Yohe v. Yohe

¶1(concurring).

¶2I agree with the Court that appellant made a prima facie showing that his wife, the appellee, stood in a confidential relationship with respect to him. This conclusion is warranted by appellant’s testimony that he trusted and relied upon his wife, as well as by the wife’s testimony, when called as on cross-examination, that she paid the bills and generally handled the family finances, even after the parties had begun to experience marital difficulties.

¶3Once it is determined that a confidential relationship existed, the burden of proof shifted to the appellee to show that she did not abuse that relationship.1 Because the effect of the judgment of non-suit was to deny appellant relief before the appellee was called upon to sustain her burden of showing that appellant was not entitled to relief, it was improperly entered.

¶4I am also of the opinion that, on this record, appellant made a gratuitous conveyance of an interest in real property under a unilateral mistake of material fact. This is *414an independent ground on which appellant may be entitled to relief.

¶5The opinion of the Court states that we may not consider this issue because it has not been advanced by appellant. With respect, I must disagree. In the court below, as well as in this Court, appellant has alleged two significant facts: first, that when he signed the deed in question he was not aware that he was making a conveyance to his wife; and second, that this act on his part was induced by the conduct of his wife, the grantee. Appellant has argued that together these two facts entitle him to relief. The first fact alone is tantamount to an allegation of mistake, and is not to be avoided because coupled with the additional allegation of inducement.2 Because Pennsylvania law on this subject is unclear, I deem it worthwhile to explain why I think the doctrine of mistake may entitle the appellant to relief in the circumstances of this case.

¶6In deciding whether appellant is entitled to relief solely on the basis of mistake, it must be assumed that appellant’s mistake as to the nature of the document he was signing was a unilateral mistake, not induced by his wife nor one of which she had knowledge.3 It is, of course, well settled that such a mistake is not a ground for relief in a case in which the conveyance was made for consideration. See Kutsenkow v. Kutsenkow, 414 Pa. 610, 202 A.2d 68 (1964); Bosler v. Sun Oil Co., 325 Pa. 411, 190 A. 718 (1937); Restatement of Restitution § 163, Com*415ment b & Illustration 2 (1937).4 It must be emphasized, however, that in the instant case appellant received no consideration for his conveyance of the property in question.

¶7With regard to gratuitous conveyances such as the one here involved the courts of this state have developed no clear rule. It was held in Greenfield’s Estate, 14 Pa. 489 (1850) that a gratuitous conveyance of real property could not be set aside on the ground that the grantor was not aware of its contents.5 But later, in Shedwick v. Prospect Methodist Episcopal Church, 160 Pa. 57, 28 A. 499 (1894), this Court held that a grantor who conveys by deed of gift more land than he had intended to grant may have the deed reformed to reflect to his actual intent. The decision in Shedwickis consistent with the rule which has been applied in other jurisdictions 6 and in my view mandates the granting of relief in the instant case.

¶8Moreover, the decisions of this Court in cases involving other types of transactions militate in favor of the granting of relief for unilateral mistake in the gratuitous conveyance of real estate. It has been held, for example, that a settlor of a trust who executed the trust instrument under a mistake may have the document reformed *416to conform to his true intent,7 that an executor who pays money to one whom he mistakenly believes to be a legatee under the will of his testator is entitled to recover the money paid,8 and that a bank which mistakenly causes mortgages of which it is the holder to be satisfied of record may have the satisfactions stricken from the record and the mortgages reinstated.9 Moreover, it is “horn-book law” that an intention to make a gift is an essential ingredient in the making of a valid gift of personal property.10 I see no logic in insuring that a person may not relinquish ownership of a trinket or a small sum of money unless he has the specific intent to do so, while allowing him inadvertently to give away real estate of great value without any intent to do so.

¶9The Restatement of Restitution (1937) also supports the view that persons who make gratuitous transfers of real property under a unilateral mistake of material fact are entitled to relief. Section 163 of the Restatement provides:

“Where the owner of property transfers it as a result of a mistake of such character that he is entitled to restitution, the transferee holds the property upon a constructive trust for him.”

¶10This black letter statement is amplified with respect to unilateral mistake in Comment b to the Section. That Comment states in part that “[w]here a person in a gift transaction confers a benefit upon another as a result of *417a mistake of fact, he is entitled to restitution even though the other did not share in the mistake and did not know of or suspect its existence (see § 26).” Section 26, in turn provides that one who mistakenly makes a gift to another is entitled to restitution if the mistake “was as to the identity or relationship of the donee or as to some other basic fact. . . . ” (Emphasis added) ,11

¶11Finally, Professor Scott succinctly summarizes the general state of the law in his treatise on trusts:

“Where property is conveyed under a mistake in which both parties share, or where the grantor makes a mistake of which the grantee knows, the grantor can set aside the transaction even though value was given for the transfer. Where the transfer was made under a mistake which the grantee did not share and of which he did not know, the transfer can be set aside if it was made by way of gift. Such a unilateral mistake, however, is not a sufficient ground for rescission where the grantee gave consideration for the property.” V A. Scott, Trusts § 465.1 (3rd ed. 1967). (Emphasis supplied).

¶12I am satisfied that the granting of relief to rectify a unilateral basic mistake in the making of a gratuitous transfer of property is in accord with the weight of authority and properly recognizes the equities which inhere in such transactions. Clearly the expectations of a donee are less worthy of protection than are those of a transferee who gives value for the property transferred. See Dobbs, Remedies § 11.11 at 779 (1973). Between the mistaken donor and the innocent donee, the latter should bear the risk of mistake — at least until such time as the donee has changed position in reliance upon the transfer or circumstances have otherwise altered so as to make in*418equitable the return of the property. See Restatement of Restitution §§ 648-69 (1937).12

¶13In sum, appellant’s evidence, which for the purposes of this appeal must be accepted as true, established that he never intended to transfer the property in question to his wife. It may be that the act of signing the deed was the result of naivete, stupidity or even negligence, but I cannot perceive of a mistake more basic in the making of a transfer or property than a misunderstanding of the very nature of the transaction. I would hold, therefore, that on this ground also appellant made a prima facie showing that the appellee took the property interest transferred to her as a constructive trustee.