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(147 N.E.)

Charles J. Trainor, of Chicago, for appel

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Bill by Adah W. Feeney against Eben F. a $500 note and $240 interest; that December Runyan and another. Decree for plaintiff, 1, 1921, he paid a $500 note and $225 inand defendant Daniel B. Williams appeals. terest; that in addition to the notes given Reversed and remanded, with directions. by Williams in payment for the propLeesman & Roemer and Ernest W. Clark, erty conveyed, she also held an unsecured all of Chicago, for appellant. note for $1,500 for money loaned to him; that he received $1,250 cash from the sale of the Arlington Heights property, and received rent from said property at $15 a month for the months of June, July, and August, 1920; that he has received from the Chicago property rent at $60 a month, aggregating $1,080, up to and including December 1, 1921; that he charged on his books commissions amounting to $415 for the sale of the properties sold to himself; that he borrowed for his own use $3,000 and secured the same by a trust deed on the Chicago property; that the transfers were fraudulent, and he holds the lands and the proceeds therefrom in trust for the heirs and devisees of Mrs. Chalifoux. The decree orders the conveyance of the Chicago property to appellee and orders the payment to her by Williams of $4,430. The decree itemizes the cash items to be paid as follows: $3,000 loaned on Chicago property; $45 rent from Arlington Heights property; $1,080 rent from Chicago property; $1,500 loan formerly secured by deed to some Indiana property. From this decree Williams has prosecuted an appeal to this court.

THOMPSON, J. Adah W. Feeney, the residuary legatee and devisee under the will of Williamina Chalifoux, deceased, filed her bill in the superior court of Cook county alleging that she is the owner of a lot improved with a flat building, known as No. 2438 West Chicago avenue, Chicago, and a lot improved with a dwelling in the village of Arlington Heights; that these lands were devised to her by the will of Mrs. Chalifoux; that prior to the death of testatrix, Daniel B. Williams, appellant, was the business manager and confidential adviser of testatrix; that in violation of the confidence reposed in him, Williams secured the transfer of the lands in question and now claims to be the owner of the same under deeds executed by Mrs. Chalifoux a short time prior to her death; that he delivered to Mrs. Chalifoux in payment for said lands his personal notes for $7,000 and $500 in cash; that since the death of Mrs. Chalifoux he has conveyed the Chicago property to secure a loan to him of $3,000; that since her death he has sold the equity in the Arlington Heights property for $1,500. She prays that Williams be decreed to pay to her the $1,500 received from the sale of the Arlington Heights property, to deed to her the Chicago property subject to the trust deed for $3,000, and to pay to her $3,000 and all the moneys received as rent from said properties. Eben F. Runyan, executor of the will of Mrs. Chalifoux, who has in his possession the notes given by Williams, was made defendant to the bill. Answers were filed and the cause was referred to a master in chancery for hearing. The master reported, recommending a decree in accordance with the prayer of the bill. The chancellor entered a decree finding that appellee is the daughter and legal heir of Williamina Chalifoux; that under the will of Mrs. Chalifoux appellee is entitled to all the real estate owned by testatrix at the time of her death, free from the charge of the specific legacies named in the will; that Williams was the business manager and confidential adviser of Mrs. Chalifoux during the last five years of her life; that at the time of her death Mrs. Chalifoux was a widow, about 81 years of age; that Williams secured from her, by abuse of the confidential relation existing between them, deeds to the Chicago and the Arlington Heights properties; that he gave her in payment for the properties his unsecured notes in the sum of $7,000 and $500 in cash; that December 1, 1920, he paid a $500 note and $255 interest; that June 1, 1921, he paid

[1] Appellant's first contention is that appellee has no right to prosecute this suit to set aside the deeds secured by fraud from her devisor. This question has been decided adversely to appellant's contention. Warner v. Flack, 278 Ill. 303, 116 N. E. 197, 2 A. L. R. 423; Rickman v. Meier, 213 Ill. 507, 72 N. E. 1121. It would be a defect in the law if there were no remedy against an agent who, having procured his principal's property unfairly by taking advantage of his confidence, has succeeded in retaining it by the same means until his principal's death. Whether the lands devised to appellee under the will of Mrs. Chalifoux are charged with the payment of the specific legacies or not, the title to all the lands owned by Mrs. Chalifoux at the time of her death is by the will conveyed to appellee, and under the authorities cited she is entitled to prosecute this suit to set aside a deed to the lands conveyed which has been procured by fraud.

[2-7] Appellant's next contention is that the evidence in the record does not show the existence of a fiduciary relation between himself and Mrs. Chalifoux and that it does not show that the conveyances were procured by his solicitation. A "fiduciary relation" exists in all cases in which there is confidence reposed on one side and a resulting superiority and influence on the other. The origin of the relation is immaterial. It may be legal, moral, social, domestic, or merely personal. If the confidence in fact exists and is reposed by the one party and accepted by the other,

that the transaction was fair and equitable and the consideration for the conveyance adequate, the chancellor properly decreed that he account for the property and the profits therefrom.

[8, 9] Appellant's contention that the court erred in decreeing the payment to appellee of the $1,500 evidenced by a note formerly secured by warranty deed to the Indiana property must be sustained. There is no allegation in the bill which authorizes this part of the decree, and, furthermore, it is a part of the personal property of Mrs. Chalifoux and belongs to her personal representative.

[10, 11] Appellant also objects to the amount which he is decreed to pay in money. The decree is ambiguous and in many respects contradictory, and many of its findings have no basis in the pleadings or in the proof. The total of the items enumerated to be paid by appellant is $5,625 but the amount decreed to be paid is $4,430. We are unable to determine from the findings of the decree or from the record by what process this amount is determined. As we view the record, appellant is obligated to pay to appellee the $3,000 borrowed against the Chicago property and all interest accrued and unpaid on the same to the date of the decree; the $1,250 received from the sale of the equity in the Arlington Heights property, with interest from the date of receipt of the money to the date of the decree; $25 rent for the Arlington Heights property, being rent for the month of June and the first 22 days in July, with interest thereon at the legal rate from the dates of receipt to the date of the decree; and $1,080 rent collected from the Chicago property between June, 1920, and December, 1921, and such other sums, if any, collected by him as rent subsequent to the latter date, with interest thereon at the legal rate from the dates of receipt to the date of the decree. He is entitled to be credited with the $500 cash payment, the $1,500 principal, and the $720 interest paid on the notes given

the relation is fiduciary and equity will regard dealings between the parties according to the rules which apply to such relation. Higgins v. Chicago Title & Trust Co., 312 Ill. 11, 143 N. E. 482; Beach v. Wilton, 244 Ill. 413, 91 N. E. 492. In this case the evidence shows that Williams transacted all of Mrs. Chalifoux's business during the last few years of her life; that she turned over to him more than $20,000 in securities, to be used by him as collateral to secure his personal loans; that he dealt with these securities as his own; that she called at his office from one to three times a week and that he called at her home as often; that she entertained him at her home and that he frequently took her out to dinner and to the aters. The evidence fully supports the finding in the decree that a fiduciary relation existed. The relation being established, the burden rests upon the beneficiary of the act to show that the actor acted of her own volition or on independent advice. Thomas v. Whitney, 186 Ill. 225, 57 N. E. 808. The burden was on Williams to show that the transaction was fair and equitable and that the price paid was adequate. William v. Burdette, 172 III. 117, 49 N. E. 1000; Morrison v. Smith, 130 Ill. 304, 23 N. E. 241; Jennings v. McConnel, 17 Ill. 148. It is not necessary that actual and intentional fraud be established. Dowie v. Driscoll, 203 Ill. 480, 68 N. E. 56. When the fraud is shown, it is no less fraudlent, either in law or morals, because it is constructive. In either case the act constituting the fraud is the obtaining of the actor's property by means which the law deems fraudulent. Because of the advantages he possesses by reason of the confidential re lation and the duties it places upon him, the dominating character, in whom the actor reposes confidence because of the confidential relation, has the burden of proving that the transaction between him and the actor was fair and equitable when the issue arises. This Williams has failed to do. He has not proved nor offered to prove the value of the property conveyed to him. He has not prov-in payment for the property. He claims the ed nor offered to prove that the unsecured personal notes which he gave in payment for the property were of full or any value. The fact that he sold for $1,250 an equity for which he paid $1,000 does not prove or tend to prove that the equity was worth $1,250, The sale was his own act and appellee was not bound by the price he fixed. Nor does the fact that the testatrix, before the execution of the deeds, told two of appellant's employees that she wanted to sell the properties because they were a burden to her and she was not receiving any net income from them, show that the sale was her voluntary act. These declarations only exhibit what notions induced her to take the course she did. There is no showing that these notions were not the result of influences which were improper. Appellant having failed to show

right to recover interest on the amounts he has paid in cash, but the law is well settled that he is not entitled to receive such compensation. Rolikatis v. Lovett, 213 Mass. 545, 100 N. E. 748. Nor is he entitled to be reimbursed for expenditures made for maintenance of the property or taxes, as he contends. In the first place, he has not proved that such expenditures were made; and in the second place, in the case of a trustee in invitum it is his duty to convey at once the property wrongfully obtained to the beneficial owner, and whatever obligations are incurred while he wrongfully retains it are obligations of his own making. In addition to the order directing Williams to deed to appellee the Chicago property, there should have been an order in the decree directing the executor to return to Williams the un

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paid notes given by him in payment for the [ 5. Trusts 110-Proof to establish a conproperty in question. structive trust must be clear, convincing, and unequivocal.

Before court is justified in setting aside a deed and declaring a constructive trust to exist, proof must be clear, convincing, and unequivocal.

[12] Inasmuch as the decree must be reversed for the reasons assigned, we think it proper to call attention to the fact that the decree makes two findings without either allegation or proof to support them. The first is that appellee is the daughter and legal heir of Williamina Chalifoux; and the second is that the real estate devised to appellee under the residuary clause of Mrs. Chalifoux's will is not charged with the payment of the specific legacies set forth in clause 3 of the will. Neither of these matters is in issue in this case, and the findings on these matters not insulting trust arose in his favor at time title was

issue have no place in the decree.

The decree is reversed and the cause is remanded to the superior court of Cook county, with directions to enter a decree in accordance with the views herein expressed. Reversed and remanded, with directions.

(316 III. 253)

NILAND et al. v. `KENNEDY. (No. 16226.)

(Supreme Court of Illinois. Feb. 17, 1925. Rehearing Denied April 11, 1925.)

1. Deeds 211(3) Fiduciary relation between grantor and his niece held under evidence not to exist at time of deed giving her fee title.

Fiduciary relation between grantor of apartment house property and his niece held under evidence not to have existed at time of deed conveying her fee title, and deed therefor was not obtained by her fraud.

2. Contracts 94(1) -"Fiduciary relation" is founded in trust, and same remedy exists therein against wrongdoer as against trustee by cestui que trust.

A fiduciary relation is one founded in trust, a relation in which, if a wrong arises, the same remedy exists against wrongdoer on behalf of injured as would exist against trustee by cestui que trust.

[Ed. Note.-For other definitions, see Words and Phrases, First and Second Series, Fiduciary Relation.]

3. Contracts

94(1)-When "fiduciary rela

tion" exists, stated.

Fiduciary relation exists where there is special confidence reposed in one who in equity and good conscience is bound to act in good faith and with due regard to interests of one reposing confidence, or where confidence is reposed on one side and resulting superiority and

influence on other.

4. Contracts 94 (1)-Fiduciary relation does not necessarily arise from blood relationship. A fiduciary relation does not necessarily arise out of the relation of parent and child, nor sister and brother, nor ancle and niece.

6. Trusts 89(2)—Evidence held to establish that uncle furnished consideration paid for apartment building and that resulting trust arose at time title was taken in niece.

Evidence held to establish that uncle furnished money and property, constituting consideration for apartment building, and that re

taken in name of niece, and that thereafter she held it in trust for him and after his death for his heirs.

7. Trusts 72-Resulting trust arises in favor of person furnishing purchase money where title taken in another.

Where one person pays purchase money for property and conveyance of legal title is made to another, a resulting trust arises in favor of person furnishing purchase money.

8. Trusts 371 (8)-Defense of gift not stated in answer unavailable to defendant.

In suit by heirs to declare resulting trust in property deeded to niece by uncle, where defendant did not allege in her answer that uncle gave her the property or money with which to purchase it, defense of gift was un

available.

9. Trusts 87-Evidence of defendant's impoverished circumstances at time of conveyance is admissible to show impossibility of his having paid consideration.

In suit to declare resulting trust in property deed to which was taken in name of defendant, it was proper to show that defendant was in impoverished circumstances at time of conveyance to show improbability of his having paid consideration.

10. Trusts 89(5)-Parol evidence to establish resulting trust must be clear, consistent, and unequivocal, but circumstances may establish facts from which it arises.

Parol evidence to establish resulting trust must be clear, consistent, and unequivocal and must show payment of consideration by alleged beneficiary beyond reasonable doubt, but circumstantial evidence may establish facts from which trust arises.

11. Trusts 84-If trustee adds own funds to purchase money furnished by cestui que trust, trust results to owner of trust funds employed.

If trustee adds his own funds to purchase money furnished by cestui que trust, trust results to owner of trust funds employed, and

burden is on trustee to show sum he embarked
in enterprise, and, failing to sustain burden,
cestui que trust takes whole estate.
12. Trusts 356(1)-Cestui que trust or his
heirs may follow fund and claim estate.

If resulting trust arises in real property at time of purchase, cestui que trust or his

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

heirs can follow fund and claim property in which it was subsequently invested by exchange. 13. Trusts 86-Burden was on one holding legal title to show intention that he had beneficial interest.

Where purchase money for real property was furnished by one party and deed was made to another, presumption is that trust resulted to one furnishing consideration, and burden was on holder of legal title to show it was intended

that he have beneficial interest.

Error to Circuit Court, Cook County; Hugo M. Friend, Judge.

Bill by Patrick Niland and others against Annie Kennedy. Decree for plaintiffs, and defendant brings error. Affirmed in part, and reversed in part.

Andrew R. Sherriff and Walker Butler, both of Chicago, for plaintiff in error. Charles B. Elder, of Chicago, for defendants in error.

THOMPSON, J. Peter Niland died in the city of Chicago on February 6, 1922, leaving as his heirs his brothers, Patrick and Thomas, and his nieces Anna, Josephine, and Agnes, daughters of his deceased brother, John, and his niece Annie and nephews Patrick and John, daughter and sons of his deceased sister, Ellen Kennedy. No will has been found. The niece Annie Kennedy was the housekeeper and office assistant of Niland for twelve years prior to his death. At the time of his death she held the legal title to and claimed to be the legal owner of a sixapartment building at 1432-1434 East SixtyFifth place, in Chicago, where she lived, and a six-apartment building at 6241-6243 Ingleside avenue, Chicago. Defendants in error filed their bill in the circuit court of Cook county asking that plaintiff in error, Annie Kennedy, be held to hold the legal title to the properties in question as trustee for the heirs of Niland, claiming that the East Sixty-Fifth place property was purchased with the money of Niland, and that a resulting trust arose by reason of this fact in favor of his heirs, and that the Ingleside avenue property was purchased with the money of Niland and the title to the same was secured from him by Annie Kennedy by the abuse of a fiduciary relation existing between them. Annie Kennedy filed her answer denying the allegations of the bill and alleging that she was the owner of the properties in fee and that she had bought and paid for the properties with her own money. The chancellor heard the evidence and rendered a decree granting the prayer of the bill. This writ of error is prosecuted to review that decree.

Peter Niland was born in Ireland about the year 1840. He was one of four brothers, all of whom came to this country and lo

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cated in Milwaukee. For about 35 years prior to his death he was engaged in the real estate business in Woodlawn, a subdivision of Chicago. Prior to this time he had been engaged as a traveling salesman and as a merchant. He married Mary Kenney and lived with her until her death, in 1910. They had no children. His wife's sister Kate lived in their home from the time they located in Chicago until his wife's death. His sister Ellen Kennedy, who lived in Ireland, on an eight-acre farm, for which they paid was the wife of a blacksmith, and they lived £8 a year rent. The house consisted of two rooms meagerly furnished. They had eight children, three of whom survived their uncle, Peter Niland. In 1905, after the death of her father and mother, Annie Kennedy came to America. During the five years intervening between her arrival in this country and her going to live with her uncle she worked as a servant in hospitals, boarding houses, and in private homes, her income never exceeding $7 a week. After the death of his wife, Niland employed her to keep house for him at a weekly wage of $8. It was his practice in his real estate business to take title to property owned by him in the name of members of his household. At one time he bought a three-flat building and took title to it in his wife's name. Later, in 1904, he bought a two-flat building at 6537 Ellis avenue, Chicago, and took title to it in the name of Kate Kenney. She had no interest in the property, and when she ceased to be a member of his household after the death of his wife she conveyed the lands to Niland by a warranty deed dated May 27, 1910. Five months later he conveyed this property to Annie Kennedy. She held title to it until July 27, 1911, when she conveyed it to Thomas Bishop in exchange for the six-apartment building on Ingleside avenue here in dispute. The full consideration paid for the lastmentioned property was $21,000, which consisted of the Ellis avenue property, valued at $7,000, a $1,500 check, a $500 note, and the assumption of a $12,000 obligation secured by a mortgage on the property. Annie Kennedy held title to the Ingleside avenue property until August 15, 1913, when she conveyed it to Niland. Thereafter, December 23, 1916, he conveyed the same property to her by a warranty deed in his own handwriting for the stated consideration of $10. September 30, 1910, title was taken in the name of Annie Kennedy to a property at 1322 East Fifty-Fourth street, and this was conveyed by her to Sherman T. Cooper on August 7, 1911, in exchange for the six-apartment building on East Sixty-Fifth place, where Niland lived at the time of his death. The consideration for this apartment building was the Fifty-Fourth street property, valued at $9,000, and the assumption of a $12,000

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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(147 N.E.)

the interest of the insured be other than unconditional and sole ownership, or if the subject of insurance be a building on ground not owned by the insured in fee simple."

obligation secured by a trust deed to the trust. The relation exists where there is a property. These notes, and the interest | special confidence reposed in one who in equithereon, were paid as due and a release ty and good conscience is bound to act in good deed was delivered to Annie Kennedy on faith and with due regard to the interests of December 13, 1915. The two properties in the one reposing the confidence. It exists question were leased by Niland, the leases where confidence is reposed on the one side being signed by him, “A. Kennedy, by Peter and resulting superiority and influence is Niland, Agt.," and the receipts issued by him found on the other. Feeney v. Runyan (Ill. for the rents paid were signed, "Peter Ni- No. 16396) 146 N. E. 114; Campbell v. Freeland, Agt." The taxes were paid and the man, 296 Ill. 536, 130 N. E. 319. A fiduciary properties were insured in the name of plain- relation does not necessarily arise out of the tiff in error. All the insurance policies were relation of parent and child (Chance v. Kinprocured by Niland, who was the agent of sella, 310 Ill. 515, 142 N. E. 194; White v. the insurance companies, and each of them Ross, 160 Ill. 56, 43 N. E. 336), nor of sister contained the standard clause: "This entire and brother (Albrecht v. Hunecke, 196 Ill. policy * shall be void if 127, 63 N. E. 616), nor of uncle and niece. There is no evidence whatever that Niland ever asked of Annie Kennedy, or that she ever gave him, any advice with respect to his real estate deals or that she ever sought to influence him in any way to make the deed in question. There is no evidence in the record which justifies holding that a fiduciary relation existed between Peter Niland and Annie Kennedy or that she exercised any control over him in his business transactions. If there were evidence of a fiduciary relation, there is an entire want of evidence showing that she exercised any influence whatever in securing the deed of December, 1916. Before a court is justified in setting aside a deed and declaring a constructive trust to exist, the proof must be clear, convincing, and unequivocal. Conroy v. Conroy, 313 Ill. 127, 144 N. E. 833; Winkelman v. Winkelman, 307 Ill. 249, 138 N. E. 637; Lord v. Reed, 254 Ill. 350, 98 N. E. 553, Ann. Cas. 1913C, 139. The evidence in this record shows that Niland was a successful real estate dealer and a forceful character. Although he suffered the natural disabilities attending old age, he was in full possession of his mental faculties to the last.

[1] We shall consider first the Ingleside avenue property. This was undoubtedly bought and paid for by Niland. At the time the Ellis avenue property, which went into this property, was bought and title taken in Annie Kennedy, it is not probable that she had more than $1,000, and there is no proof that she had any money. She had no means whatever when she came to America, and we think the evidence warrants the conclusion that she came here through the charity of Niland. Her gross earnings for the five-year period prior to the purchase of this property did not exceed $1,800, and it is not reasonable that she could have saved much more than half of this. There is no evidence in the record that she ever had a bank account prior to the death of Niland or that she had any money when she came to live with him. She does not claim that he gave her the property. There is in evidence an admission made by her that she paid only a part of the purchase price of this property at the time it was bought and that she paid the balance to Niland as she got the money. While defendants in error have laid great stress upon the circumstances surrounding the original trading in this property, we are of the opinion that the question with respect to the Ingleside avenue property is narrowed to the effect of the deed executed by Niland in December, 1916, by which he purported to convey to plaintiff in error the fee simple title to it.

[2-5] Defendants in error contend, and the chancellor held, that there existed between the parties to this deed, at the time of its execution, a fiduciary relation and that the deed was obtained by fraud. We have read the record with care and we fail to find any evidence establishing either of these facts. A fiduciary relation is one founded in trust -a relation in which, if a wrong arises, the the same remedy exists against the wrongdoer on behalf of the injured as would exist against a trustee on behalf of the cestui que

Defendants in error having failed to sustain the burden of proof resting upon them to show that the deed here under consideration was obtained by fraud, the chancellor erred in decreeing that Annie Kennedy holds the Ingleside avenue property in trust for the heirs of Peter Niland.

[6-9] An entirely different situation exists with respect to the apartment building on East Sixty-Fifth place, where Niland lived at the time of his death. It is contended by defendants in, error that there arises out of the transaction transferring this property to plaintiff in error a resulting trust in favor of the heirs of Niland. Where one person pays the purchase money for the property and the conveyance of the legal title is made to another, a resulting trust arises in favor of the person who furnishes the purchase money. After full consideration of all the evidence in the record and the circumstances surrounding the parties to this transaction, we entertain no doubt that Niland furnished

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