Smith v. Smith

29 App. D.C. 408, 1907 U.S. App. LEXIS 5468

• Court: District of Columbia Court of Appeals
• Decided: April 2, 1907
• Docket: No. 1731
• Status: Published

Opinion

Mr. Justice Robb

delivered the opinion of the Court:

The only question necessary to determine is whether Henry S. Smith, at the time of the execution of the papers in question, possessed sufficient intelligence to understand fully the nature and effect of each transaction, and, if so, whether the papers were executed under such circumstances as warrant their being upheld, or as would justify the interference of equity for their cancelation. Allore v. Jewell, 94 U. S. 508, 24 L. ed. 262.

This court in Moran v. Sullivan, 12 App. D. C. 137, through Mr. Justice Morris, stated that it is “well settled, by repeated decisions of courts of equity in England and America, that when, at the time of any given transaction, a fiduciary or confidential relation is shown to have existed between the parties, and the opportunity for the exercise of undue influence is shown to have been present in the relation and circumstances of the parties, and the one in the superior position of being able to exercise the influence has in fact procured a benefit to himself from the other, a court of equity will not allow the benefit to stand without clear and satisfactory proof of the entire fairness of the transaction. 2 Pom. Eq. Jur. sec. 956; 27 Am. & Eng. Enc. Law, title Undue Influence, where the authorities on the subject are cited.”

And in Holtzman v. Linton, 27 App. D. C. 241, 256, Mr. Chief Justice Shepard observed: “It must be remembered that, when fiduciary relations exist between grantor and grantee, the fiduciary is under a plain moral duty not to put himself in any situation which would tend to excite a conflict between his self-interest and his duty to his client, principal, or obligee, of whatsoever nature. Michoud v. Girod, 4 How. 503, 554, 11 L. ed. 1076, 1099; 2 Pom. Eq. Jur. sec. 956.”

In the present case it is clear that both incapacity and fiduciary relationship are established.

It is, we think, equally clear that this son in the several transactions hereinbefore detailed, which he had with his father and which the court set aside, was acting primarily in his own, and not in his father’s, interests. The record discloses that in each transaction the son benefited, but it fails to disclose wherein the father received any benefit from either transaction. The son absorbed the father’s interest in the dairy business and in the piece of real estate, and in return surrendered certain notes which he says his father had theretofore given him for borrowed money. But in the last transaction he accepted another note from his father for $100 when, according to his attorney’s statement, only- $35.64 was due him.

We conclude, therefore, that the mental condition of his father at the time of the execution of these papers, the relation he sustained to his father, his lack of candor as a witness, and the suspicious circumstances surrounding each transaction, fully justify the decree of the court below.

The decree entered was right, and will therefore be affirmed, with costs. Affirmed.