136 Ky. 556 | Ky. Ct. App. | 1909
Opinion op the Court by
Reversing.
For many years prior to Ms death, Patrick Banron was engaged in the manufacture of sewer pipe and vitrified brick, in Louisville, Ky. They were manufactured at separate plants, and he was the sole owner of each. He had seven children — four daughters and three sons. His sons worked with and assisted him in the conduct of his business, and his oldest son, M. J. Bannon, took quite an active part in the management of both of these plants. In 1902, realizing that he was growing old, and for the purpose of continuing the business after his death for the benefit of his family, he caused each business to be incorporated; the pipe company under the name of “P. Bannon Sewer Pipe Company,” and the brick company under the name of the ££ Kentucky Vitrified Brick Company.” He and his sons were the incorporators and the officers of each company. The amount of the capital stock of the pipe company was fixed at $100,000, divided into 1,000 shares of $100 each, and the capital stock of the brick company was fixed at $75,000, divided into 750 shares of $100 each. Patrick Bannon, at the date of the organization of these corporations, transferred to each all of the as
On September 2d following, he executed two powers of attorney, by which he disposed of 500 shares of the. sewer pipe company stock, and 410 shares of the brick company stock. Said powers of attorney are as follows:
“For value received, I hereby sell, transfer and assign five hundred (500) shares of +-he stock within mentioned of the P. Bannon Sewer Pipe Company, to the following parties: M. J. Bannon, 250 shares. Lillie Broderick, 13 shares. John W. Jacquemin, Gdn. of Joseph L. Jacquemin, August B. Jacquemin, and John J. Jacquemin, Jr., 37 shares. Mrs. Gertrude O’Connor, 50 shares. Mrs. Mollie Burrell, 50 shares. Mrs. Lillie Hardesty, 50 shares. Mrs. Susannah Ban-non, 50 shares. And I request that a certificate be issued to me for the remaining 150 shares of said stock, and I hereby irrevocably constitute and appoint Henry M. Waitring my attorney to make the necessary transfer on the books of the corporation. Witness my hand and seal this 2d day of September, 1902. P. Bannon, Sr. Witnessed by: Herman F. Waitring. Chas. F. Taylor, Atty.”
*561 “For value received, I hereby sell, transfer and assign, four hundred and ten (410) shares of the stock within mentioned, in the Kentucky Vitrified Brick Company, to the following’ named parties: M. J. Ban-non, 200 shares. B. B'. Bannon, 10 shares. Mrs. Gertrude O’Connor, 40 shares. Mrs. Mollie Burrell, 40 shares. Mrs. Lillie Hardesty, 40 shares. Mrs. Susannah Bannon, 40 shares. Lillie Broderick, 10 shares. John Jacquemin, Grdn. of Joseph L. Jacqnemin, August B1. Jacquemin, and John W. Jacqnemin, Jr., 30 shares. And I request that a certificate be issued to me for the remaining seventy-five (75) of said stock, and I hereby irrevocably constitute and appoint Bobert L. Burrell my attorney to make the necessary transfer on the books of the corporation. “Witness my hand and seal this 2d day of September, 1902. P. Bannon, Sr. Witnessed by: Herman F. Waitring. Chas. F. Taylor, Attorney.”
Thus the stock of each of these corporations was owned by the different members of his household until his death in 1906. He left no will. His wife had died in 1903. There survived him his three sons, three daughters, and Lillie Broderick, Joseph L. Jacqnemin, August B. Jacquemin, and John W. Jacqúemin, Jr., children of Mrs. Louise Jacquemin, a deceased daughter. Some time after his death trouble arose among the children over the conduct of the business of these respective corporations, which resulted in suits being brought by B. B. Bannon and his brother-in-law, against M. J. Bannon, Patrick Bannon, Jr., and the Jacquemin children to have the respective corporations placed in the hands of a receiver. Thereafter, by an amended pleading, filed in October, they sought to have M. J. Bannon en
These two suits, involving the same parties plaintiff and defendant, were, by agreement, heard and considered together; the same evidence being used in each. Six points are relied upon for a reversal: (1) That inasmuch as, at the same time and under the same powers of attorney by which the defendant M. J. Bannon was invested with the shares of stock in controversy, plaintiffs received certain shares of stock from their father, they are estopped from denying that he did not have sufficient mental capacity to know and understand what he was doing, or that he was overreached or unduly influenced in the making of the partial distribution of his estate represented by said stocks. That, by accepting the stock which these powers of attorney directed to be issued to them, plaintiffs are estopped from denying that Patrick Bannon at that time did not have capacity to execute the powers, or that he was overreached or deceived into the execution of same. In other words, that they can not hold under and against these powers of attorney. (2) That the court erred in refusing to permit Charles F. Taylor, the attorney of Patrick Bannon, who drew the power of attorney, to testify concerning the conversations had with deceased at the time these powers of attorney were executed, and the instructions which he received from deceased relative to their execution, and the circumstances under which they were drawn and prepared. (3) That, inasmuch as there was no proof of mental incapacity at the time of the transfer of this stock, the court erred in submitting this question to the jury. (4) As there was no proof of either fraud or un
The suits, as originally brought, were in equity, and the relief sought a purely equitable relief. The cause of action set up in the amended petition filed in December was clearly a misjoinder, for the relief sought in this, second amended petition was in no wise connected with the original cause of action, in which the relief sought was the settlement of the affairs of the respective corporations, and, as a means to that end, the appointment of a receiver to take charge of each while they were being wound up; whereas, the relief sought in the amendment filed in December was one purely personal to the defendant M. J. Bannon. Neither corporation had any interest whatever in the result of the litigation between the plaintiffs and the defendant M. J. Bannon over the question of the validity of his title to the shares of stock described in the second amended petition. This was a separate and distinct cause of action, and the court should not have permitted this pleading to be filed, or, having permitted -it to be filed, it was the duty of defendants, as provided by'section
On the question of estoppel it is but necessary to note that the plaintiffs did not know of the existence of the powers of attorney ref erred to at the time they íeceived the stocks which their father had directed to be issued to them under said powers. In fact, it appears that they did not know of the existence of such powers of attorney until after the death of their lather; nor does it appear that when they received their respective shares of stock, passed to them by these powers of attorney, they knew that their brother M. J. Bannon had at the same time received the 250 and 200 shares of stock respectively, which they directed transferred to him. In order that the doctrine of estoppel might become applicable at all, plaintiffs must have acted with full knowledge of the facts. Unquestionably, if, at -the time this distribution was made, P. Bannon, Sr., had called his children before him, and had told them that he was proposing to make a partial distribution of his stock, and that he proposed to give each the portion designated in the powers o'f attorney, and they had accepted those gifts from him, under such
In 16 Cyc. p. 730, the general rule is thus stated: “Knowledge of the truth as to the material facts represented or concealed is generally indispensable to the application of equitable estoppel.” And again: “It is an essential element of equitable estoppel that the person invoking it has been influenced by and relied upon the representations or conduct of the person sought to be estopped.” If we entertained any doubt as to the correctness of the conclusion reached upon this point, it would be entirely removed by the application of the following well-recognized rule: “No estoppel arises where the representation or conduct of the party sought to be estopped is due to ignorance founded upon an innocent mistake.” Appellant was in no wise influenced to receive his stock by any act on the part of appellees and he is now In no position to seek to deny to them the right to inquire into the circumstances under which these powers of attorney which passed this stock were executed. Of course, in the equitable settlement and adjustment of matters, if it should develop
On the second ground for reversal relied upon, more difficulty is presented. The testimony of the witness Charles F. Taylor was of vital importance to the defendant M. J. Bannon in the presentation of his defense to the charge of undue influence, and also want of capacity on the part of his father to know and understand what he was doing at the time he incorporated these companies and executed the powers of attorney in question. He was better qualified to speak concerning these transactions than any witness who was offered, or could have been offered, to testify in regard thereto, and appellant should not have been denied the right to the benefit of this testimony unless the rigidity of the rules of law governing’ the introduction of evidence positively prohibited it. The trial court seemed to have proceeded upon the idea that, as these transactions were communications between attorney and client, they were privileged. They are confidential and privileged, but this privilege extends only to the client. He may waive it if he desires, and, in cases where the ends of justice require it, some courts have compelled an attorney to testify, even though his client has not waived the privilege. Were Patrick Bannon living, and these questions made, there can be no doubt but what he could waive this privilege, and permit his
It is the policy of the law, as far as possible, to turn the searchlight of investigation upon every transaction connected with a case, in order that the truth may be known. This is especially true where the charges are such as we have under consideration here. To this end it is in the interest of justice that every one having any connection with the transaction should be permitted to tell all he knows about it. The writings under consideration, which authorized the transfer of the shares of stock in question, are in many respects testamentary in character. They ■were each signed by Patrick Bannon in.the presence of, and attested by, two witnesses, and were, immediately upon their execution placed in charge of Hen-, ry M. ~Waltring, and were, by him, put under lock and key in a safe of which he alone knew the combination and. to which he alone had access. Thus they were kept until after the death of Patrick Ban-non, so far as the record shows. Shortly after the contents thereof became known, these suits were filed attacking their validity. In a contest over a will, the weight of authority is to the effect that communications made to an attorney by the testator while giving instructions for drafting the "will are held not to be privileged to the extent that he can not testify in regard thereto. This is on the ground that the protection which the rule gives is the protection of the client, and that it can not be said to be to the
The court refused to permit certain of the appellees to testify with reference to conversations had with their father, and statements made by him for the purpose of showing lack of capacity to transact business; or that he was overreached or unduly influenced in business transactions by the appellant. This was error. This court has repeatedly held, in contests over the probate of a'will, that the heirs at law are competent witnesses, and may detail any transaction or conversation with the testator which would tend to throw light upon the question of .capacity or undue influence exercised over him at the
On the questions of undue influence and want of capacity, as in will contests, the evidence must of necessity take a wide range, and can not be confined to the immediate dates upon which the transactions cut of which this litigation grows took place. Any evidence tending to establish lack of capacity on the part of Patrick Bannon to execute the powers of attorney in question, or that in the execution thereof he was unduly influenced by his son, M. J. Bannon, is competent. Complaint is made that there is a total failure of evidence showing want of capacity on the part of Patrick Bannon to execute these powers, and likewise a total failure of evidence of any fraud practiced upon, or any undue influence exercised over, him by his son. As to the first and third propositions, we can not agree with counsel. There is some evidence tending to show that, at or about the time of the execution of the powers of attorney, his mentality was failing. He was an old man, and it" was a question for the jury to say, under the facts and circumstances produced in evidence, under proper instructions of court, whether or not at the time of the execution of these papers in question, he had sufficient mind to know and understand what he was doing. So, likewise, there is some evidence tending to show that the appellant had and exercised a great influence over his father. "Whether this was an undue influence or not should likewise have been submitted to the jury.
On the charge of fraud there is a total failure of evidence. There are not even any facts or circumstances brought out in the evidence which would tend to show that, in the execution of these papers, or in
Appellant complains that the instructions which the court gave did not properly present the law. On the question of lack of capacity, the court gave the following instruction: “(4) If.you believe from the evidence that Patrick Bannon, on September 2, 1902, when the stock was transferred, did not have mind and mental capacity sufficient to understand his property rights, and the character, object, and nature of the transfer of the stock, and to transfer the same according to a definite purpose and desire of his own,T instruct you that he was of ‘unsound mind,’ as this term is used in the first instruction; but if you believe from the evidence that at said time he did
An instruction defining “undue influence” in practically the same language as that given by the court in this casé was; in the recent case of Murphy’s Executor v. Hoagland, 107 S. W. 303, condemned for the reason that it was confusing and involved, and, in lieu thereof, the court, in that case, directed the following instruction to be given: “Any influence obtained over the-mind of a testator to such an extent as to destroy his free agency, and to constrain him to do against his will what he would otherwise refuse to do, is ‘undue influence,’ and the law condemns as undue such an influence, when exercised over the testamentary act, whether obtained directly or indirectly, or at one time or another; but'any reasonable influence obtained by acts of kindness, or by argument addressed to the understanding, is not, in law, ‘undue influence.’ ” In lieu of the instruction defining “undue influence,” the court should give the instruction approved in the Murphy Case modified to suit the case at bar.
As the issue of fraud in procuring the execution of the papers in question is eliminated by reason of lack of evidence, the use of the word “fraud” in the first instruction is, of course, improper, and should, upon the next trial, be eliminated therefrom. Instruction No. 2, defining “fraud,” should be omitted
The final complaint made by appellant is that the court erred in directing the jury to return a general verdict; whereas, he should have directed them to return specific findings upon the questions submitted. This was an equity action, properly commenced as such, and, under section 12 of the Civil Code of Practice, a litigant has a right to ask to have the issues of fact raised in the pleadings tried by a jury. The verdict of the jury in such case is not conclusive, but merely advisory, and hence it is insisted by appellant that the court erred in directing a general verdict, that, inasmuch as there were two issues of fact submitted to the jury, it was impossible for the court to determine from its verdict whether such verdict was predicated upon a finding that Patrick Bannon was unduly influenced to execute said papers, or did not have sufficient mental capacity. It is urged that a state of facts might have been presented which would have warranted the chancellor in altogether ignoring the verdict of the jury, and entering a judgment to the contrary. For instance, if the jury had found that he did not have sufficient mental capacity to execute the papers, and the chancellor was of opinion that its finding was flagrantly against the evidence, he would have been justified in ignoring the verdict and entering a judgment to the contrary, unless he believed that, in spite of the finding of the jury, there was evidence of undue, influence sufficient to justify him in entering a judgment canceling the certificates of stock in question on that ground. In the case of Ayres v. John Scott, 2 Ky. 162, it was held that, where a chancellor directed an issue out of chancery to be tried by a jury, he should confine the inquiry
For the reasons indicated, the judgment in each of the foregoing cases is reversed, and the cases are remanded for a new trial and further proceedings consistent with this opinion.
On petition eor modification.
In the petition for a,modification of the opinion rendered herein, our attention is called to the con
Petition for rehearing overruled.