Plaintiff is the daughter of an immigrant with his first wife who had come to the country and prospered greatly. She is physically disabled. A New York Family Lawyer said when she was six months of age, she was a victim of poliomyelitis. She walked in braces for most of her life. When she was at her thirties, she was able to walk without braces after extensive medical treatments, including surgery, but still required the aid of two canes. At the age of 33, she met a man on a cruise ship whom she later married. They spent most of their time in France, with frequent visits to her parents at their home in New York. She had always been supported by her father even after she got married. She and her husband were entirely supported by her father.
Sometime in 1952, plaintiff got pregnant, and because of her physical condition, the child could only be delivered by caesarean section. During this time, her father, who was then sick with diabetes, sustained a coronary thrombosis, and her husband was also seriously ill, suffering from ulcers and requiring critical surgery, with no assurance of successful outcome. A New York Custody Lawyer said the medical bills of her husband, in the past and those to come, were shouldered by her father. She was supplied with many additional facilities and aids required by reason of her physical handicaps. The impending caesarean delivery was also supposed to be financed by her father, who was himself an ill man.
On 17 January 1952, when plaintiff was at her father’s apartment in Manhattan and while her father and his wife were in Florida, she signed a certain trust indenture, at which time she sprained her ankle. However, in the summer of 1951, plaintiff had apparently been presented with a trust indenture similar, in large part, to the one that she signed in 1952. This trust, too, made unusual provisions, which in fact were invalid, for any children she might have. This draft was discussed in great detail, even being corrected in several particulars by plaintiff. Most importantly, this draft also provided for the corpus to be eventually diverted to the children of plaintiff’s sister.
On 19 November 1954, plaintiff’s father died. At that time, she had a second child, also by caesarean section. She and her enlarged family have been living on payments provided from the trust, including invasion, to some extent, of principal, and also on assets that she received under her father’s will or at his death. Until her father’s death he, concededly, supplied funds beyond the income of the trust assets, as he had done before. Her husband was then employed at a salary of $60 per week. Just about one year after her father’s death, an action was brought to set aside the trust.
Plaintiff then filed in the lower court an action to annul the 1952 trust indenture on the grounds of fraud, duress and undue influence. Plaintiff is the settlor, who is also the life beneficiary, of an inter vivos trust seeking rescission of the trust. Allegedly,a Queens Family Lawyer said the agent and accountant of her father used threats and made statements that led her to sign the document. The mother, whom plaintiff always referred to as “mother”, is actually a stepmother and an aunt or her father’s second wife; while the sister is a daughter of the father and the second wife, whom plaintiff always referred to as her sister and not her half-sister.
According to plaintiff, her father’s agent and accountant told her that unless she signed the trust indenture, the father would be angry, his health would be jeopardized, and he would undoubtedly cut off all support for her, her husband, and the child to come; that the agent raised his voice in accomplishing his objective; that there was no annex attached specifying the property that was covered in the trust indenture; that the annex was to be supposed to be signed later, within one day after the birth of her child; that she had no recourse but to sign; that when she wished to ask some questions concerning the content of the indenture, which was a technical document defining future interests, she, at the agent’s suggestion, telephoned her father’s lawyer, a senior partner in a prominent law firm; that her question with regard to what provisions could be made for future children that might be born to her was narrowly answered by the lawyer; that she was refused the opportunity to consult with a lawyer of her own choosing; that being ill, distraught and desperate, she signed. Plaintiff said that she did not know that her own assets were being placed in trust, and that she believed that the father was providing assets of his own for that purpose; that her father’s agent so told her; that, in any event, she would have never consented that any of her assets be so placed that they would never descend to her own children; that she would never have willingly consented to the discrimination between the child she was then bearing and any children that she might subsequently have; that she was under duress and undue influence, i. e., in fear of her father’s health, in fear of her husband’s health, in fear of the effects upon her unborn child and her husband, and in a personal state of physical and mental distress.
After trial, a Queens Custody Lawyer said the lower court held that there had been fraud, duress, and undue influence, but, because of subsequent ratification by the settlor-beneficiary, the trust was held valid and subsisting. Thus, the complaint was dismissed. Plaintiff then appealed the said judgment.
Here, it is undisputed that plaintiff’s father’s conduct was motivated only by love and affection.
Nonetheless, the trust indenture did have certain unusual aspects. It placed under the trust, assets, title to which the father had transferred to the daughter on prior occasions by way of gift.
It is without a question that plaintiff’s father, a dominating and a successful businessman, had warm affection and deep concern for his unfortunate and disabled daughter. He appears as a man who built his fortune, and who never gave up completely the control that he had over his assets, even when, to some extent, he parceled them out among the members of his family. Nonetheless, it can reasonably be inferred that plaintiff’s father obviously did not trust plaintiff’s husband. The latter had married her after a casual meeting and under circumstances, which, perhaps unfairly, stimulated that mistrust in the father. One may also infer, without engaging in violent speculation, that, to this father, a man who was not a great money-maker or a good provider was one who could not be relied upon always to do well by the disabled daughter. Given these feelings, the father evidently felt bound to make sure that the assets he had accumulated, and the assets the daughter had received from him by way of gifts, would never be dissipated by a stranger, during his daughter’s life or that of her children. Thus, to accomplish this he resorted to a device, albeit harsh, that in a family milieu is not unknown and is completely understandable. He, in effect, told his daughter that she should do as he says or he will not help her or her family. To this ultimatum he knew that she would have but one answer, because she would have no choice. This, however, is not the stuff of duress or undue influence cognizable in law or in equity. It must be noted that the father had no legal obligation to continue the support of a daughter, aged 36, and married; had no duty to provide for the grandchildren to be born; had no duty, that a court could enforce, to provide for the medical expenses of his son-in-law, even if that son-in-law were in extremis; and that only his conscience could, and did, dictate such concern and action. However, the issue remains, that is, whether or not the father used unlawful means to accomplish the act of signature to the indenture. This is a question of law, not of fact. The instrument was but one in a series of many over the years of their relationship that the father had exacted from the daughter, either in blank or with her knowing only partially the full import and effect.
At any rate, the court cannot agree with the findings made by the trial court to the effect that fraud occurred or that duress and undue influence were exercised. Plaintiff knew exactly what was happening since it had happened before; and she was willing to accept the parental fiat because it meant continued support and donations from her father. Indeed, if the father had insisted upon a return to him of the assets he had given her, but from which she never received payments directly, and over which she exercised no control, she could, with reason, have done that too, in exchange for continued support for her and her family. Plaintiff’s version of what occurred and her own understanding is largely given credit. In fact, it was evident in plaintiff’s testimony that there were instances of marked evasion, along with the question of when she first learned of the contents of the annex to the trust indenture in which the assets were detailed. Clearly, her attempts to indicate that she could not understand even the basic purpose of the documents hardly accords with her demonstrated perception and experience. Plaintiff is not a simple, untutored person. Her testimony and conduct in the courtroom revealed a good mind, a person of strong character whose own dominating qualities were perhaps exceeded only by those of her father. Indeed, the trial court had several occasions to correct her conduct. Despite the fact that she pleaded difficulty of maintaining herself on the income she was receiving from the trust, she has placed in banks and kept intact the cash funds that she has received from her father’s estate following his death. It is quite apparent that plaintiff was not the unaware, emotionally dependent subject that she would portray, who helplessly executed the subject trust indenture. The record revealed a sharp, querulous, skeptical, and questioning individual, with no shyness in asserting her views or contentions, on the trial, and at the signing of the subject indenture.
Under the law, in order for duress to render voidable what was done, there must be a wrongful act or a wrongful threat precluding the exercise of a free will. In the case at bar, the question resolves itself into one of the wrongfulness of the acts or threats purportedly made by the father, or the father’s agent on his behalf. Such acts need not be criminal or clearly illegal. However, they must involve an act or a threat of action from which the person sought to be influenced is entitled to be free or, in this case, the threats were to withhold what the father had a legal right to withhold. Hence, as a matter of law there could be no duress.
On the claim of undue influence, the law provides that it must be the scope of conduct which may result in the voidability of acts done as a result of such influence, which is much broader than duress. Illegal action or illegal threats are no longer necessary. But in such case, a critical element, almost invariably present, is the advantage sought and obtained for the actor or another in whom he has an interest. More particularly, with respect to unilateral trusts, courts have been quick to invoke equitable principles and relieve a settlor of his act. This they do where, by reason of lack of understanding, absence of independent advice, improvidence, unnaturalness of the trust, mental and physical condition of the settlor, and the like, it is clear that the settlor would not have created the trust of his own free will. Here, it involves an entirely different principle. The settlor, or the plaintiff, knew what she was doing, and to the small extent that she did not, she knew the secrecy and exclusion from knowledge was deliberate. To this she acceded. This was the price or the consideration if one insists on applying a legal term of reference for the settlor to continue receiving substantial economic benefits from her father, who was free, as a matter of law, to withhold such benefits. Thus, unlike here, the classic cases in which trusts have been avoided involved a purely unilateral act. Disinterested advice and even pressure, no matter how bad, are not to be confused with undue influence, for undue influence is tantamount to a species of cheating. Therefore, where a settlor, a day before she was married, was induced by guardians and the family lawyer, to entrust her property for her benefit, the lower court was not quick to set aside the trust on grounds of fraud or undue influence. The court took note of the intelligence and keen perception shown by settlor in her testimony, in finding that she understood the full nature of her act. Other jurisdictions have also distinguished between benevolent influence and pressure by friends or relatives from the influence and pressure exerted by those who seek their own advantage.
In sum, the case at bar does not warrant any interference by the courts. There was no conspiracy to cheat. None can say that the provisions in the trust were improvident. No one should now, years later, substitute his wisdom for the wishes of the father or the consent then exacted from a daughter for what the father firmly believed was for her benefit. Neither should the court ignore the realities as to the nature of the property involved. These assets were gifts from the father, from which the daughter never drew income, over which she had no actual control, and over which she had no detailed knowledge. This was the fact long before and on the day of the signing of the trust indenture. The settlor was not only her father’s dependent, but also one of his financial alter egos. From his bounty, wrung at a price, she supported herself, her husband and her children. The trust was nothing new, and plaintiff comprehended this, although she did not like it.
Henceforth, the court affirmed the judgment dismissing the complaint, but the findings of fact and conclusion of law which were inconsistent were reversed or modified to accord therewith, without costs. There was no fraud, duress or undue influence, and, even if there were, there was a ratification thereafter made by the settlor-beneficiary, the plaintiff.
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