An agent is bound to act with absolute good faith toward his
principal in respect to every matter entrusted to his care and
management. In accepting a gift from his principal, he is under an
obligation to withhold no information in his possession respecting
the subject of the gift or the condition of the estate in his hands
which good faith requires to be disclosed or that may reasonably
influence the judgment of the principal in making the gift. All
transactions between them whereby the agent derives advantages
beyond legitimate compensation for his services will be
Page 129 U. S. 664
closely examined by courts of equity and set aside if there be
any ground to suppose that he has abused the confidence reposed in
him.
When the proof is conflicting upon the point of undue influence
exerted upon one making provision by deed in favor of the person
alleged to have exerted the influence, and it appears that the
contestant, having full knowledge of all the circumstances, made no
averment in his original bill of the incapacity of the grantor, and
did not raise that issue until an amended bill was filed a year
later, that fact is entitled to weight in determining the case.
When incapacity caused by drunkenness is alleged as a cause for
annulling a deed, the vital inquiry is as to the capacity of the
grantor when the deeds were executed, and not as to his capacity
when drunk.
Section 2666 of the Code of Georgia, relating to gifts made to a
guardian by a minor just after arriving at majority, does not apply
to the case of a deed or will in favor of his guardian made by a
person some years after arriving at his majority; but even if it
did apply, such a deed would be good if made with a full knowledge
of the facts and without any misrepresentation or suppression of
material facts by the guardian.
As the record in this case discloses nothing impeaching the
final settlement made between the guardian and his ward, § 1847 of
the Code of Georgia does not apply to it.
Section 3177 of the Code of Georgia, relating to gifts from one
party to another where there are confidential relations arising
from nature or created by law or resulting from contracts where one
party is so situated as to exercise a controlling influence over
the other, is only a statement of a general rule governing all
courts of equity.
Bill in equity. Decree dismissing the bill, from which
complainant appealed. The case is stated in the opinion.
MR. JUSTICE HARLAN delivered the opinion of the Court.
This suit was brought by the widow of the late James A. Ralston,
Jr., to obtain a decree canceling certain deeds of gift of real
estate executed by her husband to the appellee, George B. Turpin,
as trustee for his children. The original bill, filed August 7,
1883, sought this relief upon the ground that Turpin obtained the
execution of the deeds by undue influence exercised by him over the
grantor while the latter was in declining health, with a
constitution seriously impaired by dissipation
Page 129 U. S. 665
and by the suppression of facts that were within his knowledge
and which, in view of his relations to the grantor, he was under
obligation to disclose. In an amended bill, filed May 6, 1884, the
grounds for cancellation were enlarged by an averment that at the
time of signing the deeds, the grantor was mentally incapable of
comprehending and did not comprehend what he was doing, and that
plaintiff gave her apparent consent to their execution because,
knowing Turpin's power
"over her husband, she feared to offend him, lest he might
either work a separation between her and her said husband or render
their relations with each other insecure and unhappy,"
and that "she and her husband were both overreached and deceived
by the said Turpin, and yielded because they were in effect
powerless to resist." By a subsequent amendment made May 29, 1885,
the plaintiff alleged as to the first deed that neither she nor her
husband knew at the time of its execution whether it was a will or
a deed, or what its legal effect was, and that both of them were so
completely under Turpin's influence and so anxious to conciliate
and gratify him that they did not stop to consider its character or
effect, and had no opportunity to consult counsel with reference
thereto. The answer put in issue all the material averments of the
bill and amended bills.
The circuit court dismissed the suit, placing its decision upon
two grounds: first, that when the deeds were made the grantor was
capable of disposing of his property as he thought proper; second,
that its disposition was in conformity with the long settled and
cherished purpose of his life, and was not brought about by a
betrayal of trust or any improper influence upon the part of the
grantee. 25 F. 7.
The relations between the grantor and Turpin will appear from
the following facts, some of which are conceded, while the others
are established by a clear preponderance of evidence.
James A. Ralston, Sr., died in 1864, possessed of considerable
property, principally real estate in Macon, Georgia, which passed
in equal parts to his widow and sole surviving child, James A.
Ralston, Jr. During the lifetime of the father, Turpin
Page 129 U. S. 666
attended to a large part of his business, and held toward him
relations of close friendship and confidence. After his death, the
management of the estate was committed by the legal representative
of the father to Turpin, who collected rents, leased property, and
directed necessary repairs. In 1867, the son, then about nineteen
years of age and having the right, under the laws of Georgia, to
select his guardian, chose Turpin, without his solicitation, for
that position. The latter qualified on the second of August, 1867.
In the same year, Mrs. Ralston, the mother, intermarried with Dr.
Bozeman, of New York.
On the 3d of May, 1869, Turpin, having made a final settlement
of his accounts as guardian before the proper court and turned over
to his ward, who had then reached his majority, the property and
assets belonging to the latter, received from that court a formal
letter discharging him from the guardianship. Immediately after the
relations of guardian and ward were thus severed, Turpin and his
partner, Ogden, composing the firm of Turpin & Ogden, were
employed by young Ralston to take charge of his real estate and to
collect rents, make repairs, etc. In addition to the relations
between him and Turpin arising out of this employment, there
existed between them a warm personal affection.
In 1873, the mother of Ralston died, leaving a will by which a
considerable part of her estate was devised to him, and this also
was committed by him to the management of Turpin & Ogden. By
her will, Turpin was made executor. He qualified, and in 1878,
having fully administered her estate, was discharged as executor.
In this connection, it may be stated that Mrs. Bozeman told Turpin
that he was not remembered in her will because "Jimmie had or would
do so in his," she observing at the time, that he had been a good
friend to the family. This is stated by Turpin in his deposition,
and there is no reason to doubt the truth of his statement.
On the 11th of May, 1874, Ralston being about twenty-six years
of age and then competent to dispose of his property, and having an
estate yielding him an annual income of about $15,000, made at
Macon, Georgia, and without suggestion by
Page 129 U. S. 667
Turpin, his will and testament, whereby he directed that a
monument suitable to his condition and circumstances of life, be
erected over his grave, and requested that his "friend, George B.
Turpin, and his children after him," would see to it that his
"monument and grave shall always during their lives be suitably
kept and cared for." By that will he also directed that after the
payment of his debts, his entire estate be divided into two equal
parts, one part to go to George B. Turpin, in trust for the sole
benefit and use of the testator's aunt, Mrs. Laura B. Smith, and
her children, James, Annie, Daisy, and Charles, during her natural
life, and after her death for the joint and sole use and benefit of
those children and their respective descendants, during the life of
the child longest surviving, and, upon the death of the last
survivor, to the heirs at law of his aunt. The other part was
devised to Turpin for the sole benefit and use of himself and
children (born, and to be born) for and during his life, the trust
to cease at his death and the property to vest in his children then
in life, the descendants of any deceased child to share in the
division
per stirpes. Turpin and Ogden were constituted
his executors.
On the 15th of December, 1879, Ralston, then nearly thirty-two
years of age, made at the City of New York a second will, revoking
all other wills, and devising to Turpin, "in trust for his
children, William C. Turpin, Frank M. Turpin, George R. Turpin,
Lizzie Turpin, and Walter H. Turpin," the building at the corner of
Cherry and Third Streets in Macon, known as "Ralston Hall,"
together with the adjoining lots 66, 68, and 70, subject only to
such liens and encumbrances as might be created thereon during his
lifetime. This property is variously estimated to have been worth
between $40,000 and $50,000, and constituted at that time,
according to the weight of the evidence, less than one-half in
value of his estate. He then devised to "Ida Blanchard, by which
name she is now known, and whose original name was Sarah or Sally
J. Harten, formerly of Philadelphia, Pa." four stores in Macon, and
all the watches and jewelry of which he should die possessed. To
his aunt, Mrs. Smith, during her natural life, and at her death to
her children in fee simple, he bequeathed his undivided
one-half
Page 129 U. S. 668
interest in the Ralston mansion house in Macon. To his
grandmother, during her natural life he devised all of the family
pictures of which he should die possessed, and at her death
"to my friend George B. Turpin, of Macon, Ga., having enjoyed
his friendship for a long course of years. I feel that they will be
safe and kept intact in his hands."
To Ogden he devised all of the household furniture in the
Ralston mansion house.
It is here necessary to state that the plaintiff, under the name
of Ida Blanchard, went to Macon in 1869 and lived continuously in
houses of public prostitution. While prosecuting that mode of life,
young Ralston made her acquaintance, and for several years, without
intermission, and much to the grief of relatives and friends, held
improper relations with her. They often quarreled and had drunken
broils with each other in different places of bad repute where they
met. During her residence in Macon, Turpin used every effort to
induce Ralston to abandon the reckless and immoral life he was
leading, and to cease the use of strong drink. But his efforts and
warnings were unattended with success except for brief intervals.
No change occurred in the relations of Ralston and the plaintiff
while in Macon. She states that he intended to marry her as far
back as 1876. In the fall of 1879, they went to New York, and on
the 23d of January, 1880, within less than three weeks after the
will of 1879 was made, they were married. The fact of their
marriage was not known in Macon until some months afterwards. In
April, 1880, they removed to Stamford, Conn. In the summer of that
year, Turpin, while at Saratoga Springs, received information of
the marriage, and that they were living in Stamford. He went to the
latter place in August, 1880, to ascertain if such were the fact,
and, if it were, to inform Ralston that his marriage had, by the
laws of Georgia, revoked the will made in favor of Turpin's
children, and to suggest the propriety, if he still desired to do
something for them, of making a formal deed for their benefit.
There is some conflict between the statements of the plaintiff and
Turpin as to what occurred at Stamford. But it is evident that
nothing was said or done by Turpin on that occasion calculated to
influence
Page 129 U. S. 669
Ralston or his wife to take any course not entirely in
accordance with their wishes. Nor is there any ground to suppose
that the plaintiff acquiesced in what her husband did from fear
that Turpin might expose her course of life or effect a separation
between herself and husband. It does not appear that she stood in
fear of anybody. It is clearly shown that as the result of the
interview at Stamford, Ralston and wife went to New York, and,
before a commissioner of the State of Georgia, freely and
voluntarily executed and acknowledged a deed, in fee simple, dated
August 26, 1880, conveying to Turpin, as trustee for his children,
William, Frank George, Lizzie, and Walter, the identical property
devised to him as trustee by the will of 1879, subject, however, to
the condition that Ralston should receive annually its rents, uses,
and profits, after deducting taxes and insurance thereon, and
expenses for collecting the rents and making repairs, and subject
to a mortgage of $5,000 made by Ralston to Ross, on one of the
stores conveyed to Turpin as trustee. Two days afterwards, August
28, 1880, another deed, covering the same property and containing
the same conditions, was executed and acknowledged by Ralston, the
first deed having been discovered, or being supposed, to be
informal in some respects. On the day of the execution of each of
these deeds, the plaintiff executed and acknowledged, before the
same commissioner, a separate instrument in writing stating that
she freely and voluntarily ratified and confirmed the deed made by
her husband.
In the year 1881, Turpin, having been advised by counsel that
the former deeds for the benefit of his children were defective, in
that their clauses, or some of them, were of a testamentary
character, enclosed another deed for Ralston to execute, which the
latter did on the 19th of April, 1881, the plaintiff executing on
the same day a separate writing ratifying and confirming that deed,
and renouncing and conveying to the trustee for the uses therein
named all her right of dower and other interests in the property
conveyed. This deed conveyed to Turpin in trust for his children
named in those instruments the same property as that described in
the will of 1879, and in the deeds of August 26, 1880, and August
28, 1880.
Page 129 U. S. 670
In this connection, it may be stated that prior to the making of
the will of 1879, Ralston became unfriendly to the husband of one
of the daughters of Turpin, and for that reason she was omitted
from that will as well as from all the deeds subsequently executed.
He died at Montclair, New Jersey, on the 4th of July, 1883.
We must examine each of the principal grounds upon which the
plaintiff bases her claim for relief, for if, as contended, Ralston
was in such condition, mentally and physically, when the deeds of
1880 and 1881 were executed that he could not or did not comprehend
the nature of the transactions, or if their execution was obtained
by means of undue influence exercised over him by Turpin, in either
case the plaintiff would be entitled to relief. It would be granted
upon the principle laid down in
Harding v.
Handy, 11 Wheat. 103,
24 U. S. 125,
which was a suit by heirs at law to set aside conveyances obtained
from their ancestor. Chief Justice Marshall there said:
"If these deeds were obtained by the exercise of undue influence
over a man whose mind had ceased to be the safe guide of his
actions, it is against conscience for him who has obtained them to
derive any advantage from them. It is the peculiar province of a
court of conscience to set them aside."
Allore v. Jewell, 94 U. S. 506,
94 U. S. 511.
On the contrary, if it does not appear that he was incapable, by
reason of physical or mental debility, of exercising a
discriminating judgment in respect to the disposition of his
property, or was driven to make the gifts in question against his
own wishes, and under some influence that he was unable, no matter
from what cause, to resist, the relief asked must be denied. "The
undue influence for which a will or deed will be annulled," this
Court said in
Conley v. Nailor, 118 U.
S. 127,
118 U. S. 134,
"must be such as that the party making it has no free will, but
stands
in vinculis." In a case of conflicting proof, as
here, it is a circumstance not without weight that the plaintiff,
who, more than anyone else, was cognizant of the grantor's
condition during the entire period in question, makes no averment
in the original bill of the husband's want of capacity to dispose
of his property.
Page 129 U. S. 671
The averment was that when the deeds were made he was in a
declining state of health, and his constitution greatly weakened by
dissipation. Such a condition does not, however, necessarily imply
an absence of sufficient capacity to dispose of property by gift or
otherwise. Nearly a year passed after the institution of this suit
before she distinctly made the issue that the deeds were void for
the want of capacity upon the part of her husband to make them. The
proof does show beyond question -- indeed, it is admitted -- that
for many years prior to the execution of the deeds, and
thenceforward until his death, in 1883, he was intemperate in his
use of ardent spirits. He was often intoxicated, and when in that
condition was incapacitated to transact business. But for many
years prior to his death, there were intervals, some of them quite
long, during which he avoided excessive indulgence in strong drink.
His capacity when sober to transact business is abundantly shown.
The vital inquiry is as to his capacity not when he was
intoxicated, but when the deeds were executed.
Conley v.
Nailor, 118 U. S. 127,
118 U. S. 131.
The evidence leaves no room to doubt that at those particular dates
he fully comprehended the character of the deeds. If it
satisfactorily appeared that, from habitual dissipation or other
cause, he was in such enfeebled condition of mind or body
immediately before or immediately after the dates of the respective
deeds as to render him incompetent to transact business, the
presumption might arise that he was unable at the time of their
execution, to understand what he was doing, and thus the burden of
proof as to his capacity at those particular dates, to dispose of
his property, be imposed upon the grantee. Even in that view, the
plaintiff would not be entitled to a decree canceling the deeds on
the ground of the grantor's mental incapacity, for it appears that
on each occasion when the respective deeds were executed he was
perfectly sober, and possessed sufficient capacity to dispose of
his property with an intelligent understanding of what he was
doing. He knew at the time that each deed conveyed certain property
to Turpin in trust for the children named, and that they were
substantially in execution of his settled purpose to make
provision
Page 129 U. S. 672
out of his estate for the children of the man who had been for
years the fast friend and confidential adviser of his parents and
of himself. That purpose was based upon motives entirely creditable
to him, and, so far as the record discloses, was originally formed
without any suggestion by Turpin or his children. Prior to his
leaving Macon in 1879 and before making the will of that year, he
often said to companions or acquaintances that he intended to make,
or had made, such provision out of his estate.
If he executed the deeds of 1880 without knowing what he was
doing, he would naturally at some subsequent time, have expressed
dissatisfaction with what he had done and taken steps to have them
set aside. But no expression of dissatisfaction was ever made by
him. On the contrary, upon receiving the deed of 1881, accompanied
by the request that he would execute it, he promptly complied with
that request and returned the deed duly acknowledged by himself and
wife to Turpin. His correspondence with the latter during 1880 and
1881 furnishes persuasive, if not conclusive, evidence that he had
accurate knowledge of the condition of his property and its
management by Turpin & Ogden, under the direction of Turpin,
and was in the enjoyment of good health. On July 28, 1880, within
less than a month before making the first deed of gift, he wrote to
Turpin from Stamford, Connecticut, stating, among other things,
that he was "enjoying good health." On April 18, 1881, the day
preceding the last deed of gift, he wrote from the same place to
Turpin: "My health is splendid, but Ida has been ill all winter,
and is so still." The body of each of these letters is in the
handwriting of the complainant. They are inconsistent with her
present contention that not only at the time but both before and
after the deeds of gift were executed, her husband's mind and body
had been so wrecked by dissipation that he did not intelligently
comprehend what he did or possess sufficient will to resist the
importunities or persuasion of others. To these considerations we
may add the significant fact that in no one of the letters that
passed between Turpin and the plaintiff after the latter left Macon
is there any intimation that she disapproved of the provision
Page 129 U. S. 673
made for Turpin's children. We concur entirely with the
conclusion reached upon this issue by the court below.
It remains to consider whether the deeds of gift were the result
of undue influence exercised by Turpin over Ralston. In discussing
this question, counsel for the plaintiff call attention to § 2666
of the Code of Georgia, which provides that
"A gift by any person just arrived at majority, or otherwise
peculiarly subject to be affected by such influences, to his
parent, guardian, trustee, attorney, or other person standing in a
similar relationship of confidence, shall be scrutinized with great
jealously, and, upon the slightest evidence of persuasion or
influence toward this object, shall be declared void at the
instance of the donor or his legal representative at any time
within five years after the making of such gift."
We do not perceive that this provision has any direct bearing
upon this case. There was here no gift by the ward just after he
arrived at his majority. If the deeds in question had been made
immediately upon Ralston's arriving at full age, or shortly after
he came into possession of his estate, they would, in view of the
then recent relation of guardian and ward, have been more difficult
to sustain. Still they would have been sustained if it had appeared
that they were freely and voluntarily made, upon full knowledge of
the facts, without misrepresentation or suppression of material
facts by the guardian. In
Hylton v. Hylton, 2 Ves.Sen.
547, Lord Chancellor Hardwicke said:
"Undoubtedly if after the ward or
cestui que trust
comes of age, and after actually put into possession of the estate,
he thinks fit, when
sui juris and at liberty, to grant
that or any other reasonable grant by way of reward for care and
trouble, when done with eyes open, the court could never set that
aside; but the court guards against doing it at the very time of
accounting and delivering up the estate, as the terms, for the
court will not suffer them to make that the terms of doing their
duty."
In the case before us, more than eleven years elapsed after
Ralston attained full age, and after Turpin finally settled his
accounts as guardian, before the first of the deeds of gift was
made.
In respect to that settlement, it may be observed that by
Page 129 U. S. 674
section 1847 of the Georgia Code it is declared that
"No final settlement made between guardian and ward can bar the
ward, at any time within four years thereafter, from calling the
guardian to a settlement of his account, unless it is made to
appear that the same was made after a full exhibit of all the
guardian's accounts and with a full knowledge by the ward of his
legal rights."
Nothing is disclosed by the record that impeaches the entire
accuracy of the guardian's final settlement; nothing that suggests
any want of intelligence or integrity in his administration of the
ward's estate; nothing to show that he ever realized anything from
the position of guardian, except such compensation as the law
permitted him to receive. When, therefore, the relation of guardian
and ward was severed, Ralston had every reason to confide in
Turpin's integrity, and to feel grateful, not only for his uniform
kindness, but for faithful devotion to his interests.
But it is contended that the relations subsequently existing
between them were such as are described in § 3177 of the Georgia
Code, which declares that
"Any relations shall be deemed confidential arising from nature
or created by law, or resulting from contracts, where one party is
so situated as to exercise a controlling influence over the will,
conduct, and interest of another, or where, from similar relations
of mutual confidence, the law requires the utmost good faith, such
as partners, principal and agent,"
etc. Undoubtedly the relation of principal and agent existed
between Ralston and Turpin after the relation of guardian and ward
had been severed, and up to the death of Ralston. The section of
the Georgia Code quoted is an expression of a general rule that has
always governed courts of equity. The agent is bound to act with
absolute good faith toward the principal in respect to every matter
entrusted to his care and management. In accepting a gift from his
principal, he is under an obligation to withhold no information in
his possession respecting the subject of the gift, or the condition
of the estate in his hands, which good faith requires to be
disclosed, or that may reasonably influence the judgment of the
principal in making the gift. All transactions between them whereby
the agent derives advantages beyond
Page 129 U. S. 675
legitimate compensation for his services will be closely
examined by courts of equity, and set aside if there be any ground
to suppose that he has abused the confidence reposed in him. It is
for the common security of mankind, Mr. Justice Story well says,
"that gifts procured by agents and purchases made by them from
their principals should be scrutinized with a close and vigilant
suspicion." Story's Eq.Jur. § 315. An instructive case upon this
point is
Harris v. Tremenheere, 15 Ves. 34, 38, which was
a suit to cancel leases to a party who at the time held the
relation of steward, agent, and attorney to the lessor. Some of the
leases were pure gifts by the employer. Lord Chancellor Eldon
disclaimed any jurisdiction to annul such gifts when based upon the
generosity of the donor, or to weigh the value or amount of the
consideration, as if it had been the subject of barter, but said
that if he could find
"in the answer or the evidence the slightest hint that the
defendant had laid before his employer an account of the value of
the premises that was not perfectly accurate, he would set aside
such leases."
He would do this, he said, without regard to the intention of
the parties
"upon the general ground that the principal would never be safe
if the agent could take a gift from him upon a representation that
was not most accurate and precise."
We do not intend to qualify or weaken in any degree these
salutary doctrines. Their recognition, however, does not determine
the present case, unless it be held that a principal cannot, under
any circumstances whatever, make a valid gift to his agent of
property committed to the latter's care or management. No such
doctrine has ever been established, nor could it be, without
impairing the natural right of an owner to make such disposition of
his property as he may think would best subserve his interest and
comfort or gratify his feelings. That Turpin held such relations,
personal and otherwise, to young Ralston as would enable him to
exercise great influence over the latter in respect to the mode in
which his property should be managed for purposes of revenue, that
Ralston trusted Turpin's judgment as to matters of business more
than the judgment of any other man, and that he had an abiding
confidence
Page 129 U. S. 676
in Turpin's integrity, as well as in his desire to protect his
interests, are conceded. But we are satisfied that Turpin did not
improperly use the influence he had over, or abuse the confidence
reposed in him by, young Ralston. It was the latter's own thought,
induced no doubt by his friendly feeling for Turpin and gratitude
for the latter's fidelity to his interests, to make some provision
for Turpin's family. This thought was first formally expressed in
the will of 1874, when he was capable of making a disposition of
his property. It was substantially repeated in the will of 1879,
drawn in precise conformity with his directions. The circumstances
detailed by the plaintiff's counsel to show that the deeds of 1880
and 1881 were procured by undue influence upon the part of Turpin
lose most of their force in view of the fact that they covered the
same property and named the same beneficiaries that are described
in the will of 1879. That Turpin caused the first deed to be
prepared and requested Ralston to execute it are facts of but
little weight. Turpin had been informed of the will of 1879, and it
was his right, if not his duty to his children, to inform Ralston
that his marriage had revoked that will, and to suggest that if he
was so minded, the execution of a deed was an appropriate mode to
give effect to his intention in respect to those children. Nor was
the presence in Stamford, when the deeds of 1880 were executed, of
Ogden, the partner of Turpin, a suspicious circumstance. The
correspondence between Ralston and Turpin prior to that time shows
that the former was aware of Ogden's purpose to visit the North
during the summer of 1880, and desired Ogden to visit him at
Stamford.
Upon a careful examination of the record, we concur with the
court below in holding that the plaintiff has failed to show that
the deeds of 1880 and 1881 were obtained by undue influence. On the
contrary, it appears by the great preponderance of evidence (to
state the case made by the defendants in no stronger language)
that, although their execution may have been induced, not
unnaturally, by feelings of friendship for and gratitude to the
defendant Turpin, the grantor acted upon his own independent,
deliberate judgment, with full
Page 129 U. S. 677
knowledge of the nature and effect of the deeds. It was for the
donor, who had sufficient capacity to take a survey of his estate
and to dispose of it according to an intelligent fixed purpose of
his bounty.
In respect to the allegation that Turpin suppressed facts
touching the condition of Ralston's estates, as affected by the
claim of Mrs. Smith, it is sufficient to say that it is not
sustained by the proof.
Other facts than those we have mentioned are disclosed by the
record, and other questions were discussed at the bar, but as they
do not in our judgment materially affect the decision of the case,
we need not specially refer to them.
Decree affirmed.