JUNE V. WILLIS.

11

serve the property ofthe company for its creditors; and considering that it is the duty of the receivers to. adhere to and comply with the charters and grants to the company by which their franchises and privileges were obtainedjand considering, further, that the aforesaid contract between the said receivers and the Missouri Pacific Railway Company is in violation· of the laws of Texas, and not authorized by the charter of the Texas & Pacific Railway Company, and that the Texas 'fraffic Association may be likewise obnoxious,-an order of the court's own motion will be entered in this cause. directing the receivers to abrogate and annul the said contract with the Missouri Pacific Railway system, so far as it contemplates discrimination against intersecting or connecting lines, and so far as it constitutes or stipulates any combination in the nature of a partnership with the Missouri Pacific Railway system in Texas; and advising the said receivers to withdraw from all connection with the Texas Traffic Association unless they are able to report that, under the rules of said association, they are not required to discriminate in any manner for or against any connecting or intersecting line of railway, or for or against any shipper or the public. This opinion, and the orders herein directed, are not to be c::mstrued as any reflection upon tqe receivers. They received the property of the Texas & Pacific Railway Company, which is a railway system by itself, in a dilapidated condition, with all the complications and entanglements arising from the fact that for years it formed an integral part of the Missouri Pacific Railway system, and their management so far has been so wise and judicious that they retain the full confidence of the court, and merit the wannest approval from all financially interested in the prosperity of the railway.

JUNE fl. WILLIS.

(Oi'l'cuit Oourl, N. D. New York. January 12. 1887.)
FRAUD-CONFIDENTIAL RELATIONS-SUIT TO SET AsIDE CONVEYANCE.

Where the grantor of a deed was at the time of its execution 77 years of age. was worried about business matters in connection with the property conveyed. was in the habit of transacting business through the grantee. who was her favorite nephew, and had her unlimited confidence. and signed the deed without any consideration, on the representation of the grantee that he required some written authority from her to act in certain matters connected with the property, and believed she was merely signing a power of attorney, the deed will be set aside in a suit at the instance of the grantor··

In Equity!

H. D. DcmrlRlly, for complainant.

W. G. Peckham, for defendant

lSee note at end of case.

12

FEDERAL REPORTER.

COXE, J. This is a suit in equity to set aside a deed executed by the plaintiff to the defendant, on the ground of fraud and undue influence, and because of confidential relations existing between the parties. The plaintiff, her sister, and the children of a deceased brother, wElre, on the sixteent.h of December, 1884. the day the deed was executed, entitled each to an undivided one-third interest in a farm situated in North Salem, Westchester county, New York. This farm had been the pr0pertyof John J. June, another brother, who died in February, 1884, leaving a will by virtue of which the plaintiff acquired her interest. At the time of the transaction in question the plaintiff was a maiden lady, 77 years of age. Her property consisted in this interest in her brother's real estate, an unliquidated claim against his estate of about $8,000, and $1,500 in money. She had no other property or other means of support. The defendant was an active business man, in the prime of life. He was the favorite nephew of the plaintiff. For 17 years he had invested what little money she possessed, and had her unlimited confidence. This is conceded" It IS by no means easy to arrive at an accurate estimate of the value of the property conveyed to the defendant. Although the proof regarding itds far from satisfactory, it is thought that it was worth between $2,000 and $3,000; probably not far from $2,500. The estate of .Tohn J. June was in It confused and unsettled condition. The personal property was insufficient to pay the claims against it. The settlement of the estate had perplexed and worried the plaintiff and her sister, Mrs. Margaret J. Willis, the defendant's mother. The two old ladies had lived at the homestead for many years. They hoped to retain possession of the farm, to own it, and to spend their remaining days upon it. To this end their best efforts were directed. Before:it could be accomplished, however, it was necessary to purchase the interest of the children of their deceased brother, and discharge other incumbrances upon the place. This required the command of, at least, $2,000 ready money. How to procure this sum was the problem which confronted and annoyed them. The plaintiff is and was possessed of a perfectly sonnd mind. She is a woman of intelligence, but at the time in question she was feeble in body. She complained frequently of headache, and was worried and nervous about the settlement of the estate. In these circumstances she sought the defendant for counsel and advice. As a resultof several interviews with him, she went, in his company, to White Plains, and signed the deed in question. She testifies that in these intervie.ws he promised to take the place of a lawyer, and act for her as her adviser and friend, but said that it would be impossible to do so intelligently without some written authority from her; that when she signed the deed she supposed it was simply a power of attorney; that she had no idea that she was making an absolute conveyance. After a careful examination of the testimony, t4e conviction cannot be resisted that her contention in this regard is true; that it was not her intention to vest irrevocably in the defendant the title to her property. That a woman nearly 80 years of age, dependent for her support upon

JUNE

17. WILLIS.

13

her own scanty means, should tlills voluntarily and without advantage divest' herself of Hie most valuable sbare of her property not only, but give up the title to the home where she had lived for over 30 years, and around which clustered a multitude of sacred associations, retaining only the right to a precarious residence upon the premises, is hardly credible. What was she to gain? What motive had she for such a course? The deed was without adequate consideration. There is nothing to uphold it. The theory that it was given for past and future services cannot be sustained, in the light of the fact that she was not bound to pay the defendant for .the slight service he had rendered in investing sums for her, from time to time, and the other fact that there was no obligation on his part to render any service in the future. There is nothing in the deed, orin any otller writing, which requires the defendant t<>doanyact or pay any money for her, or on her account. She has given him property worth $2,500,.and has received nothing in return. Sq far .as the written transaction is concerned, he refuse to raise his nriger in her behalf, an.d she will he without remedy,· But even had the ('rmsideriltion suggested by the.defendant been expressed in the deed, or ip ,another writing, it would have been entirely out of proportion to the value of the interest received by him. 1'Q"ot ohly is the plaintiff corroborated by humerous· presumptions,btit many· declarations of the defendant's witnesses tlre hardly compatible with the theory the deed was an absolute one. A forcibleillustration ohbis is found inthe letter of the defendant?s sister, written soon after the deed was executed; says: "John [the defendant] is simply seeing to Fea's [the plaintiff's] affairs, which she says she'cannot do, -that she cannot think. When the thing is settled John gives up, but he could not act 'for her withC>utauthoi'ity." The plaintiff's version of the transaction could hardly have been stated more concisely. It is not at all material what n\tme was given to the paper by the plaintiff. She may have understood that it was a deed. She may have called it a deed. But this matters not, when the testimony clearly infor the purpose of giving the defend.ant dicates that she signed it authority to act in her name, !lnd not to give him an adverse title to the property. The prc;>position, in brief, is this: A· woman nearly 80 years of age, worried,anxiol!s, and in feeble health, seeks a trusted relative and friend, in ;whose good faith she has the most implicit confidence, for sympathy and advice. Her object is to devise some means by which her sister and herself can obtain title to an outstanding interest in the farm which had been her home for many years. A few days elapse, and the adviser and friend appears as the absolute owner of her own terest in the farm. For this he pays nothing. No advantage or benefit with the value of the property, is proved; n0 to her, at all rational motive for her act is suggested. She insists that she did not intend to convey the property absolutely, and had no idea that she was so. A deed given in such circumstances is repugnant to the principles of equity, and cannot be upheld. The plaintiff is entitled to the relief demanded in the

FEDERAL REPORTER.

NOTE. FRAuD-CONFIDENTIAL RELATIONS-UNDUE INFLUENCE. Whenever the relations beare such that the donor or grantor appears to be subject to the control or mfluence of the donee, or ,grantee, 'the' burden is on the latter to show that the traDsac'tionrwas fair and honest, aDd was not procured by undue influence, Dunn v. Dunn, (N, J.) 7 At!. Rep; 842; Whipple v. Barton. (N. H.) 8 At!. Rep. 922: Worrall's Appeal, 29 N. W. Rep. 171; Davis (Pa.) 1 Atl. Rep. 380, and note; Tancre v. Pullman, v. Dean, (Wis.) 26N. W. Rep.737; Samson v. Samson, (Iowa,) 25 N.W. Rep. 233; CrawfOrd v. HQeft, (Mich.) 24 N.W. Rep. 645; Smith v.Smith, (Wis.)19N. W. Rep. 47: Ashton v. Thompson, (Min11.) 18 N. W. Rep. 918: Sprague v. Hall, (Iowa,) 17 N. W. Rep. 743: Thorn Thorn, (Mich.) 16 N. W. :Rep. 324; Hanna v. Wilcox, (Iowa,) 5 N. W. Rep. :717,; NOble'$ Adm'r v. Moses, (Ala.}l South. Rep. 217: and, in the absence ofsnch t)roof of good faith, the transaction will be deemed void, and equity will exercise jurisiliction to set it aside, Dun11 v. Dunn,:(N. J.) 7 Atl. Rep. 842: Munson v. Carter, (Neb.) 27N. W. Rep.208; Davis v. Dean, (Wis.) 26 N. W. Rep. 737; Samson v. Samson, (Iowa,) 25N., W. Rep. 283; Crawford v. Hoeft, (Mich.) 24 N. W. Rep. 645: Sprague v. Hall, (Iowa,) 17N. W. Rep. 743: Thorn v. Thorn, (Mich.) 16 N. W. Rep. 324: Hanna v. Wil· COlt, (Iowa,) aN. W. Rep. 717; Watkins v. Brant, '(Wis.) 1 N. W. Rep. 82. The relief granted ,rests on a general principle, applicable to all relations in which dominion is' eXercised by one person 'over another, Mnns(\n v. Carter, (Neb.) 27 N. W. Rep. 208; Samson v. Samson. (Iowa,) 25N.W, Rep. 233; Ashton v. Thompson, (Minn.) 18N. W. Rep. ,918; whether that dominion arises from the superior knowledge of the matters derived from a fiduciary relation on the or-e side, Dunn v. Dunn. (N. J.) 7 Atl. Rep; 842: Whipple". Barton, (N.H.) 8Atl. Rep. 922; Tancrev. Pullman, (Minn.)29N.W. Rep. 171 : Crawford,v. Hoeft, (Mich.) 24N. W. Rep. 645 j McHarry v. Irvin's Ex'rs, (Ky.) 8 S,W. Rep. 1174; frqrnweakness, dependence, and trust, justifiably reposed on the other, Ikerd v: Beavers,'{lnd.) 7 N. E. Rep. 826: Oakley v.Ritchey, (Iowa,) 28 N. W. Rep. 448; Davis v. Dean, (Wis.) 26 N. W. Rep. 787; from immoral and adulterous relations, Hanna v. ,Wilc(lx'rClowa,),l)N. W. Rep, 717; or from al1Y social or domestic force, though.not sufficient to amount to duress; which controls the free action in the matter, MU11son v. Rep. 208;' Cartel',(Neb.) 27 This t>l'incipleapplies especially to transactions between parents and children, when the child ha,s recently coine of age, or while it is under the constant and immediate influence oithe parent; Ashton v.Thompson, (Minn.) 18 N. W. Rep. 918; Noble's Adm'r v. Moses, (Ala.) c}"South.Rep. 217; or when the cllild orcupies a confidential relation to Samson v. Sams.on, (Iowa,) 25 N. W. Rep. 233: Crawford v. (Mich.) 24 ,N. W. Rep. 645:' Bowe v. Bowe, (Mich.) 8 N. W. 848; and to dealIngs between persons, one' of whom stands, in loco parentis to the bther, Davis v. Dean, (Wis.) 26 N. ,w, Rep. 787' and between attorneys and clients, ;Dunn v. Dunn. (N. J.) 7 Atl. Rep. 842; Whipple v. Barton, (N. H.) 3 Ali. Rep. 922; Tancre v. Pullman, (Minn.) 29 N. W. Rep. In. ", . It is not sufficient to avoid a deed or will that its execution was prpcured by the exercise of honest /lrgument and persuasion, or-an influence fairly and honestly acquired. such as oneinay properly ontain ovei:' another, Sturtevant v. Sturtevallt, (111.) 6 N. E. Rep. 428; :ijl'adfordv. Vinton, (Mi«;h.) 26N. W. Rep. 401 j In re Disbrow, (Mich.) 24 N. ,W. Rep. 624; although such will might not have been made hut for such advice or persuasion, Bradford' v.Vinton, (Mich:) 26 N. W. Rep, 401; In re Disbrow, (Mich.) 24 N. ,W. :Rep. 624 :norisinlportun;ity alone SUfficient, but uudue influence, obtained by importunity, domini()ll over the will of the testator to such an extent as to' destroy his free' agency, is, In re' Disbrow, (Mich.) 24 N. W. Rep. 624; Bledsoe v. Bledsoe, (Ky'.) 18. W. Rep. 10. The influence must be such that the party stan ds in vincuris., Conley, v. Nailor, 6 Sup. Ct. Rep. 1001 ; Bradford v. Vinton, (Mich.) 26 N. W. Rep. 401; Shepardson v. Potter, (Mich.) 18 N. W. Rep. 575; InreCarroll, (WisJ 7 N. W.Rep. 434. " , : ,Undue influence, may be Jound from aU the facts and circumstances surrounding a case, even if there is no positive evidence. Saunders' Appeal, (Conn.) 6 Atl. Rep. 193: ·Woodburyv.Woodbliry, (Mass.) 5 N. E. Rep. 275: Shepardson v. Pol,ter, (Mich.) 18 N. W.·Rep. 5:;5; Porter v. Throop,JMich.) 11 N. W. Rep. 174. It is always a ground of suspicion when a confidential agent takes a considerable interest under 'an instrument 'i'hich he has'prepared for execution. Yardley v.Cuthbertson, (Pa.) 1 Atl. Rep. 765. ,This 'is a role oLequity which alJplies to,any instl'umentwhose,procnrer is a large ben,eficiary there,u/lder, Id.; l)aVis v. Dean, (Wis.) 26 N. W. Rep.' 737; but it has been held that 'it is immaterial that a deed of gift by a principal to his agentwas drawn up by the 8'olicitor oLthe llgent, wi,thout the intervention ofa third party, and that such deed is .valid unless it can. be shllwn ,that some: advantage wllstaken hy the agent of the relation in which he stood to the donor, Ralston v.Turpin, 25 Fed. Rep. 7. Inadequacy of consideration alone is not generallysuffiCiel)t to, avoid an executed oonveyalic¢, though it should always pfthe circumstances. Cole v. Cole, (t\teb.) 31 N. W. Rep. 493: McHarry v. IrVIn sEx rs, (Ky.) 8 S. W. Rep. 874.

v;

')URTIN1l. POND.

16

While inequality in distribution, among his children, ot hiS property, by a tather, may 8S a circumstance tending to establish unsoundness of mind and undue influence, it mnot of itself conclusive, and sufficient to avoid settlement, SalisbtllJ" Y. Aldrich, {Ill.)8 N. E. Rep. 777 i or to set aside a will, Bledsoe v.Bledsoe. (x',.) 1 S. W. Bep.lo.
be considered

MARTIN 11. POND.

«(]irMJ,it GOUt''' D. Min1'ulottJ. February, 1887.)

1.

}[OBTCUGm-DEED ABSOLUTBON FACB-Bol'l'D 011' DEII'WAl'l'CB TO SON--FoREOLOSURE,

TuraD Plut·

t.

A.:, the owner of land, conveyed it by absolute deed to B., as security for a debt. B. afterwards, with the co-operation of A., conveyed it to C., to secure a loan made by C. to A., C, at their request giving back a bond ,to convey, upon payment, to D. Held, that C. was justified in treating D. as the owner of t,he equity of redemption. although he knew that the deed' from A. to B. waS intended as a mortgage, and even though the bond to D. was in fact never delivered to him, and he nevel' knew of Iti and that a title obtained by C., by foreclosure proceedings against D. alone. was valid as against a claim on the part 'of A, 01' B., or theinepresentatives. 1

Asuit for foreclosure' of 'a mortgage, not seeking a JU'dgtXlent, is essentially a in rem,andservice by p1;lblicatiqn, in a case allowed bY' the statilte. is suffiCIent to give jurisdiction. ....." ," , . B. 8.um-MArtmG SUlOIONS TO WRONG ADDBESs-.:.-An1DAVrr-LAws:MJNN.l88t, CH. 73, § 49. · . .. . .' Under LawllMinn. 1869. e. 73, § 49, allowing service bY' publication upon af· fldavit statinp;,among other things, that plaintiff h!L8 mailed a c0:PY of the summons to defendant at his place of reliidence, "unless iti8 stated Ul the afaddres.stp fidavit that his residence is not known to affiant, " the fact .that which the copy of summons was mailed, as stated in the affidavit, was not in fact the residence of defendant, held, not to render thejudgment void;' the plaintiff haVing acted in good faith. upon the best infGrmll.tion obtaitlable, the proper the publication being PNperly made, and, the jUdgment due service by publication., . ' .. 8.urE--WJlAT R.IGHTB FOREGLOSED--CLAnI$ IN DIlI'lI'ERENT RIGRT8·. The Qomplaint ina mortgage foreclosure suit aUegedthat defendants . 'claimed Bome Interest in or lien upon the pl'etnises, as owners of tlle equity of ption,which Interest, or lien, if any, it alleged to to the lien of the mortgage, and prayed that defendants be foreclosed of all e lllll,ty of redemption, and: other interest in the premises. The decree ordered: that the title of the purohaser at the.sale. should, in case of non-redemption, be. adjUdged free and clear of all equity of redemption on thll part of defendants or those claiming under them. ' Held, that the proceedings foreclosed a title of . defendan\'.'clerivedfroman execution sale, upon a judgment in favor of.third parties antedating the as well aa his title aa mor,tgagor.

8.um.:....FoiECLOSURE--SERVICB BY PUBLICATION.

In Equity.

Bartl,ewn Shaw, for complainant. Young Lightner, for .defendant.
BREWER, J; This is bill to redeem from a mortgage. The facta are these: Prior to November, 1873, R. J. Menden.hall owned the land in controversy, being a tract of 10 acres in the city'ofMinneapolis. On '" .
;

" ,

a

lA deed abSolute. on its face, and a bond for reconveyance e%ell11ted at thelaml Ume, a mortgage. FIey v. Campbell, (Ky.) $. W. Rep. 311S, and .