Doheny v. Lacy

Spring, J.:

Lucius Gleason, at the time of his death, was seventy three years of age.. He had been a man of éxtraordinary energy during his whole life. Of limited book knowledge, he had accumulated a for*223tune; was actively engaged in many undertakings of importance and magnitude, and in each was the master spirit. He was instrumental in organizing the Third Fational Bank of Syracuse; was a large owner of its capital stock, and from early in its organization was its president. He was a bachelor and apparently was wedded to this bank. He gave much personal attention to its affairs, and the institution was generally well managed and its stock became valuable.

In 1888 he was deposed from the office of president. He was embittered .and humiliated by his removal, and with the resolute and relentless spirit characteristic of him he set his plans to reinstate himself in the ¡^residency, ánd quietly purchased from time to time large quantities of the capital stock and turned the same over to the defendant, in whom he had implicit confidence. This stock was in the main purchased above its then market value and was so received by defendant, and the' notes which are described in the complaint were given by defendant to Gleason as evidence of the indebtedness existing for this stock.

In 1889 Gleason was in command and caused himself to be re-elected, and announced, in rejoicing over his victory, that those who had accomplished his humiliation would receive few dividends on their certificates of stock and asserted with acerbity that the policy of the bank would be to retain whatever profit accnied from its business. He increased the salary of defendant as cashier from $2,500 to $12,000 per year, and also gave desirable positions in the bank to the two children of defendant. The obj'ect of this large increase in the salary of Lacy was to enable him to take care of the notes which represented the stock which he had acquired from Gleason.

A suit brought by some of the stockholders of the bank to require the directors to declare dividends was decided adversely to the Gleason interests.

On the 20th day of December, 1892, he executed his last will and testament. Fo property was disposed of by this instrument, and its purpose was to appoint the defendant his executor, and also to give significant recital and testimonial to his confidence in the j'udgment and integrity of Lacy. The will was admitted to probate.

On the twenty-fifth day of December, five days after the execu*224lion of his will, the agreement .in controversy was executed. Two days thereafter he executed a deed of his house and lot to his brother, and died January third following.

During the fall of 1892 Mr. Gleason was manifestly failing,- and was afflicted with diabetic gangrene. On the second day of December, this malady was so. aggravated and jiainful that he was confined to his bed. The disease progressed rapidly, and he suffered intense pain for the residue of his life.

There is a large mass of testimony directed to Mr; Gleason’s mental condition during the year 1892, extending down, to the time of his death.

' Mr. Baxter testified that he met him in Yew York in September, 1892, and that he was then feeble physically; that he was at his house December twenty-eighth or twenty-ninth, and described his condition at that time, from which it is claimed by plaintiffs that he was incapable of comprehending any business transaction.

Mr. Miller assisted in caring for Mr. Gleason from about December nineteenth until his death. Hie described the intense pain with which he was afflicted, and said that whisky and morphine were given him to alleviate his sufferings ; that he did not talk at all of business matters, although, when aroused up, he seemed to comprehend what was going on about him and to recognize people in his room; that on one night his bowel's moved three times in bed, soiling the clothes and person of Mr. Gleason, but apparently did not attract his attention. ;

Mr. Molloy and Mr. Hawley testified they were in the room of decedent about two o’clock in the afternoon of December twenty-fifth ; that he evidently was in great pain; that the muscles of his face were twitching. Mr. Molloy took hold of his hand and it was limp and lifeless, arid these witnesses were uncertain whether Mr. Gleason recognized them. Mr. Hawley testified that Mr. Molloy made some exclamation, while at the bedside of the decedent, in regard to his Christmas stocking, and the latter opened his eyes and smiled, but said nothing while they were in the room.

There is other testimony, which was given upon the part of the plaintiffs, tending somewhat to show that Mr. Gleason decreased very perceptibly in flesh during the year 1892; that he was not as regular at his bank as formerly ; -that he was very nervous ; com*225plained of inability to concentrate his faculties, and was a constant sufferer from, physical pain.

The contention of the plaintiffs is that Mr. Gleason’s bank suffered severely in the panic of 1884, and this loss was felt keenly by the president and unnerved him; that from this period until his death there was a constant decrease in his mental power and a constant diminution of his bodily strength, and the date of his decline is fixed by the plaintiffs at that period.

The proofs show that, whatever may have been the depletion of his mental faculties after 1884, up to within a short time previous to his last illness confining him to the house, he Was engaged in large business undertakings ; that he managed them with rare business ability; that he was aggressive and unwavering in his attention, to his various interests; that he was the dominating power in shaping the policy of the bank, except during the year of his displacement; that when he organized to counteract the opposition which had dethroned. him, he manifested . the systematic thoroughness and keenness in manipulation and unrelenting hatred which were always characteristic of him.

As I understand it, the claim of the plaintiffs is not that he lacked the capacity during this long period to make the agreement in controversy, but, that the inception of the disease was during this panic of 1884, and its progress was thenceforward continuous and insidious until his death.

The evidence in detail on the part of the plaintiffs shows the acts upon which this contention is founded, while that of the defendant tends to show that there was no abatement in decedent’s nerve power, unbending resolution or comprehensive grasp of the varied business interests in each of which he was a potential factor. .

The defendant produced a large number of witnesses who testified as to the mental condition of Mr.- Gleason after he was confined to his bed with the irritating disease of which he died.

It appears that Mrs. Bogue, who Mr. Miller said was present at the time of the movement of the bowels, did not go to Mr. Gleason’s until the twenty-ninth day of December,, so that the soiling of the bed clothes and person of the sick man must have occurred after this date.

*226The testimony of Molloy and Hawley, given in the Surrogate’s Court four years earlier, was received and tended to mitigate the effect of their testimony Upon this trial.

Betsy Davin, the domestic in the household of Mr. Gleason; her pastor, Mr. James, who visited him several times during the holidays down to December thirty-first, and had protracted conversations with him; Daniel Matthews, an old acquaintance; Abel G. Cook, his accountant and friend of many years, with several others, narrate instances and events occurring during this period, indicating that while the pain was severe and persistent, yet his intellect, was undimmed, and he appreciated any matter, whether business or social, to which he addressed his ¡attention; that he not only kept track of his business matters, but of the current events occurring in the world.'

Mr. Marshall, who had been a prominent attorney in Syracuse and an acquaintance of Mr. Gleason since 1884, and since 1889 his confidential adviser and a director of the hank, and in the contest for the control of the bank had adhered to Mr. Gleason, prepared .both the will and agreement in controversy. The will had been ' prepared at the request óf the testator during the summer preceding. Mr. Marshall was then practicing his profession in Few York, ánd' in December went to Chicago and stopped at Syracuse on the evening of the nineteenth, and learning that Mr. Gleason desired to see him drove to his residence in Liverpool on the afternoon of the twentieth. He had an extended conversation with the testator cov-. ering a variety of'matters, and according to Mr. Marshall he then had a keen insight and a clear appreciation of the subjects which were discussed. Finally, Mr. Marshall read the will to him. Mr. Gleason was satisfied with it, and it was executed. Mr. Marshall was familiar with the testator’s business relations with defendant, and with the giving of the notes for stock purchased and held by Lacy at the instance of Gleason. He explained to Mr. Gleason that in the event of his death Mr. Lacy might be compelled to part with his stock and thus lose the controlling interest in the bank which he then held. Mr. Gleason then talked over the most effective method of insuring the defendant in the retention of the stock, and finally determined upon the plan which was later incorporated into the agreement in close conformity to his scheme. Mr. Gleason then *227stated to Mr. Marshall the amount of the defendant’s indebtedness to him, the cost of the bank stock to defendant, and where it was obtained, and asked him to present the matter to Mr. Lacy, and if the plan evolved was satisfactory to defendant to prepare a contract accordingly. Mr. Marshall complied with-this request, and prepared the contract in suit, submitted it to the defendant; it was satisfactory to him, and he signed it on the twenty-fourth of December. On the evening of the following day the attorney went again to the residence of Mr. Gleason with Dr. Eisner, who was the attending physician.

The contract was read over to Mr. Gleason ; he made intelligent inquiries and suggestions concerning its various provisions, and, after its reading was completed, expressed his satisfaction with it, and signed it, and Mr. Marshall and the physician signed it as subscribing witnesses at the- request of Mr. Gleason.

Mr. Marshall had brought with him the note of Mr. Lacy, which was to represent the indebtedness according to the agreement, and the notes held by Gleason against defendant were surrendered.

Mr. Marshall is corroborated in a measure by Mr. Cook as to the execution of the will, and by Dr. Eisner as to what occurred at the time of the reading and execution of the agreement, and these witnesses are distinct and definite in testifying to acts showing a perfect understanding by the testator of what he was doing on these several occasions.

This testimony of these many witnesses, all directed to the single issue' of the mental condition of Mr. Gleason, extends all through the voluminous appeal book, and we have not attempted to make any minute analysis or- summary of it.

There is one proposition that is self-evident from this testimony, and that is that the determination of the mental condition of Mr. Gleason at "the time he executed the agreement rested with the jury. Unmistakably it was a question of fact, and has been solved in favor of the defendant by the verdict. There was no such overwhelming preponderance of evidence in favor of plaintiffs as would warrant the trial judge in directing a verdict for-them, had he been requested so to do, or to set aside the verdict after its rendition. In fact, the conclusion of the jury was amply justified by the evidence. Nor is there any injustice in the agreement itself crying out for its annul*228ment. Mr! Lacy, the defendant, had long been a trusted officer of the bank; he was a nephew of Mr. Gleason, and had retained his confidence through the stormy contest resulting, first in the.removal,. and, second, in the reinstatement: of Mr. Gleason to the presidency,, and in the conflicts which threatened the disruption of the institution so dear to this old man. In the subsequent litigation Lacy Ayas still zealous in his fidelity. The stock purchased by Lacy under the direction of Gleason was evidenced by notes Avhich, while, due on demand, vvere without interest, shoAving plainly an intent to recognize the faithfulness of this nephew.

Mr. Gleason had no children. He was a.steadfast friend as well as-relentless in his resentments. He sought to retain Lacy at the helm in the bank to reward him, and entered into the agreement for that purpose. The jury has said he was rational; that he comprehended the scope and purport of the agreement, and the court should not thwart his plan.

As I have already said, at the outset of the trial, the court stated the only issue to be tried was the mental capacity of Mr. Gleason, and this was acquiesced in by all parties^ Later on the learned trial judge submitted to the jury the correlative question of whether the. agreement was the result of influence improperly exercised over Mr. Gleason inducing him to maJke the agreement.

What we have stated as to'the: effect of the verdict of the jury on the. subject of the mental condition of Mr. Gleason applies with, equal force to this branch of the: case.

The counsel for the appellants has made an elaborate .argument, to show, as matter of law, that Mr. Lacy Avas chargeable Avith having exercised undue influence, because of his relation to the decedent*, and has analyzed many authorities in attempted support of this-position.

From the beginning to the end of this mass of testimony there is-nothing upon which the imputation of improper influence can rest. Mr. Lacy was not present at the execution of the will; the contract Ayas originated, and the whole scheme developed in his absence and without a hint or suggestion frpm him. The child had been born and attained manhood before he saAy him at all. The agreement, as concocted by decedent and Mr. Marshall, was concurred in by the defendant without any modification, even of a minor sort. The *229defendant was not present at its execution by Mr. Gleason, and, so far as the evidence shows, the subject had néver been alluded to by Gleason or Lacy. Lacy was the close friend of Gleason and the cashier of his bank, and these are not relations from which the unlawful domination of one mind over another can be inferred. Mere business connection, or mere opportunity, is not sufficient to support this grave charge. (Seguine v. Seguine, 4 Abb. Ct. App. Dec. 191; Matter of Snelling, 136 N. Y. 515 ; Matter of Rohe, 22 Misc. Rep. 415.)

As was said in the case first cited (at p. 198): “ Undue influence must be an influence exercised by coercion, imposition or fraud. It must not be such as arises from the influence of gratitude, affection or esteem, but it must be the ascendency of another will over that of the testator, whose faculties have been so impaired as to subject him to the controlling influence of force, imposition or fraud. * * * Moreover, the exertion of the influence upon the very act must be proved, and it will not be inferred from opportunity and interest.”

The basic principle actuating men to make wills and confer favors is the tie of relationship, the bond of friendship or the sentiment of love and affection. Benefactions are not made to enemies, and hence a testator, or one bestowing financial assistance upon another, in selecting those to whom he is drawn by a union of this, kind, is demonstrating a feeling akin to all mankind.

After the trial judge had delivered a very exhaustive and impartial charge to the jury, the counsel for the appellants requested the court to charge as follows, viz.: “ I will ask your honor to charge in this case as if the jury find that there were confidential business relations existing between Lucius Gleason and Henry Lacy in respect to the affairs of Mr. Gleason previous, to Mr. Gleason’s illness in December, 1892, and which were not disturbed or severed during that month, then the affirmative is upon Mr. Lacy to prove, and he must prove by a preponderance of evidence, that the contract of December 24th, 1892, was not procured by the undue influence of Lacy or those in his interest over Gleason, and was not procured by fraud, and was executed by Gleason, he understanding and appreciating its various conditions and covenants.”

The court refused to charge as requested, and an exception was *230taken. There are two or three adequate answers to the appellants’ contention that this refusal was error.

(1) It will be observed that this request is restricted to busmess relations of a confidential nature.: In this case they were that Lacy was the cashier of Gleason’s bank, and also that he was indebted to the latter. I have examined with some diligence the authorities cited by the counsel for the appellants upon • the proposition here urged, but am unable to find any case enunciating the doctrine that the bare existence of a relation in business which is confidential is ground for that grave suspicion altering the burden generally imposed upon the plaintiff in an action.

■ Every relation of business of any closeness or extending over a period of years is confidential in .its nature. Copartners, a cashier and his depositor or customer, the lender and the borrower of money, the directors of a bank or stock corporation, are severally allied in a relation which is confidential. It does not follow, however, that if one bearing any of these associations to another is charged with the exercise of improper influence upon his associates to his own benefit, that proof of the business connection requires the person accused to demonstrate affirmatively he is not a criminal.

(2) The facts in this case did not justify the submission of this question to the jury. Before the burden of proof is ever shifted and the • onus cast upon the defendant to clear himself from an imputation resting upon him, the evidence must show unmistakably that the person charged not only bears a close relation to the one he 'is suspected of defrauding, but other facts are essential; that the-one influenced is suffering from mental impairment and that he has been subservient to the over-mastering will power of the person accused. These facts have been clear and pertinent in all the cases cited by the counsel. (Barnard v. Gantz, 140 N. Y. 249 ; Matter of Smith, 95 id. 522; Marden v. Dorthy, 12 App. Div. 176; Cowee v. Cornell, 75 N. Y. 99.)

(3) If this shifting of the burden of proof had any application to this case whatever it must be because Lacy had exercised undue-influence upon_ Hr. Gleason. The fact the latter did not possess-sufficient Capacity to appreciate the kind of contract he was making-did not justify the request made. While impairment of intellect-necessarily exists where one mind has subverted another, yet the *231particular charge which gave a warrant for this request was the fraud imputed to Lacy. As we have already said, the record in this case presents no evidence upon which that charge can be hinged. The antecedent facts creating the suspicion are entirely wanting.

(4) But beyond this, it seems to me there is an entire misconception in the. appellants’, argument as to what is meant bv “ the shifting of the burden of proof.”

It often occurs during the. progress of a trial that upon proof of certain facts a presumption is created against the defendant calling for proof to clear himself. In an action charging the defendant with fraud, if the requisite facts are proved giving rise to a clear suspicion of fraud exercised by the defendant, then tlie presumption of its exercise exists and the defendant must remove the cloud overhanging him. That is a matter of evidence, and the burden originally assumed by the plaintiff assailing the transaction as fraudu lent still remains intact.

The rule is stated by Judge Rumsey in volume 2, page 268, of his work on Practice as follows, viz.: “ During the progress of the trial it often happens that the'party gives evidence tending to establish his allegation, sufficient it may be to establish it prima facie, and then it is sometimes said that the burden of proof is shifted ; all that is meant by this is that there is a necessity of evidence to answer the prima facie case or it will prevail; hut the burden of maintaining the affirmative of the issue involved in the action is upon the party alleging the fact which constituted the issue, and this burden remains during the trial.”

To the same effect is Whitlatch v. Fidelity & Casualty Co. (149 N. Y. 45); Farmers' Loan & Trust Co. v. Siefke (144 id. 354); Heinemann v. Heard (62 id. 448, 455).

In the case in 144 Hew York (at p. 359) the court states the rule as follows, viz.:

“All that this can properly mean is that, when the plaintiff has established aprima facie case, the defendant is bound to controvert it by evidence, otherwise he will be cast in judgment. When such evidence is given, and the case upon the whole evidence, that for and that against the fact asserted by the plaintiff, is submitted to court or jury, then the question of the burden of proof as to any fact in its proper sense arises and rests upon the party upon whom *232it was at the outset, and is not shifted by the course of the- trial, and the jury may be properly instructed that all material issues tendered by the plaintiff must be established by him. by a preponderance of evidence.”

The counsel for the appellants asked the court to charge that the affirmative is upon Lacy to prove, and he.must prove by a preponderance of evidence,” that undue influence had not been exerted. Assuming the essential facts had been proved casting the presumption of guilt upon Lacy, this request was far too broad. He was not obliged to establish his defense by a preponderance of evidence. That duty was. imposed upon plaintiffs primarily and so remained throughout the trial. Nor was the affirmative upon the defendant. There is a vast difference between requiring the defendant to remove the imputation resulting from á presumption and assuming the affirmative of an issue. One results from evidence on the trial; the other is a burden derived from the common law and also imposed by statute. ,

If the facts justified the charge of fraud against the defendant, and he failed to explain away the presumption thus created, the plaintiffs might have been entitled to an instruction that the duty was upon the defendant to relieve himself from the suspicion thus caused, but this request far exceeded what any facts would" uphold.

Again, it is contended that the court erred in permitting Mr. Marshall to testify on behalf of the defendant to what occurred at the time the terms of the contract were fixed by Mi*. Gleason and also at the time of .its. execution, as: they were communications between attorney and client, and hence within the prohibition of section 835 of the Code of Civil Procedure. This prohibition is for the protection of-the client, and,"if the communication is by him announced to the public, or if it occurred in the presence" of" others, it ceases to be confidential. (People v. Buchanan, 145 N. Y. 1, 26.) There was no attempt by Mr. Gleason to make this a confidential communication. People were in and out of the room, evidently within the hearing of the decedent, during the talks, and the conversation proceeded without interruption regardless of the presence or absence of others. Mr. Gleason directed the attorney to advise with Mr. Lacy in regard to the "provisions of this agreement and impart them to him, and, if satisfactory, to have them embodied into *233a contract, and Gleason made Mr. Marshall his agent for that purpose, and expected, of course, a disclosure of what had occurred, and the prohibition would not, therefore, be effective. (Matter of Coleman, 111 N. Y. 220; Rosseau v. Bleau, 131 id. 177.) As was said in the case last cited (at p. 184): “ When the deceased commissioned the witness to deliver the deed to the grantee named therein, she necessarily waived all objections that she might otherwise make to proof of that fact by the attorney.”

This waiver or assent to the removal of the inhibition extends to this action by the personal representatives of the testator. (Hurlburt v. Hurlburt, 128 N. Y. 420.)

Again, Marshall was' a subscribing witness to the agreement, by the explicit request of Grleason. This was a positive declaration that he expected his attorney to testify to this agreement and to speak in its support and vindication. It had the same force as where a testator invites his lawyer to become a subscribing witness to his will. The act is inconsistent with the assumption that he intended his attorney to regard the communication as privileged.

The other objections urged by the appellants’ counsel we have examined, but they do not require any independent discussion,

The judgment and order are affirmed, with costs.

All concurred, except McLennan, J., not sitting.

Judgment and order affirmed, with costs.