after marriage, but, of equal or greater significance in the present case, they involve an antenuptial transaction carried into effect before marriage, by which one of the parties may have benefited at the expense of the other. Such relation between the parties to a marriage engagement is a confidential and fiduciary one, requiring just and fair dealing. (Mann v. Mann, 270 Ill. 83.) If an engagement to marry exists and is proved, that fact creates a confidential relation between the parties. (Yockey v. Marion, 269 Ill. 342; Debolt v. Blackburn, 328 id. 420; Geiger v. Merle, 360 id. 497.) In the recent case of Megginson v. Megginson, 367 Ill. 168, we said: “Megginson and plaintiff were engaged to be married at the time the contract was signed. A confidential relationship, therefore, existed between them and they were bound to act fairly and in good faith in their dealings with each other.” The evidence is undisputed that Mrs. Kosakowski and Bagdon were engaged to marry each other at the time she made the deed, and they had been so engaged for many months. From the authorities cited, it seems clear that at the time the deed was executed and delivered, a fiduciary and confidential relationship existed between them. The burden, therefore, rested upon Bagdon to show clearly and conclusively that he acted in good faith and did not betray the confidence reposed in him. Suchy v. Hajicek, 364 Ill. 502.

The record shows that appellant’s mother received the money on account of her first husband’s death on August 8, 1932; she made the deed to Bagdon nine days later, August 17, and ten days following this, August 27, they were married. Appellant testified that on receipt of the $2300 above mentioned, her mother, on August 12, 1932, paid the balance due of $500 on a second mortgage against the real estate in question. She further stated that she left her mother’s home two days after the latter’s marriage. There is no showing as to what became of the remaining $1800 which her mother had received less than three weeks before her marriage. Bagdon said he did not receive any part of it. Evidence was produced to show that appellant’s mother did not have any money or bank account when she died. In explanation of the deed, Bagdon offered testimony to the effect that he paid $3200 cash, canceled an indebtedness of $1300 owing to him by his fiancé, and assumed a $2000 mortgage as further consideration for the property conveyed to him. Two witnesses testified that Mrs. Kosakowski went unaccompanied to a real estate man named Schwartz and that, at her direction, the latter prepared the deed which she executed. She did not request any advice of Schwartz and received none, and he did not know nor was he informed of the identity of the grantee or any of the other details. The witness, Sutkus, testified he told her not to deliver the deed before she got her money and that she later told him she had received payment. He did not discuss the propriety of the transaction with her or advise her in any other particular. There was also testimony from other witnesses that, after her marriage, Mrs. Bagdon had made statements to the effect that she was glad the property was sold and that she was satisfied with the transaction.

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Kosakowski v. Bagdon, 16 N.E.2d 745, 369 Ill. 252 (Ill. 1938).

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