Barnard v. Gantz — 50 N.Y. St. Rep. 674

Majority

p. 674

John T. Barnard, Adm'r, App'lt, v. John T. Gantz et al., Resp'ts.

(Supreme Court, General Term, Second Department,

Filed December 12, 1892.)

Headnote

Trust—Undue influence.

An old lady, eighty years old, ignorant, deaf and passionate, executed a trust deed to her son-in-law, who was her attorney, and her son, by which the income of her property was to be paid to her for life, and upon her death §13,000 went absolutely to her son-in-law, and the remaining $30,000 after certain life estates to two sons, was to be divided equally between the trustees. She left six children; and at the time of making the deed was on ill terms with her two daughters, who were left without anything. At the same time she made a will with similar provisions, which she after-wards destroyed. During her lifetime she brought this action to set aside this trust deed on the ground of fraud and undue influence in its procurement. Held, that the transaction was one which should not stand.

Appeal from judgment dismissing the complaint.

Action brought by Ann E. Crouse, in her lifetime, to reform a

p. 675

certain trust deed by inserting in it a power of amendment or revocation.

George G. Barnard (E. B. Barnum, of counsel), for app’lt;

Hatch & Warren (Thomas F. Wickes, of counsel), for resp’ts.

On the 24th of August, 1883, Ann E. Grouse, now deceased, executed a trust deed to Washington Hall, a son-in-law, and John E. Gantz, a son, who were, by the deed, to collect the interest on the property covered by the deed. The property assigned was $33,000 in value. The income was to be paid to Mrs. Ann E. Grouse during her life. After her death, $13,000 of the property went absolutely to Washington A. Hall. Two separate trusts were created by which the income on $10,000 was to go for life to two children of Mrs. Gantz, and after their death the property was to go to the trustees, Hall and Gantz, equally in each trust fund. The trust property took almost the entire estate of Mrs. Grouse. She left six children when she died who were the children of her former husband, Gantz. In the absence of explanation, the result is very unjust. Hall, who is only the husband of a daughter, gets fully more than half of the whole trust estate, and his co-trustee, a son, gets what is left, some $10,000. The inequality as to the trustee, Gantz, is not so great as in the case of his co-trustee. The $20,000, after taking out the Hall gift, is subject to a life estate; one-half to one brother and the remaining half to another brother; and then, after the life estate expires, he gets $10,000. Two daughters get nothing. Hall was, for many years, the confidential adviser of the deceased, Mrs. Grouse. Mrs. Grouse, in her lifetime, commenced an action to set aside the trust deed because of fraud and undue influence in its procurement by Hall, which was, after her death, continued by plaintiff.

The question presented is whether the trust deed is valid or not. Mrs. Grouse was examined in her lifetime, but as Hall was then dead, her examination is not of the completeness which would have reached the whole transaction if her testimony had been unrestricted. She states that she thinks she executed a will at the time of the trust deed. The complaint states that the will divided the property in the same way as the trust deed. Mrs. Grouse states that when this trust deed was given she was on ill terms with her two daughters. The lawyer, Wilber, who drew the trust deed and witnessed it, does not remember the will, but his remembrance is clear that he read over the deed to Mrs. Crouse; that she was a bright, capable old lady of some eighty years of age. There is no proof that the trustee Gantz ever knew of the trust deed before its execution. Hall had been for many years a confidential adviser of Mrs. Grouse ; and the lawyer presumably even certainly employed the lawyer who drew it. 1 think there was a will drawn when the deed was drawn. Hall tells his wife, in speaking of the trust deed, that Mrs. Grouse had also made her will. The witness Clark says he has a recollection that an envelope was found in the Oriental bank where Hall kept the papers marked “ Will of Mrs. Grouse. ” Mrs. Grouse thinks she subsequently destroyed the will.

p. 676

Hall 'told his wife that the will and trust deed substantially gave the whole estate to her and her brothers. Why was there a will drawn if the deed was to be absolute and operative? The referee has found that she did not know that the legal effect of the deed was to irrevocably transfer the bonds. She was eighty years old and quite deaf. She was very ignorant and passionate; her letters show a savage temper. A transaction with her ought to be proven to have been understandingly made. She had a right to be better *' informed. Her adviser profited by her ignorance. The referee’s finding is supported by the transaction as well as by the proof. The subsequent ratification is without weight unless it was made with an understanding that the first deed did not take absolutely the property from her. She supposed that both deed and will could be changed by her at pleasure and the ratification was not intended by her to change her relation to her property as she understood the effect of the papers. The transaction is one which should not stand under the proof. Matter of will of Smith, 95 N. Y., 522 .

There should be a new trial, with costs to abide event.

Dykman and Pratt, JJ., concur.