I dissent. The court finds that, in obtaining the deed from his mother, Paul perpetrated no fraud upon her. This finding, however, is made in the face of undisputed facts upon which the law, as I understand it, stamps the badge of fraud.
The basic fact, as found by the trial court, is:
"That the defendant, Paul Geschke, failed to account to the said Matilda Geschke for certain of the rents, issues and profits of the property, and that the agreed amount for which the defendant has failed to account, is in the sum of $1,691.06. That the defendant is entitled to credit against said sum as follows:. . .
"Total credits $ 592.00 "Balance due estate $1,099.06"
In other words, at the time the deed was executed, Paul was indebted to his mother in the sum of $1,099.06. This was the equivalent of cash. It was nearly sufficient to discharge Mrs. Geschke's obligation to her daughter. Yet Paul did not, at any time, disclose to his mother this condition of her financial affairs.
Now, the law applicable to these facts is: When a fiduciary relationship exists between two persons, fraud inheres in any transaction in which one, without disclosing all material facts within his knowledge, gains an advantage over the other. In other words, this is one of those instances where the law says that concealment of a material fact constitutes fraud. Voellmeck v.Harding, 166 Wash. 93, 6 P.2d 373, 84 A.L.R. 608. And this court has been particularly rigorous in applying the rule to transactions between child and parent. *Page 145 In Payette v. Ferrier, 20 Wash. 479, 55 P. 629, this court, quoting from Bogie v. Bogie, 41 Wis. 219, stated:
"`The conveyances of property by aged and infirm people to their children in consideration of promised support and maintenance, are somewhat peculiar in their character and incidents, and must sometimes be dealt with by the court onprinciples not applicable to ordinary conveyances.'"
Again, in Storey v. Gaisford, 136 Wash. 378, 240 P. 9, the court explicitly approved the rule, and held that the burden of proving the utmost good faith was upon the child.
I think Paul not only failed to prove that he exercised the utmost good faith in the transaction, but that he was guilty of the grossest kind of fraud in obtaining the deed from his mother without disclosing to her the fact that he was then indebted to her in an amount practically sufficient to liquidate her obligation to her daughter, Mrs. Kalkwarf. For it is apparent from the facts set out in the majority opinion, that Mrs. Geschke executed the deed in the belief that all her resources, save the land, were exhausted. On these facts, would anyone doubt that Mrs. Geschke could have successfully maintained an action to set aside the deed on the ground of fraud? I think not. Since her right to maintain such an action descends to her heirs and administratrix (Storey v. Gaisford, supra), the deed should be set aside.
MAIN and MILLARD, JJ., concur with BLAKE, J. *Page 146