PATTERSON v HALTERMAN

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No. 12238 I N THE SUPREME COURT O THE STATE O MONTANA F F 1972 . JOHN F PATTERSON, J R . , SPECIAL ADMINISTRATOR O T E ESTATE O F H F C A A M. MODLIN, Deceased, LR P l a i n t i f f and Respondent, ANNA K. H L E M N and T E FIRST ATR A H F NATIONAT, BANK O MISSOULA, MONTANA, Defendants and Appellants. Appeal from: D i s t r i c t Court of t h e Fourth J u d i c i a l D i s t r i c t , Honorable J a c k L. Green, Judge p r e s i d i n g . Counsel of Record: For Appellants : Worden, Thane, Haines and Williams, Missoula, Hontana. Shelton C. Williams argued, Missoula, Montana.. For Respondent: Mulroney , Delaney and Dalby , Missoula , Montana. Dexter Delaney argued, Missoula, Montana. Boone, Karlberg and Haddon, Missoula, Montana. Submitted: Decided: F i l e d :JAN 2 19T3 November 30, 1972 JAN 2 4 1973 %re Justice Gene R , Daly d e l i v e r e d t h e Opinion of t h e Court, This a c t i o n was commenced i n t h e d i s t r i c t c o u r t of Missoula Counry by John F, P a t t e r s o n , Jr., a p r a c t i c i n g a t t o r n e y , a c t i n g i n h i s own behalf i n h i s c a p a c i t y a s s p e c i a l a d m i n i s t r a t o r of t h e e s c a t e of C l a r a M. Modlin, deceased. The s u i t j o i n e d Anna K. Yal-terman and t h e F i r s t N a t i o n a l Bank of Missoula a s p a r t i e s defendHowever, t h e s t a t u s of t h e bank was t h a t of a s t a k e h o l d e r mt. with no i n t e r e s t i n t h e outcome and i t d i d n o t p a r t i c i p a t e i n t h e trial. l ~ The t r i a l c o u r t , s i t t i n g w i t h o u t a j u r y , e n t e r e d f i n d i n g s f a c t , c o n c l u s i o n s of law and judgment f f o r t h e p l a i n t i f f , which h e l d t h a t defendant Anna K. Halterman had no c l a i m i n a p a r t i c u l a r savings account and a c e r t i f i c a t e of d e p o s i t and d i r e c t e d defendant 5 i r s t National Bank of Missoula t o pay over t h e drld c e r t i f i c a t e of d e p o s i t t o t h e e s t a t e . s a v i n g s account From t h e judgment, t h e c o u r t ' s d e n i a l of h e r motion t o amend t h e f i n d i n g s of f a c t and cunclusions of law, and h e r motion f o r a new t r i a l , Mrs. Halterman appeals. Undisputed f a c t s appearing i n t h e r e c o r d a r e t h a t C l a r a Modlin d i e d on October 26, 1968, a t t h e age of 88 y e a r s . O March 22, 1968, n about seven months p r i o r t o hew d e a t h , Mrs. Halterman was named a s i o i n t t e n a n t w i t h Clara Modlin i n a s a v i n g s account w i t h a b a l a n c e a t that t i m e of approximately $1,065.89 and i n a c e r t i f i c a t e of d e p o s i t wit11 a balance a t t h a t time of approxi.mately $5,523.62, both 2 E which were and a r e h e l d by t h e F i r s t N a t i o n a l Bank of Missoula. About t h r e e y e a r s p r i o r t o h e r d e a t h , Clara Modlin executed d will which was admitted t o p r o b a t e and under which John F. Pat- t e r s o n , J r , was appointed s p e c i a l a d m i n i s t r a t o r . M r s . Halterman, n i e c e of Clara Modlin, was n o t a b e n e f i c i a r y under t h e w i l l . The w i l l d i v i d e d t h e e n t i r e e s t a t e between M r . Glen Boyer, husband o f a predeceased daughter, and two granddaughters, c h i l d r e n of Glen Boyer. P l a i n t i f f t e s t i f i e d h e had a s s i s t e d C l a r a Modlin i n two t r a n s a c t i o n s concerning h e r p r o p e r t y . On August 1 8 , 1967, he drew a deed which c r e a t e d a j o i n t tenancy o f Clara Xodlin and Glen Boyer On A p r i l 7 , 1968, he helped h e r i n h e r home, worth about $14,000, complete a change of b e n e f i c i a r y form which d e s i g n a t e d Glen Boyer b e n e f i c i a r y of two l i f e i n s u r a n c e p o l i c i e s owned by Clara Modlin, amounting t o about $500. During t h e two y e a r p e r i o d preceding h e r d e a t h , Clara Modlin w a s i n a s t a t e of d e c l i n i n g h e a l t h , She r e s i d e d a t h e r home a s long a s she was a b l e then e n t e r e d S t . p a t r i c k ' s H o s p i t a l i n Missoula. She l a t e r s p e n t t e n months t o a y e a r i n t h e H i l l s i d e Yanor Nursing Home i n Missoula, and was f i n a l l y a g a i n admitted t o S t . P a t r i c k ' s H o s p i t a l , where she d i e d , X r s , Halterman t e s t i f i e d t h a t t h e j o i n t tenancy t r a n s a c t i o n of March 2 2 , 1968 between she and Clara Modlin was n o t made pursuant t o any p r e e x i s t i n g d e b t o r any e x p r e s s o r implied c o n t r a c t f o r s e r v i c e s rendered o r goods d e l i v e r e d . The d i s p u t e d f a c t s , which a r e t h e c r u x of t h e l a w s u i t and a p p e a l , concern (1) whether on March 22, 1968, Clara Modlin had t h e mental c a p a c i t y t o comprehend t h e n a t u r e of t h e t r a n s a c t i o n e n t e r i n g Mrs. alterm man's name on t h e two bank accounts a s j o i n t t e n a n t ; ( 2 ) whether C l a r a Modlin was c a p a b l e of and formed an i n t e n t i o n t o make a g i f t t o Mrs. Halterman, and (3) whether Mrs. Halterman had e x e r t e d undue i n f l u e n c e on Clara Modlin. Two assignments of e r r o r involve whether t h e p l a i n t i f f ' s o r i g i n a l q u e s t i o n s of law: ( a ) complaint s t a t e d a c l a i m e n t i t l i n g him t o r e l i e f ; and (b) whether t h e t r i a l judge e r r e d i n excluding c e r t a i n evidence o f f e r e d by defendant. The remaining assignments of e r r o r r e l a t e t o t h e t h r e e i s s u e s of f a c t , Considering f i r s t t h e law i s s u e s , we f i n d t h a t t h e c a s e s c i t e d by defendant i n support o f h e r motion t o d i s m i s s t h e o r i g i n a l com- p l a i n t p r e d a t e t h e adoption of t h e r u l e s of c i v i l procedure i n e f f e c t a t t h e time t h e complaint was f i l e d . The o r i g i n a l complaint was no model of draftsmanship, b u t i t does n o t invoke any s e r i o u s due process q u e s t i o n of l a c k of n o t i c e t o defendants. was amended t o conform t o t h e proof a t t r i a l . The complaint The excluded evidence which defendant assigns as error con- cerns statements made by Clara Modlin to Mrs. Halterman and a Mrs. Stevenson, as to Clara Modlin's attitude toward her grand- daughters and her intention regarding the disposition of her property. We find the trial judge acted within his discretion in excluding the offered testimony on various grounds. The pro- posed testimony of both witnesses falls squarely under the hearsay rule stated in section 93-401-2, R.C.M. 1947. The proposed testi- mony of Mrs. Halterman falls squarely under the dead man statute R.C.M. section 93-701-3,11947. The proposed testimony had questionable probative value, in light of the preceding evidence concerning Clara ~odlin'ssenility at the time the statements were made. Considering now the fact issues, we find the transaction which placed Mrs. t alter man's name on the two bank deposits to be valid and binding must meet the legal requirements of a gift inter vivos. Section 67-1706, R.C.M. 1947, states: 1 ' A gift is a transfer of personal property made voluntarily, and without consideration.1 1 In In re Brown's Estate, 122 Mont. 451, 455, 206 P.2d 816, this Court stated: II To constitute a gift of a chattel there must be ( ) an intention on the part of the donor to make 1 the gift; (2) delivery by the donor of the subject matter of the gift, and (3) acceptance of the gift by the donee. 1 1 See also: State Board of Equalization v. Cole, 122 Mont. 9, 195 P.2d 989; Fender v. Foust, 82 Mont. 73, 265 P. 15. 1 It is requirement ( ) from Brown which is determinative here, If by reason of old age inducing senility, illness inducing in- competence, undue influence, or a combination of these factors, Clara Modlin did not have a rational, independent intention to make a gift, i.e. the requisite donative intent, there was no gift. 38 C.J.S. Gifts $ 5 1 3 , 3 4 , explain the requirement in more detail: 5 13 in pertinent part states: I 1 It is essential to the validity of a gift that the donor shall have sufficient mental capacity to make a gift; a gift by a donor mentally incompetent is void. 11 5 34 in pertinent part states: "Freedom of will on the part of the donor is essential to the validity of a gift, and where the donor has been induced to make a gift through fraud, duress or undue influence the gift may be set aside. In determining whether fraud or undue influence invalidating a gift exists, the courts will look to the special facts of each case. The court must consider the situation of the parties, the conditions that surround them, the attitude that they occupy toward each other, and the influences that control their actions. Thus, in determining whether undue influence entered into a transfer by gift, consideration will be given to the nature of the relationship between the donor and donee, the donor's susceptibility to undue i n fluence, and the reasonableness of the transfer in light of the existing circumstances," (Emphasis added). Ar trial, plaintiff introduced four witnesses to testify con- cerning Clara ~odlin's state of health and mental capability during the general time span in which the joint tenancy transaction was carried out. The witnesses were: the plaintiff John F. Patterson, Jr., Clara ~odlin'sattorney for many years; Dr. Gerald A. Diettert, M.D., Clara ~odlin'sphysician for the five years preceding her death; Geraldine A. OIConnor, a registered nurse at the Hillside ) a n r Nursing Home; and J. Lynn Kellogg, a recently retired fao director of the First National Bank of Missoula, who for many years was acquainted with Clara Modlin in his professional capacity. Defendant introduced six witnesses for the same purpose: Sarah Stephenson, Kate J. Rasmussen, Wes Waldbillig, Ruth Bloom, and Theodora T. Reed, all long time personal friends of Clara Nodlin; and Mrs. Halterman, the defendant. A seventh witness, Wallace E. Small of the First National Banlc of Missoula, testified basically about bank policy and his observations of the joint tenancy transactions, The testimony of plaintiff's and defendant's witnesses concerning Clara ~odlin'sphysical and mental condition, her susceptibility to influence, and the question of whether she had been influenced, was in conflict. This, as we have stated, is the determinative issue of the case. The burden of proof f o r undue i n f l u e n c e and t h e b a s i c elements f o r t h e c o u r t ' s c o n s i d e r a t i o n i n determining t h e f a c t of undue i n f l u e n c e were s t a t e d by t h i s Court i n I n r e E s t a t e of Mack G. H a l l , Mont . -9 492 P.2d 1388, 1394, 29 St,Rep. 53,62, quoting from E s t a t e of Maricich, 145 Mont. 146, 161, 400 P.2d 873: 11 1 The law i n t h e cases concerning undue i n f l u e n c e places upon t h e c o n t e s t a n t t h e burden of proof i n showing s u b s t a n t i a l evidence of undue influence. I n determining t h i s i s s u e on undue i n f l u e n c e we may consider : ' I ' (1) Confidential r e l a t i o n s h i p of t h e person attempting t o i n f l u e n c e t h e t e s t a t o r [donor]; The physical condition of t h e t e s t a t o r "'(2) [donor] a s i t a f f e c t s h i s a b i l i t y t o withstand t h e i n fluence ; "' ( 3 ) The mental condition of t h e t e s t a t o r [donor] a s i t a f f e c t s h i s a b i l i t y t o withstand i n f l u e n c e ; " ' ( 4 ) The unnaturalness of t h e d i s p o s i t i o n a s i t r e l a t e s t o showing an unbalanced mind o r a mind e a s i l y s u s c e p t i b l e t o undue i n f l u e n c e ; and "' (5) The demands and i m p o r t u n i t i e s a s they may a f f e c t t h e p a r t i c u l a r t e s t a t o r [donor ] t a k i n g i n t o c o n s i d e r a t i o n t h e time, t h e place, and a l l t h e surrounding circumstances I I' . Although i n H a l l t h i s expression of l e g a l p r i n c i p l e s i s d i r e c t e d toward an a l l e g e d undue i n f l u e n c e on a t e s t a t o r i n making a w i l l , t h e same b a s i c c r i t e r i a apply t o an a l l e g e d undue i n f l u e n c e on a donor i n making a g i f t , and they a r e p a r t i c u l a r l y p e r t i n e n t i n t h e i n s t a n t c a s e , s i n c e t h e n a t u r e of t h e a l l e g e d g i f t was e s s e n t i a l l y testamentary i n p a r t i a l l y d e f e a t i n g t h e e f f e c t of t h e donor's w i l l . Reviewing, then, t h e evidence a s i t r e l a t e s t o t h e v a r i o u s - c r i t e r i a enumerated i n H a l l , t h e record d i s c l o s e s t h a t Mrs. Halterman was a c l o s e f r i e n d and blood r e l a t i v e of Clara Modlin. In the opinion of h e r physician, Clara Modlin s u f f e r e d from c e r e b r a l arteriosclerosis and was d i s o r i e n t e d and f o r g e t f u l . I n t h e opinion of h e r n u r s e , she was more s u s c e p t i b l e t o suggestion than t h e average h e a l t h y person. The unnatural e f f e c t of t h i s j o i n t tenancy t r a n s a c t i o n was t o p a r t i a l l y d e f e a t t h e provisions of h e r w i l l toward c l o s e r r e l a t i v e s . Mrs. Halterman i n a l e t t e r which was introduced a t t r i a l , and t e s t i f i e d t o a t t r i a l , suggested t o Clara Modlin t h a t "she put someone e l s e ' s name on h e r savings account". / It i s r e a d i l y a p p a r e n t t h a t on some m a t e r i a l p o i n t s t h e testimony of p l a i n t i f f ' s and d e f e n d a n t ' s w i t n e s s e s was c o n t r a dictory. It a l s o a p p e a r s t h e r e was an i n h e r e n t c o n t r a d i c t i o n i n t h e p l a i n t i f f ' s own testimony r e g a r d i n g C l a r a Modlin's competency on t h e d a t e s of t h e two j o i n t tenancy t r a n s a c t i o n s i n which h e participated. However, we f i n d t h e r e was ample evidence, i f b e l i e v e d , t h a t would f u l l y s u p p o r t t h e c o u r t ' s f i n d i n g s of f a c t . I n Stromberg v. Seaton Ranch Company, Mont . , 502 P.2d 41,48, 29 St.Rep. 848, t h i s Court s t a t e d t h e p e r t i n e n t r u l e of a p p e a l and e r r o r which must be a p p l i e d t o t h e f a c t u a l i s s u e s r a i s e d on a p p e a l : "As i s i n d i c a t e d i n t h e summary of t h e f a c t s , t h e r e was an unusual amount of evidence p r e s e n t e d t o t h e t r i a l judge which r e s u l t e d i n numerous c o n f l i c t s i n t h e evidence. He was t h e one who had t h e o n l y opport u n i t y t o s e e and h e a r a l l w i t n e s s e s . Each p a r t y makes a s t r o n g argument t h a t t h e s e f a c t s and c i r c u m s t a n c e s f a v o r h i s p o s i t i o n . Yet, a s h a s been s t a t e d by t h i s Court t o o many times t o r e q u i r e c i t a t i o n , i t i s n o t t h i s C o u r t ' s p r o v i n c e t o review t h e r e c o r d of t h e t r i a l c o u r t t o determine whether o r n o t we a g r e e w i t h t h e c o n c l u s i o n s r e a c h e d , i f supported by t h e evidence. W e must i n d u l g e t h e presumption t h a t t h e judgment of t h r d i s t r i c t c o u r t i s c o r r e c t and w i l l n o t b e d i s t u r b e d u n l e s s the - r e i s a c l e a r preponderance of e v i d e n c e a g a i n s t i t when viewed i n t h e l i g h t most f a v o r a b l e t o t h e p r e v a i l i n g p a r t y ;k 9 9 " (Emphasis added), : ; Accordingly, i n l i g h t of t h e f a c t s and i n t h e absence of a showing of a c l e a r preponderance of e v i d e n c e a g a i n s t t h e t r i a l c o u r t ' s f i n d i n g s of f a c t and c o n c l u s i o n s of law, t h e judgment of the d i s t r i c t court i s affirmed.

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