Gooch v. Gooch

Lawson Cloninger, Judge,

dissenting. I respectfully dissent from the majority’s opinion. I would hold the antenuptial agreement invalid on the basis that the chancellor’s decision was clearly against a preponderance of the evidence in that there was not a full and fair disclosure of Mr. Gooch’s property in the antenuptial agreement. The antenuptial agreement describes appellant’s property as set out below:

Whereas the party of the first part has disclosed to the party of the second part the full amount of all property owned by him, consisting primarily of the building at 5th and Clay Streets and rents therefrom, in Arka-delphia, Arkansas, approximately 240 acres in Talla-chatahie County, Mississippi, approximately 2200 acres in Lincoln County, Arkansas, approximately one-half interest in property located on Hy. 7, referred to as ‘Hide Out’, property located at 2211 West Pine, Arkadelphia, Arkansas, Partial Remainderman’s interest in property located at 107 No. 9th Street, Arka-delphia, Ark., stock in Bank of Star City, Benton State Bank and Elk Horn Bank and Trust Company and a few other stocks which party of the second part is familiar with; . . .

The rule in Arkansas with respect to antenuptial agreements is that they are to be regarded with the most rigid scrutiny and will not be enforced against a wife where the circumstances show that she has been overreached and deceived. Arnold v. Arnold, 261 Ark. 734, 553 S.W.2d 251 (1977). A presumption of designed concealment arises where the provision in an antenuptial agreement is disproportionate to the means of the intended husband. This casts the burden upon the husband who drafted the agreement to prove that there was full knowledge on the part of the intended wife of all that materially affected the contract. In other words, the intended husband must show by a preponderance of the evidence that the intended wife had full knowledge of the nature and extent of his property at the time the agreement was entered into before the husband can overcome the presumption of designed concealment. See Faver v. Faver, 266 Ark. 262, 583 S.W.2d 44 (1979); Arnold v. Arnold, supra; Davis v. Davis, 196 Ark. 57, 116 S.W.2d 607 (1938).

The majority states that Mr. Gooch “listed the bulk of his holdings in the agreement to an extent that substantially disclosed his wealth.” Further, it is stated that Mrs. Gooch failed to fully inform herself of the consequences and that there was no evidence of fraud. However, under Arkansas law, I find that the burden was not on Mrs. Gooch to inform herself of the consequences, but rather the burden was on Mr. Gooch to show that he fully, not substantially, informed her of the nature and extent of his property. That he failed to do.

Mr. Gooch did not disclose any of his income, including income which he received from his property holdings, his law practice, his stock holdings and income from his interest in race horses. Further, Mr. Gooch, in the antenuptial agreement, did not state the value of any of the property which he owned, as well as the income generated from such property. He stated in the agreement that he owned stock, but did not state how many shares or what the value of the shares are.

Nevertheless .the majority distinguishes this case from the cases of Faver, supra, and Arnold, supra, on the basis that in this case Mrs. Gooch was “made fully aware of the extent of appellee’s property before the agreement was executed.” I do not conceive how the majority can reach this conclusion in light of the above stated facts.

The majority emphasizes the fact that Mrs. Gooch was an experienced businesswoman coming into the marriage and should have informed herself of the consequences of the antenuptial agreement. However, as I have stated earlier, under Arkansas law the burden was not on Mrs. Gooch to show that she had fully informed herself of the consequences of the agreement, but rather was on Mr. Gooch to show that there was a full and fair disclosure of his property. Arnold, supra; Faver, supra.

In Arnold, supra, the following language is poignantly relevant to the facts in this case:

. . . because of the confidential relations between the parties, such an agreement is sufficiently suspicious to cast the burden of proof upon those who seek to support it to show that the husband took no advantage of his influence and knowledge and that the arrangement was fair and conscientious.

In Arnold, supra, the wife was to receive $ 100,000 in cash, an automobile and a trailer from the terms of an antenuptial agreement. The chancellor had found that the agreement was unjust and inequitable and was tainted with fraud in holding the agreement invalid. On appeal, the Arkansas Supreme Court noted that the widow’s rights would probably have been twice as valuable as the provision for her under the agreement in upholding the chancellor’s decision.

In this case, Mrs. Gooch receives nothing under the agreement. Obviously, her interests would have been substantial if she had not signed the agreement. Mr. Gooch stood in a confidential relationship to Mrs. Gooch, and it can be fairly said that he stood in a fiduciary capacity with respect to her interests, particularly in light of the fact that Mr. Gooch was a prominent lawyer in the community. Her testimony that “I wouldn’t think a lawyer could give me an opinion any more than Jim could give me” demonstrates the trust appellant reposed in appellee. I believe he failed in his fiduciary duty to Mrs. Gooch and that he failed to fully disclose the nature and extent of his property in the agreement. Aside from these reasons, I would reverse merely on the basis that the agreement, as written, is unjust and inequitable. See Arnold v. Arnold, supra.