Bradley v. Crittenden

Bradley v. Crittenden
Collection
Supreme Court Judgments
Date
1932-04-26
Report
[1932] SCR 552
Judges
Duff, Lyman Poore; Rinfret, Thibaudeau; Lamont, John Henderson; Smith, Robert; Cannon, Lawrence Arthur Dumoulin
On appeal from
Alberta
Subjects
Contract
Decision Content
Supreme Court of Canada
Bradley v. Crittenden, [1932] S.C.R. 552
Date: 1932-04-26
Ernest F. Bradley, and Hector Lang and Rev. Edward T. Scragg, Executors of the Will of George Moulton Goddard, Deceased (Plaintiffs) Appellants;
and
Jennie Crittenden (Defendant) Respondent
1932: February 3, 4, 5; 1932: April 26.
Present:—Duff, Rinfret, Lamont, Smith and Cannon JJ.
ON APPEAL FROM THE APPELLATE DIVISION OF THE SUPREME COURT OF ALBERTA
Gift—Alleged undue influence—Action to set aside gift of bank shares made by person since deceased—Nature of relationship between donor and donee—Presumption—Onus. The residuary legatee and testamentary executors of G., deceased, sued to set aside a transfer of bank shares made by G., by way of gift, to defendant, about 8 months before G.'s death. At the time of the gift, G. was a man of 85, and defendant a woman of about 50, years of age. For some years they had been very friendly and intimate, and G. had several times proposed marriage to her. They had undertaken together the purchase of some property. About a month after the gift in ques- tion, G. gave her a general power of attorney and signed blank cheques, but these were never used. About 9 days before his death G. made his last will, the defendant not being present, which made no mention of the shares. There was no finding of any fraudulent or wrongful act or any deliberate exercise of undue influence on defendant's part; and the questions for determination were: whether there existed between them a relation of such a nature as would raise the presumption that defendant had influence over G. of such a kind that the court, acting on such presumption, would set aside the gift unless defendant established that in fact the gift was G.'s spontaneous act, in circumstances which enabled him to exercise an independent will, and which justified the court in holding that the gift was the result of a free exercise of his will; and, if there was such a relation as would raise the presumption, whether the presumption had been rebutted. The trial judge, Ewing J. (5 Alta. L.R. 562), set aside the gift. His judgment was reversed (two judges dissenting) by the Appellate Division, Alta. (ibid). On appeal to this Court:
Held (Duff and Lamont JJ. dissenting), that the judgment of the Appellate Division in defendant's favour should be affirmed.
The nature of the relationships giving rise to the presumption against a donee; the discharging of the onus of rebutting the presumption; the governing considerations; the materiality, weight and effect of certain circumstances; acquiescence or ratification by subsequent conduct of the donor; laches, etc., discussed.
Per Rinfret and Smith JJ.: It is not the law that any relation of confidence between a donor and a donee is sufficient to raise the presumption. The presumption does not extend to cases of relationship resulting from pure friendship, even though the friendship were of such a character that the donor reposed confidence and trust in the donee. In the present case, the only relationship established was one of deep affection and of the high regard in which G. held defendant. This affection in itself afforded a satisfactory explanation of the motive which prompted the gift. But, assuming that the relationship was such as to raise the presumption, it was rebutted by the facts and circumstances in evidence.
Per Cannon J.: While the relationship, which was one implying special confidence, was such as to raise the presumption, it had been rebutted. Moreover, the lapse of time during which G., when free from any influence of defendant, allowed the transaction to stand, and the other circumstances in the case, proved his determination to abide by what he had done.
Per Duff J. (dissenting): The relationship was such that, by reason thereof, it must be inferred from the facts in evidence that, in transactions with defendant, G. was not under the control of his own judgment; and the onus rested on defendant to shew that, in the matter of the gift in question, G. was entirely free from this influence; and that onus was not discharged. There was not adequate evidence to warrant a finding that G., after he became free (if he was ever wholly free) from defendant's influence, deliberately and spontaneously confirmed the gift.
Per Lamont J. (dissenting): The facts in evidence shewed the existence of such a relationship as raised the presumption. The onus was on defendant to establish that the transfer was made to her for her own benefit and was the spontaneous act of G.'s independent will; and this onus was not discharged. Without entirely disregarding defendant's testimony, effect should not be given to it unless it was corroborated by independent evidence. The evidence was not sufficient to establish, by G.'s subsequent conduct, any deliberate and intentional affirmance of the transfer.
APPEAL by the plaintiffs from the judgment of the Appellate Division of the Supreme Court of Alberta[1].
The action was brought by the residuary legatee, and by the executors, named in the will of one Goddard, deceased, to set aside a transfer, made by the deceased by way of gift, to the defendant of 44 shares of bank stock, it being alleged that at the time of the transfer the defendant stood in a confidential relationship to the deceased, that the deceased did not receive any independent advice and that he was induced to make the gift by the undue influence of defendant.
The trial judge, Ewing J.[2], gave judgment setting aside the transfer. His judgment was reversed by the Appellate Division (1) (Clarke and Lunney, J.J.A., dissenting).
The material facts of the case are sufficiently stated in the judgments now reported. The appeal to this Court was dismissed with costs, Duff and Lamont JJ. dissenting.
A. Macleod Sinclair K.C. and A. B. Clow for the appellants.
C. S. Blanchard K.C. for the respondent.
The judgment of Rinfret and Smith JJ. was delivered by
RINFRET, J.—The action is brought by the testamentary executors of the late G. M. Goddard, of Medicine Hat, in the province of Alberta, to have declared null and void and set aside a transfer by way of gift to the respondent of certain shares of stock in the Bank of Nova Scotia. It was admitted that there was no consideration passing from the respondent to Goddard.
The trial judge found that the transfer "was in fact a gift"; and the correctness of that finding cannot be seriously disputed. There is no evidence to support the contention that the shares were given to the respondent as trustee for the estate, or that an actual trust was created under either an express or an implied contract. The attack made upon the gift was based on two grounds; mental incapacity of the donor, and undue influence of the donee.
The ground of mental incapacity of the donor may be excluded at once. It was not entertained by the trial judge nor by the Appellate Division of the Supreme Court of Alberta, and it was not pressed by the appellants before this court.
It remains to consider the ground of undue influence.
The evidence does not bring this case within the group of cases mentioned by Lindley L.J., in Allcard v. Skinner[3], "in which there has been some unfair and improper conduct, some coercion from outside." We have here no finding of fraudulent or deliberate exercise of undue influence. As a matter of fact, the trial judge negatived any suggestion "that the defendant was guilty of any wrongful act." There was no evidence whatever of undue influence leading to the gift; or, to borrow the expression of Cotton L.J., in Allcard v. Skinner[4], "that the gift was the result of influence expressly used by the donee for the purpose."
Then, there is another class of cases "in which the position of the donor to the donee has been such that it has been the duty of the donee to advise the donor, or even to manage his property for him." Instances of these would be the position of solicitor to client, trustee to cestui que trust, guardian to ward; that of husband and wife, or of parent and child. In those instances, where the donor relies on the donee for guidance and advice, the doctrine of equity, as expounded in Huguenin v. Baseley [5] and such other cases, intervenes on the principle of presumed undue influence and introduces the rule that, while fiduciary relations of that character exist between donor and donee, it is, generally speaking, impossible to rebut the presumption, unless the donor had competent and independent advice.
But that is not the present case. It was not found here that the deceased relied on the respondent for advice of any kind or in relation to his business.
Other relations from the existence of which the courts have presumed the exercise of undue influence are those of spiritual adviser and devotee, medical attendant and patient, principal and agent; and also, in special cases, that of a man to a woman to whom he is engaged to be married. (See: Halsbury, Laws of England, vol. 15, p. 107, no. 215).
In the present case, however, the learned trial judge appears to have considered that any relation of confidence between a donor and a donee is sufficient to raise a presumption of undue influence; to put it in his own words: "that the relations between the deceased and the defendant (respondent) * * * raised a presumption that the donee had influence over the donor"; and, for that reason, he reached the conclusion that the action should be maintained. We do not agree with that view of the law.
The doctrines of equity do not require that the principle and the rule should be extended to relationship resulting from pure friendship, even were the friendship of such a character that the donor reposed confidence and trust in the donee. As said by Fletcher Moulton, L.J., in Coomber v. Coomber[6]: "The nature of the fiduciary relation must be such that it justifies the interference."
In the case at bar, there was no proof of any fiduciary relation so called, nor, in our view, proof of any confidential relationship such as is necessary to raise the presumption of undue influence. The only relationship established was one of deep affection and of the high regard in which the deceased held the respondent. We agree with the majority of the Court of Appeal that such affection, in itself, "provides a good reason" for the gift and affords a satisfactory explanation of the motive which prompted the donor to make it.
But, even if we should assume that the relationship in the premises was such as to raise any presumption, we think the facts and circumstances established in the case were sufficient completely to rebut the presumption. As found by the trial judge, the respondent "placed before the court frankly and, as far as (he) could judge, fully all the relevant facts in her possession." The learned judge accepted her story, but thought apparently that he was precluded from "taking her evidence into account" and that "the gift must be established by separate and inde- pendent evidence," and so he "felt bound" to set aside the transfer of the shares.
We do not think the proposition put thus absolutely may be stated as a rule of law (See: Koop v. Smith[7]; Fowkes v. Pascoe[8]); nor does that result flow from the provision in the statute of Alberta (s. 12 of c. 87, R.S.A., 1922), invoked by the appellants' counsel, which reads as follows:
In an action by or against the heirs, next of kin, executors, administrators, or assigns of a deceased person, an opposite or interested party shall not obtain a verdict, judgment or decision, on his own evidence, in respect of any matter occurring before the death of the deceased person, unless such evidence is corroborated by some other material evidence.
In Thompson v. Coulter[9], this court had to apply the Ontario statute, which is substantially similar, and Killam J., delivering the judgment of the court, remarked (p. 263):
The direct testimony of a second witness is unnecessary; the corroboration may be afforded by circumstances. McDonald v. McDonald[10].
Throughout the record in the present case may be found abundant corroboration of the evidence of the respondent. That corroboration "confirms the credit not only of the statements which are expressly supported but of all the statements made by her" (Minister of Stamps v. Town-end[11]). Even were the relationship existing between her and the deceased as contemplated by the decided cases and of a character to raise the presumption of undue influence, we would consider that, at all events, the evidence overbalances the presumption and shows that the gift made to the respondent by the deceased was a spontaneous and voluntary act on his part and "the result of the free exercise of independent will."
The judgment of the Appellate Division should be affirmed and the appeal should be dismissed with costs.
Under those circumstances, the application of the respondent for leave to reopen the case and adduce further evidence becomes unnecessary; and the costs of that application should be costs in the appeal. CANNON J.—In my opinion, undue influence might be presumed in this case because the deceased and the respondent stood towards one another in a relationship implying special confidence. The respondent therefore had to prove the fairness of the transaction and she has done so to my satisfaction.
Moreover, the gift was made in May, 1930, by a man of good business ability, not illiterate nor ignorant, who was not at a disadvantage in relation to it. The donor had already done much for his nephew Bradley; and he was entitled to do what he wished for the future welfare of the respondent, for whom he had a deep regard.
Before he made his will in January, 1931, he could have revoked, within a reasonable time, the intention which he had formed and declared in his letter to the bank requesting the transfer of the shares to the respondent. He confirmed his intention first by signing the necessary papers giving effect to the transfer. The appellants admit that the deceased had the testamentary capacity to make a will on the 14th of January, 1931, when he was entirely free to act as he pleased and gave his instructions to the Reverend Mr. Scragg. He then remarked that he had made "a great and grave mistake about Mrs. Crittenden"—from whose "influence" he had been, and was then, removed during the last few weeks of his life. In my view, the deceased was then content to let the gift stand; he did not even mention the exact nature of the transaction to Reverend Mr. Scragg, who was advising him, nor to the Bradleys with whom he was living. An impeachable transaction may become unimpeachable by reason of ratification after the influence of the "donee" has been removed. The lapse of time during which the donor has allowed the transaction to stand, and the other circumstances of the case prove a fixed, deliberate and unbiased determination that the gift should not be impeached—and the persistent will to take these shares out of the estate to avoid complications. Paraphrasing Lord Selborne's words in Mitchell v. Homfray[12], it must be held that whether he knew or not that he had power to retract the gift, he was determined to abide by his acts; this is not a case of mere acquiescence; he determined that he would not undo what he had done. This being the state of facts, I do not think that any authority goes the length of saying that his representatives after his death, can do that, which if he had lived he himself would not have done.
The appeal must be dismissed with costs.
DUFF J. (dissenting).—It is most important, I think, that some aspects of the law should be emphasized. The first branch of the legal rule can be put in this way: If A obtains property by contract or gift, by exercising influence upon B which, in the opinion of the court, prevents B from exercising an independent judgment, then the transaction is bad. With that particular class of case we are not concerned here. The present case belongs rather to those in which the court acts, not upon the proof of actual exercise of undue influence in a particular case, but upon a presumption of law and a rule of public policy. The rule and the presumption may be thus stated: If it be proved that there exists a relation between two persons, A and B, of such a nature as to give rise to a presumption that A possesses over B an influence which may, in operation, deprive him of his independence of judgment, then if, in any transaction B acquires from A property by gift or contract, the court will presume that the transaction has been the result of that influence and will set it aside, unless the donee (because in this case we are concerned with the case of gift) establishes, to the satisfaction of the court
"that in fact the gift was the spontaneous act of the donor acting under circumstances which enabled him to exercise an independent will and which justifies the Court in holding that the gift was the result of a free exercise of the donor's will. * * * In the second class of cases the Court interferes, not on the ground that any wrongful act has in fact been committed by the donee, but on the ground of public policy, and to prevent the relations which existed between the parties and the influence arising therefrom being abused."
The words in quotation marks are taken from the judgment of Cotton, L.J., in Allcard v. Skinner[13], and were explicitly approved by the House of Lords in Inche Noriah v. Shaik Allie Bin Omar[14].
Two other things it is important also to note: first, that where the case falls within the second of the classes mentioned, it is immaterial that the donor makes the gift without pressure or solicitation upon the donee, or that the donor perfectly understands the nature of what he is doing, that is, that he is conferring a bounty. Wright v. Vanderplank[15]; Rhodes v. Bate[16]. Effect was given to this in Allcard v. Skinner, where it was conceded that no pressure was exerted[17], except the inevitable pressure of the vows and rules.
Then, as to the duty of giving advice, that is very far from being the core of the matter. The substance is in the answer to the question, was the gift the result of the act of a person having power to act independently—who, in fact, is independent. The court sets aside the gift unless the court sees that the gift was the result of the independent judgment of the donor.
I have been quite unable to resist the conclusion, after an examination of all the facts, that the state of influence contemplated by the law in this branch of it did exist. We need not concern ourselves with the greater or less degree of analogy to other cases. I need only mention the case of Rhodes v. Bate[18], in which that great master of equity, Lord Justice Turner, stated that such cases as child and parent, solicitor and client, medical man and patient, were merely instances of the application of the general principle. The primary question that the court ought to ask itself is: should influence of the kind contemplated be presumed? The mere fact that the motive on one side is that of pure affection is immaterial. The principle has been applied to cases of engaged young persons, and of mother and son, brother and sister, sister and sister. As I have already said, it is immaterial that nothing in the nature of solicitation or activity on the part of the beneficiary has been disclosed or exists. It is not material that the whole transaction from beginning to end is free from moral blemish on either side. Rhodes v. Bate (4).
As already observed, it cannot properly be laid down that independent legal advice is the only way in which the presumption can be rebutted; "nor are they prepared to affirm," said the Lords of the Judicial Committee in Inche Noriah v. Shaik Allie Bin Omar[19],
that independent legal advice, when given, does not rebut the presumption, unless it be shewn that the advice was taken. It is necessary for the donee to prove that the gift was the result of the free exercise of independent will. The most obvious way to prove this is by establishing that the gift was made after the nature and effect of the transaction had been fully explained to the donor by some independent and qualified person so completely as to satisfy the court that the donor was acting independently (of any influence from the donee and with the full appreciation of what he was doing; and in cases where there are no other circumstances this may be the only means by which the donee can rebut the presumption. But the fact to be established is that stated in the judgment already cited of Cotton L.J., and if evidence is given of circumstances sufficient to establish this fact, their Lordships see no reason for disregarding them merely because they do not include independent advice from a lawyer. Nor are their Lordships prepared to lay down what advice must be received in order to satisfy the rule in cases where independent legal advice is relied upon, further than to say that it must be given with a knowledge of all relevant circumstances and must be such as a competent and honest adviser would give if acting solely in the interests of the donor.
It should, I think, in the present case, be emphasized that, as their Lordships state, if independent advice is to be given, it must be given with a knowledge of all relevant circumstances, and must be such as a competent and honest adviser would have given if acting solely in the interests of the donor.
My conclusion is that, in consequence of the relation between Goddard and the respondent, it must be inferred from the facts in evidence that, in transactions with Mrs. Crittenden, Goddard was not under the control of his own judgment, and that the onus rests upon the respondent to shew that in the matter of the gift in question he was entirely free from this influence. I think she has failed to do that.
It seems necessary to say a word as to acquiescence and laches. I am unable to agree that the few words uttered by Goddard during his last illness, coupled with what he did concerning his testamentary dispositions, can be accepted as adequate evidence that after he became free from the influence (if he was ever wholly free from it) of the respondent, he deliberately and spontaneously confirmed the gift. The term "acquiescence" is one which is sometimes rather loosely employed. I shall not stop to go through the authorities which illustrate the scope and proper application of the doctrine; because the law, as it affects such cases as this, is stated with perfect accuracy in the following passage from White & Tudor's Leading Cases in Equity[20]:
Delay in asserting rights cannot be in equity a defence unless the plaintiff knows his rights. In Allcard v. Skinner[21], more than six years had elapsed since the influence had ceased, and the action was commenced, and following the analogy of the Statute of Limitations in actions for money had and received, such delay would be a very material element for consideration. And although delay is not a bar in itself, it is a fact to be considered in determining whether there has been an election on the part of the donor to confirm the gift.
In cases of this kind there can be no acquiescence until the donor knows his rights and is free from the influence, but ignorance of his rights which is the result of deliberate choice is no answer to a defence of laches and acquiescence. It is enough for the donee to show that the donor knew he might have rights, and being a free agent at the time, deliberately determined not to inquire what they were or to act upon them.
I can find no evidence in this case upon which an inference can be founded that Goddard either knew his right to recall the gift, or that he had any suspicion of the existence of such a right, and deliberately chose to remain in ignorance of it. I find nothing to indicate, on his part, a deliberate abstention from enquiry. I should be disposed to ascribe his inaction to the combined effect of lack of knowledge and growing weakness of body and mind.
The appeal, in my opinion, should be allowed and the judgment of the trial judge restored.
LAMONT J. (dissenting).—The appellants, who are the residuary legatee and the executors of the last will of George Moulton Goddard of Medicine Hat, brought this action to set aside a transfer of 44 shares of the capital stock of the Bank of Nova Scotia made by the deceased Goddard to the respondent on or about May 30, 1930. Goddard died on January 23, 1931.
The grounds upon which it is sought to set aside the transfer are: that there was no consideration therefor; that the parties stood in a confidential relation one to the other, and that the transfer was induced by undue influence.
The principle upon which courts act in cases in this kind was laid down by the Court of Appeal in Allcard v. Skinner[22]; and by the Privy Council in Inche Noriah v. Shaik Allie Bin Omar[23], and, as set out in the head-note of the latter case, is as follows:—
Where the relations between a donor and donee raise a presumption that the donee had influence over the donor, the court will set aside the gift unless the donee establishes that it was the spontaneous act of the donor acting in circumstances which enabled him to exercise an independent will, and which justified the court in holding that it was the result of a free exercise of the donor's will. In such a case the court interferes, not on the ground that any wrongful act has in fact been committed by the donee, but on the ground of public policy and to prevent the relation which exists between the parties and the influence arising therefrom being abused. In fact, courts have gone so far as to set aside gifts made to persons in a position to exercise undue influence over the donors, although there was no proof of the actual exercise of such influence.
In the present case the first and most important question is: Was the relationship existing between the deceased Goddard and the respondent sufficient to raise a presumption that the transfer of the shares was the result of undue influence on the part of the respondent? On this question the facts are all important.
The deceased with his wife came to Alberta from Newfoundland in the fall of 1918. He had been a successful merchant and business man there and, some forty years before he came west, he had adopted as a son his nephew who grew up with him and married, but still continued to live with him. The nephew (the plaintiff Bradley) also came to Medicine Hat in 1918, where the deceased had bought a farm for him. He also bought him a house and later the Shamrock Bottling Works. In fact, he made his nephew independent. The deceased, his wife and the Bradleys all lived together. The deceased and the respondent became acquainted as they were both active workers in the same church.
Mrs. Goddard died in 1923. In 1924 the deceased commenced to visit the respondent at her home. She was a married woman living separate from her husband and earning her living by dressmaking. Her husband had, in 1923, commenced divorce proceedings against her, in the United States, but whether or not he took out the final order the respondent did not know. The deceased visited her two or three times each week; they kissed when they met and when they parted. In 1925 he proposed marriage to her, but she said she did not know if she was free to marry. On cross-examination she said she refused him. He, however, continued his visits as before and, between 1925 and the early part of 1928, he had proposed marriage to her on six different occasions. She admits he was very much in love with her and had offered to change his will and leave her everything he had if she would marry him. She also admits that she had learned about his affairs and the property he had, and said he was in the habit of bringing to her his papers as he knew she was interested in him. In 1926 he brought to her his will in which the bank shares in question in this action were bequeathed to the plaintiff Bradley. She ascertained from a lawyer the meaning of a holograph will and what, under the Alberta law, was necessary to its validity. This information she conveyed to the deceased. In the fall of 1929 she says the deceased shewed her a holograph will in which the 44 shares in the Bank of Nova Scotia were bequeathed to her and she was made sole executrix of the will. This will was not produced nor was there any evidence, except her own, that it had ever existed. In April, 1930, she says the deceased told her he was going to take the shares in question out of the will and give them to her. On May 9, 1930, the deceased had a fall and it is common ground that he was badly shaken up as a result thereof. Mrs. Bradley says that after his accident "his speech was much changed; that it was quite thick and he could not say his words plain." It was for that reason she thought he had had a stroke. After the accident he brought to the respondent another holograph will, supposed to be a copy of the 1929 will except as to the shares. This will bears date May 20, 1929, but she says she called the deceased's attention to the year and he admitted that it should be 1930, and said he would rectify that. This will was produced. In it there is no mention of the 44 Bank of Nova Scotia shares. After specifying a number of bequests the will contains this clause:—
I appoint my friend Jennie Crittenden to he my Sole Executrix of this my- last will for the purpose of settling all my affairs stated herein and leave the sum of $300 for her services in connection with same, all my personal and private effects together with the contents of my office, I leave in her charge to be used at her discretion and with power to collect any monies due to me all necessary documents are to be found in my safe My Life Insurance Policies (Mutual Life No. 313777) and Confederation Life 19732 shall be used to provide for bequests above mentioned and to these shall be added any other monies standing to my credit, after satisfying these claims, together with all my just debts and funeral expenses, the residue shall constitute a fund from which certain Church and Charitable contributions shall be made annually in my name. My wishes in this respect I have conveyed to my executrix.
The day before he wrote this will the deceased had sent his certificates for the 44 shares in the Bank of Nova Scotia to the bank at Calgary, with instructions to have the shares transferred to the respondent. The bank manager sent back the necessary forms for signature, and, after they had been duly executed by both, the respondent returned them to the bank on May 30, 1930, and certificates in her name were issued; but she says it was understood that he was to have the dividends while he lived and after his death the shares were to be hers. At this time the deceased was still visiting her two or three times a week and he had no independent advice as to the transfer. He was then eighty-five years old, and she was around fifty.
At this point it is convenient to refer to their business transactions: In July, 1928, they both went for a trip to Vancouver along with his brother. While there the deceased purchased some property, and so did the respondent. They also bought one piece of property jointly for $3,375, with a cash payment of $844. The deceased made the entire cash payment but the agreement was taken in her name alone, and she says she subsequently paid him the moneys he had paid for her. From that time she took charge of these real estate transactions, his as well as her own, paying the taxes, interest, etc.
On June 30, 1930, the deceased gave the respondent a general power of attorney authorizing her (inter alia) to collect all moneys due to him, to sell and dispose of all mortgages, stocks, bonds, and all other personal property, and all lands of which he was possessed, at such prices as to her might seem best. He also gave her seven cheques, signed by him, but left blank as to date, payee and amount, on various banks in which he had accounts, not only in Medicine Hat and Edmonton, Alberta, but also in St. Johns, Newfoundland. After receiving these she was in complete control of all his money and property. She, however, made no use of either the power of attorney or the cheques.
In the early part of January, 1931, the deceased took sick and, on January 14, made his last will in which the appellants, Lang and Scragg, were made his executors, and Bradley the residuary legatee. No mention is made of the shares, and the respondent is given a legacy of $100. The entire estate of the deceased at that time, including the shares in question, amounted to $25,400, and the shares were worth $14,080.
Do the above facts shew the existence of a relationship which raises a presumption that the transfer of the shares to the respondent was due to the influence she had over the deceased? In my opinion they do. One of the fundamental principles of our law is that a person standing in a fiduciary relation shall not be allowed to use the influence he derives from his position for his own material advantage and to the prejudice of those whom he should protect. No general rule can be laid down as to what shall constitute undue influence. Each case must depend upon its own particular circumstances. In determining the question it must not be forgotten that a man sui juris has a right to do as he likes with his own property, and the fact that the transaction may be improvident, extravagant or foolish on the part, of the donor will not alone justify interference with it. It is for the court in each ease to say if the influence exercised has been so pressing as to be undue influence within the rules of equity.
Undue influence has been presumed where the relationship existing between donor and donee was that of solicitor and client, doctor and patient, confessor and penitent, guardian and ward, etc. The rule, however, is not confined in its application to cases in which a fiduciary relationship exists. As was said by Lord Cottenham in Dent v. Bennett[24], and quoted with approval in Cavendish v. Strutt [25] :—
The relief stands upon a general principle, applying to all the variety of relations in which dominion may be exercised by one person over another.
The rule has also, been applied where the relationship existing is that of a man and woman engaged to be married. In re Lloyds Bank, Bomze v. Bomze[26]. In that case Mr. Justice Maugham said:—
A young woman engaged to be married, however, is in a different position. In general she reposes the greatest confidence in her future husband.
See also: Page v. Home[27]; Cobbett v. Brock[28]; Howes v. Bishop[29]. Does the rule apply where the donor and donee are not formally engaged but the donor is greatly in love with the donee and desires to make her his wife?
Under the circumstances of this case I am of opinion that it does. I am unable to conceive of the deceased having any greater confidence in the respondent had there been a formal engagement between them than that which the evidence shews actually existed. She says she refused his offer of marriage when first made. If so it must have been a refusal which did not repel, for his visits continued and, for over two years, his proposal was at intervals renewed. She occupied a fiduciary relation towards him in respect of the Vancouver property, and she admits that hers was the stronger mind and the stronger personality.
The giving to the respondent of a general power of attorney and the cheques one month after he made the transfer of the shares, shews the special confidence he had in her, as does also his making her residuary legatee under the holograph will, with a direction to distribute the fund in accordance with his verbal instructions, and his giving to her the combination of his safe which he gave to no other person. Further, although he was living with Mrs. Bradley, his relations with the respondent were so intimate that, on his last visit to her (January 6, 1931), he took her his coat to mend, and she admits that she often pressed his clothes. All this indicates how intimate and confidential was the relationship existing between them. In addition to these confidential relations there is the admitted fact that she informed the deceased as to what constituted a holograph will and the requirements necessary for its validity. In doing so there may have been nothing whatever of calculation in her action, but a holograph will appears in which she is designated the residuary legatee. Both the will and the transfer of the shares were kept secret. It is, as I read the authorities, just in cases of this kind that the courts have insisted upon the application of the rule.
Then has that presumption been rebutted? That the deceased knew what he was doing cannot, I think, be disputed. He gave the bank instructions to make the transfer. That, however, in a case of this kind, proves nothing more than that he was transferring the shares to her. It furnishes no evidence of the terms upon which she was to hold the legal title thereto. And, even if it did, it might only tend to shew more clearly the deep rooted influence which the respondent had over him. The statement of claim alleges the transfer was made by way of gift, but, at the trial, counsel for the appellants sought to amend the prayer for relief by claiming in the alternative that the respondent held the shares as trustee for the deceased. The amendment was refused. I think it might well have been allowed. The facts were all before the court. The only living person who knew the conditions upon which she received the shares, so far as we know, was the respondent herself. If any one else had been present when the conditions were decided upon she would be aware of it and would have had that person at the trial if he could have corroborated her story. The onus was on her to establish the gift as well as that it was the spontaneous act of the donor's independent will. In Walker v. Smith[30], Sir John Romilly, M.R., said:—
He (the donee) must prove every point of the case, not only the transfer, but that the transfer was meant to be made to him beneficially.
And at page 396 he said:—
I am of opinion that, in all these cases, you must not take into account the evidence of the recipient himself; the gift must be established by separate and independent evidence.
Without entirely disregarding the donee's testimony I would say that effect should not be given to it unless it is corroborated by independent evidence. Upon the vital point that it was the intention of the deceased to give to the respondent the beneficial interest in the shares conditioned upon her paying the dividends to him during his lifetime, there is absolutely no evidence but her own. It is consistent with all the evidence but that of the respondent that the deceased may have transferred the shares to her to pay the dividends to him during his lifetime, and then to apply the shares to a particular purpose expressed verbally to her by him, and not put in writing, but which no person knew but themselves.
As to the transfer of the shares being the spontaneous act of the deceased in the exercise of an independent will, I am of opinion that the onus resting on the respondent has not been discharged. That confidential relations existed between them during the years he was seeking to make her his wife is not denied by the respondent. Where a confidential relation is established the court will presume its continuance unless there is distinct evidence of its determination. Rhodes v. Bate[31]. That there was no termination of this relation prior to the transf