120 Me. 483 | Me. | 1921
In the year 1908 the defendant, Hollis M. Shaw, first became acquainted with two aged sisters Allura M. Stanley, since deceased, and Eliza J. Stanley represented in this litigation by a
Shaw, who was a bond salesman, sold to the sisters $8,500 in bonds of a Farmington Corporation, the value of which is not questioned. As time went on the acquaintance thus formed became closer and Shaw came to be implicitly trusted by the aged ladies and to be their sole adviser and business agent.
In the year 1911 he organized a corporation called The Dirigo Power Co. and attempted to develop a hydro-electric power at Union in Knox County. The Dirigo Power Co. issued bonds which at best were highly speculative, and in the end proved to be nearly worthless. Acting under Shaw’s advice the sisters exchanged $6,500 of their Farmington bonds for a like amount of the Dirigo Power Co. bonds. He then borrowed of them two thousand dollars for the Dirigo Company giving its bonds as security. They still had two thousand dollars of Farmington bonds and these were made over to Shaw without apparent consideration.
Excepting six thousand dollars which the Misses Stanley had invested in an annuity, Shaw thus acquired substantially all of their personal estate.
In 1916 they conveyed the farm to him reserving only “the right to live and have a home upon said premises in the house thereon.” A part of the farm he conveyed to Ellen Shaw, his mother, and the rest he mortgaged to secure a loan of two thousand dollars of money borrowed for his own use. He thus absorbed about all of the property which the sisters had in possession. Moreover, he discovered that they had an expectant interest in another and larger estate and prepared to acquire that.
The sisters were the sole presumptive heirs of a cousin, Benjamin, who was under guardianship, aged, demented, without issue and without testamentary capacity. Benjamin’s estate was worth something more than one hundred thousand dollars.
Shaw organized a corporation called The Inheritance Realization Co. His plan was to have this company succeed to Benjamin’s estate upon his death.
These suits are brought by the Administrator of Allura Stanley and the Conservator of Eliza’s estate for an accounting, and to set aside as fraudulent these various transfers.
The defendant, Hollis Shaw, denies that any fraud has been practiced. He claims to have acted in good faith. He says that the transfers- to him were in consideration of support and maintenance provided and to be provided by him, and that he has agreed to pay Eliza ten thousand dollars out of her brother’s one hundred and seventeen thousand dollar estate.
The three cases were heard by the Chief Justice who sustained the bills and décreed the relief prayed for. In his memorandum of decision the law applicable to the case is stated so accurately and felicitously that we cannot do better than to adopt and quote it.
“It is not claimed by the plaintiff that Mr. Shaw obtained possession of the Stanley property and rights by specific and direct false and fraudulent representations. Were such a claim made, the evidence is not sufficient to support it. But fraud treads no beaten path, and the same inequitable and disastrous results may be reached by gentler and more seductive methods.
When a fiduciary relation is found to exist between two parties whether that relation has been created by law or by the designing acts of one of the parties, especially when they are not on an equality, the opportunity for imposition and unfair advantage afforded by such relationship is so great as to render all transactions between them subject to suspicion, and when a transfer of property or property rights is made from the confiding dependent to the superior confidant
Equity throughout its broad domain performs no higher and finer service than this.”
This statement of the law is supported by many authorities among which may be cited, Thomas v. Whitney, (Ill.), 57 N. E., 808; Bingham v. Sheldon, 91 N. Y. S., 917; McCowan v. Short, (Ind.), 118 N. E., 538; Hawkes v. Lackey, 207 Mass., 424; Tate v. Williamson L. R., 2 Ch., 55; Bacon v. Soule, (Cal.), 126 Pac., 384; Story’s Equity Jurisprudence, Secs. 258-307. Bispham Principles of Equity, Sec. 238.
Not disputing the correctness of the above statement of the law, the defendant Shaw says that the existence of a fiduciary relation is not to be presumed, but must be proved, and that in this case such relation has not been established by evidence. But the fiduciary relation is overwhelmingly proved. It is established by the defendants’ own testimony.
The Chief Justice who heard the case found “that Mr. Shaw by a long continued and persistent course of conduct artfully and fraudulently gained the complete confidence of these two sisters and created such an overmastering influence that they were willing to take and did take any steps with reference to their property that he suggested.” Every reasonable presumption is in favor of the correctness of this finding of fact. Moreover, it is clear that no other conclusion could have been reached. The Stanley sisters were undoubtedly intelligent, but were aged, inexperienced, confiding and credulous. Shaw was in the prime of life, a shrewd experienced business man. The inequality between the parties could hardly have been greater. The confidence and trust reposed in him by the sisters was well nigh absolute. In dealing with them, acting for himself or his corporations, it was, of course, plainly his duty to have them seek disinterested and competent advice. He made no such suggestion. They sought no other adviser. They relied implicitly on him. A plainer case of a fiduciary relation could hardly be imagined.
Appeal dismissed.
Decree affirmed.
