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Klass v. Hallas





APPEAL from the Circuit Court of Lake County; the Hon. BERNARD M. DECKER, Judge, presiding.


Lillian Hallas (nee Klass) and her sister, Florence Goldfein (nee Klass), were named grantees in joint tenancy in a deed from their father, Harry Klass, conveying certain property described as "the East Fifty (50) feet of Lot Six (6), excepting the North Seven (7) feet thereof, in Block 21, in McKay's Second Addition to Little Fort (now City of Waukegan) in Lake County, Illinois." Harry Klass, the original plaintiff, brought suit against Lillian Hallas and her husband, Steve Hallas, to revoke the deed. During the pendency of the matter before the master, Harry Klass died, and his executor, heirs, and devisees were substituted as plaintiffs, and filed an amended answer. After receiving the evidence in the cause, the master reported, concluding that a confidential relation existed between Lillian Hallas and Harry Klass at the time of the execution of the deed, that Lillian perpetrated no actual fraud, and recommended that Lillian Hallas be decreed the owner of one fourth of the premises, and a constructive trustee of one fourth of the premises for her three sisters, Florence Goldfein, Sylvia Muskat, and Evelyn Gordon, and that Lillian Hallas recover the sum of $375, and that the terms of the last will and testament of Harry Klass are inoperative as to the property held in record title by Lillian Hallas. Upon hearing objections to the report, the chancellor found that no confidential relation existed, that there was no fraud, and decreed Lillian Hallas to be the owner of one fourth, and the trustee of one fourth for her sisters. A freehold being involved, plaintiffs appeal to this court.

Harry Klass, then a widower, conveyed the premises to the two daughters in joint tenancy on April 20, 1943, by warranty deed acknowledged before Mark Beaubien, an attorney and notary public. At about the same time an agreement was prepared, acknowledging a lifetime interest, use and possession in the property in Harry Klass, and placing a duty on Lillian and Florence on demand to convey one fourth of the property to unnamed persons, established to be their two sisters. This trust agreement was never executed.

Harry Klass stated that he occupied part of the building, that Lillian and Florence had resided with him, that he collected the rentals from the building and paid the bills. He handled his own business, except that several years ago Lillian paid some interest with money he gave her. In 1947 he learned that Lillian had married a gentile, and he demanded she reconvey the property to him. She refused and moved out. By his will he left Lillian only five dollars.

Defendants denied all material allegations and asked that the complaint be dismissed. The substituted plaintiffs amended the complaint praying the deed be declared void for fraud. The defendants denied this allegation. It was stipulated that Harry Klass took $300 of Lillian's money to pay the expenses of this suit.

Plaintiffs contend that a fiduciary relationship existed between Harry Klass and Lillian, and the chancellor erred in casting the burden of proof on plaintiffs. They seek to have the deed declared to have been executed by Harry Klass upon the inducement of Lillian, by her representations to him, in violation of her fiduciary relation to him. Generally, a fiduciary relation exists where trust and confidence are reposed by one person in another, who, as a result gains an influence and superiority over the first. It embraces both technical fiduciary relations and those informal relations which exist whenever one person trusts in and relies upon another. It includes not only the legal and technical relations such as guardian and ward, attorney and client, principal and agent, and the like, but extends to relations which may be moral, social, domestic or merely personal. (Suchy v. Hajicek, 364 Ill. 502; Staufenbiel v. Staufenbiel, 388 Ill. 511; Krieg v. Felgner, 400 Ill. 113.) A fiduciary relation may exist between a parent and child if the necessary trust and confidence of one in the other is established so as to endow one of them with a superiority. The mere relationship of parent and child does not establish that a confidential or fiduciary relation exists between them as a matter of law or fact. (Bodin v. Mattingly, 8 Ill.2d 487.) A conveyance from a parent to a child cannot be presumed to be the product of fraud or undue influence from the fact of relationship alone. Fraud or undue influence in fact must be shown to set aside such a conveyance. McCrillis v. Utterback, 397 Ill. 550.

The facts here fall far short of proving a confidential or fiduciary relation between Lillian and the grantor. There is a complete lack of evidence that Harry Klass ever relied on Lillian in such a way as to indicate such trust and confidence as give rise to a fiduciary relation. There was thus no such relation in existence when this deed was executed. The burden of proof thus remained upon the plaintiffs to prove fraud or undue influence. There being no fiduciary relationship established, the burden did not shift to require Lillian, as a grantee, to prove the fairness of the conveyance. Thus fraud could not be presumed to arise from a fiduciary relationship, and the plaintiffs must prove it by clear and convincing evidence. (Carter v. Carter, 283 Ill. 324; Bernstein v. Bernstein, 398 Ill. 52.) The burden of proving the allegations of the complaint to set aside the deed rests primarily upon the plaintiffs who assert them. Brenneman v. Dillon, 296 Ill. 140; McCrillis v. Utterback, 397 Ill. 550.

The master and the chancellor found that Lillian perpetrated no actual fraud inducing her father to execute the deed. The evidence is conflicting in many respects. Florence and Sylvia stated that Lillian was worried that she and Florence would be forced out of their home by their father's contemplated marriage, and suggested going to an attorney and inducing her father to convey the property by telling him it was an O.P.A. paper. They claimed that she did so tell him. Harry claimed all three sisters told him the deed was an O.P.A. paper, and that he should sign it as it was for his benefit.

Lillian, however, testified that all four sisters discussed the marriage with their father, who wanted it so arranged that he could continue to live in the property and collect the rents so long as he lived or wanted to do so, and that it should then belong to the four girls. She claimed Florence suggested they go to a lawyer, and later brought home a deed which she read to her father. She stated the deed lay in their home for a couple of weeks during which time their father insisted it be completed, and that Florence took her father to attorney Mark Beaubein and had the deed executed.

Mark Beaubein testified that he had known Florence for several years in the real-estate business, that he believed she arranged the meeting with Klass, that his office had not prepared the deed, that he believed only Florence was present at the execution of the deed with Klass, that he read the deed to Klass and explained what it was, that there was no reference to the O.P.A., and that Florence Klass was billed and paid for the legal services he performed. His testimony was confirmed in part by his secretary.

The master heard the testimony, and his report of no actual fraud was confirmed and approved by the chancellor. Consequently, the finding not being manifestly against the weight of the evidence, we would not be justified in disturbing the finding of lack of fraud in the execution of the deed. Staufenbiel v. Staufenbiel, 388 Ill. 511.

Consequently, there being no fraud or undue influence proved or presumable, and no violation of a fiduciary relation by Lillian, the deed is not voidable as charged by plaintiffs. No trust agreement or any written memorandum of trust was ever executed by Lillian. The most that is shown by the evidence is a voluntary agreement for the creation of a trust, and equity will not regard such an agreement as binding, so long as it remains executory. (Harris Trust & Savings Bank v. Morse, 238 Ill. App. 232; McCartney v. Ridgway, 160 Ill. 129.) No fiduciary relation being established or abused, and no actual fraud being proved, there can be no constructive trust. Suchy v. Hajicek, 364 Ill. 502.

The plaintiffs claim that the master's and chancellor's findings are against the manifest weight of the evidence in their determinations that there was sufficient consideration moving from Lillian to her father, because she cared for her parents and their household for 20 years, that Harry Klass knew he was signing a deed divesting himself of title, and that the alleged trust was irrevocable.

The evidence as to the services performed by Lillian for her parents during 20 years is conflicting, but the finding of the master is not against the manifest weight of the evidence. We would not be justified in finding otherwise. Moreover, the natural love and affection of a father for his child is ...

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