Post v. Hagan

The opinion of the court was delivered by Garrison, J. To the facts found, and found correctly, as we think, by the learned vice-chancellor, he applied the rule as to undue influence laid down, in Haydock v. Haydock’s Executors, 34 N. J. Eq. (7 Stew.) 570, whereas in our opinion he should have applied the rule as to independent advice laid down in this court in Slack v. Rees, 66 N. J. Eq. (21 Dick.) 477. Both cases were decided by this court, and the essential difference between them is that the rule of Slack v. Bees has specific application to cases in which the gift if valid has the effect of stripping the donor of all or practically all of his property, whereas the rule followed in Haydock v. Haydock applies generally to gifts that bear no such relation to the donor’s entire estate. Slack v. Rees goes further than Haydock v. Haydock to just the extent required by this additional circumstance that marks the distinction between them. This distinguished circumstance, namely, that a person already aged or infirm or otherwise dependent should give to the one upon whom he thus depends practically his whole living beyond recall, and at the very time when apparently he had most need to retain it, raises in the mind of a chancellor the [243] presumption that the donor may not have appreciated the irrevocable character of his act or that he did not foresee its legal consequences to himself. This .presumption of apparent improvidence gives rise to the special rule followed in Slack v. Bees which may be called ‘the rule of independent advice. By force of this rule, if a person upon whom another has in fact come to be dependent accepts a gift from such dependent person of all of his or her estate, a court of equity, moved by tire apparent improvidence of such a gift, casts upon the donee the burden of showing that the donor had the benefit of proper independent advice. Proper independent advice in this connection means that the donor had the preliminary benefit of conferring fully and privately upon the subject of his intended gift with a person who was not only competent to inform him correctly as to its legal effect, but who was furthermore so disassociated from the interests of the donee as to be in a position to advise with the donor impartially and confidently as to the consequences to himself of his proposed benefaction. The practical distinction between this rule and that applied by the learned vice-chancellor in the present case is so clearly pointed out by Chief-Justice Gfummere in Slack v. Rees that I cannot do better than cite here a pertinent extract from the opinion delivered by him in that ease, the essential facts of which, by the way, were exactly those of the case now before us: “The normal relation of parent and child, as it had existed in earlier years, had been reversed, and the daughter had come to be the guardian of the father. In this situation the law presumes that a gift made by the parent to the child is the product of undue influence, and casts upon the latter the burden of proving the contrary. A decision upon this point in the case, however, is rendered unnecessary, as we conclude that the conveyance must be set aside, because in making it the donor did not have the benefit of competent and independent advice as to its effect. “That the absence of such advice will invalidate a deed of gift, Avhich contains no power of revocation, where a relation of trust and confidence exists between the donor and donee, is not denied, and, indeed, it was so held by the vice-chancellor. [244] He seems to have considered, however, that such relationship was not shown, unless it was made to appear that the donee occupied such a dominant position toward the donor as to raise a presumption that tire latter was without power to assert his will in opposition to that of the donee. But this is not the situation. The rule has a much broader sweep. Its purpose is not so much to afford protection to the donor against the consequences of undue influence exercised over him by the donee as it is to afford him protection against the consequences of voluntary action on his part, induced by the existence of the relationship between them, the effect of which, upon his own interests, he may only partially understand or appreciate.” In an earlier part of the opinion the essential facts referred to were thus stated: “On the day before his death he (the father) executed a deed to his daughter, conveying to her two houses and lots in the city of Trenton. He owned no other real estate, and his personal property was insufficient for the payment of his debts.” That the facts of the present case bring it within the rule of Slack v. Rees, both as to the relationship of the parties and the necessity of independent advice, appears fully from the conclu.sions of the vice-chancellor. That the improvidence of the gift was apparent even to the recipient of it appears in certain testimony given by the donee and not cited by the vice-chancellor. I refer to the answer given by the donee to a question put to her by the vice-chancellor, after the witness had testified that her mother had told her to get the deeds recorded, but that she had not done so. The question was why she had not'done so, to which her answer was: “Because I have heart trouble and I never expected my mother to die, and if I should die before my mother my children would have it, the property, and what would my mother have had ? She would not have had anything.” This naive answer discloses at once the precise situation to which the rule of Slack v. Rees applies, as well as the reason for the rule and the necessity for its application. That the donor in the present case ought to have had independent advice must be taken to be entirely established. That she did not have it is also clearly shown. Judge Paxton, the lawyer who drew the deeds and took the donor’s acknowledg [245] merits, was employed for that purpose by the donee and appeared for her in the court below. She called upon him with the old deeds, from which he was instructed to draw two new deeds, in all respects similar to the old ones saving as to the names of grantor and grantee, and when he had the deeds ready he was to attend upon the donor and have them executed. His instructions were both limited and explicit. These instructions he carried out. He was in no .sense the adviser of the donor and at no time acted in that capacity. His onty remark to the donor, as I recall it, was that cited by the vice-chancellor, viz., that he reminded her that she had a son. The consequences to the donor’s son of the disposition she was making of her property, and her repeated expressions of a desire to- provide for him or his family, are not material, in the present aspect of the case, save as they throw light upon the donor’s lack of knowledge and her need of advice. It may be true, as the vice-chancellor suspects, that if she had known of such a thing as a spendthrift trust she would have made such a disposition of part of her estate; it is equally probable that if she had understood the doctrine of precatory words she might have impressed such a trust in favor of her son upon the conveyances made to her daughter-—indeed, in a vague way, she seemed to have thought that she had done so. However well founded in the testimony these surmises as to the donor’s intentions or desires may be, they do no more than emphasize her need of counsel, not with respect to the protection of her son, but of herself. The fundamental error of the learned vice-chancellor as to the rule to be applied by him to such a case appears from the concluding words of his opinion, in which, in summarizing the case before him, he says: “We are not inquiring whether if Mrs. Telfer had been properly advised she would have made these conveyances. The sole question is, did Mrs. Telfer aGt voluntarily and intelligently in making these conveyances, or were they obtained from her by fraud or undue influence?” This is precisely the error pointed out in Slack v. Rees, in the citation above quoted. For the reasons there stated, the question considered by the vice-chancellor as the sole question was not the question upon [246] which the case turned, while the question that he did not consider was not only an essential inquiry in the cause, but under Slack v. Reas was absolutely dispositive of it in favor of the appellant. The decree of the court of chancery will be reversed, and the record remitted with instructions to that court to enrer a decree setting aside the conveyances in question. For affirmance—None. For reversal—Ti-ie Chief-Justice, Garrison, Fort, Garretson, Hendrickson, Pitney, Swayze, Reed, Bogert, Vre-DENBÜRGIÍ, VROOM, GREEN, GRAY, DlLL—14.