III. Presumptions and burden of proof. 1. Concerning persons. a. Fraud and illegality in contracts are not to be presumed. United States v. TransMissouri Freight Asso. 24 L.R.A. 73, 58 Fed. 58, 7 C. C. A. 15, rev'd in 166 U. S. 290, 41 L. ed. 1907, 17 Sup. Ct. Rep. 540. b. The burden is on the other party to show that a contract with an infant was fair and reasonable and free from any fraud or overreaching on his part. Johnson v. Northwestern M. L. Ins. Co. 26 L.R.A. 187, 56 Minn. 365, 57 N. W. 934. c. The law will presume fraud from the condition of the parties in the case of a contract with a person so insane as to be wholly incompetent. Sprinkle v. Wellborn, 3 L.R.A. (N.S.) 174, 140 N. C. 163, 52 S. E. 666. d. The burden of proving false representation rests upon the party alleging it, when the object is to overthrow a contract actually made and accepted. Supreme Council, G. & F. v. Conklin, 41 L.R.A. 449, 60 N. J. L. 565, 38 Atl. 659. a, b. Where parties occupy fiduciary relation, see Burden of proof generally in action to set a. A seller of goods procured from him by fraud has the burden of showing participation by a subsequent purchaser in the fraudulent acts by which the goods were procured. Morrow Shoe Mfg. Co. v. New England Shoe Co. 24 L.R.A. 417, 57 Fed. 685, 60 Fed. 341, 6 C. C. A. 508, 8 C. C. A. 652. b. One who, in defense to an action for the contract price of a machine sold and delivered, pleads that the execution of the contract was induced by fraud, has the burden of establishing that fact by a preponderance of the evidence. National Cash Register Co. v. Townsend, 70 L.R.A. 349, 137 N. C. 652, 50 S. E. 306. e. A presumption that a buyer did not intend to pay for goods arises from the fact that his affairs were in such a condition that he could have had no reasonable expectation of paying therefor. Gillespie v. J. C. Piles & Co. 44 L.R.A. (N.S.) 1, 178 Fed. 886, 102 C. C. A. 120. at the option of the original seller. Ditton v. Purcell, 36 L.R.A. (N.S.) 149, 21 N. D. 648, 132 N. W. 347. e. Incorporating a detachable promissory note in an elaborate and ingeniously enticing order for merchandise which is printed in fine type, with blanks for signatures in several places, is presumptively fraudulent. Stevens v. Venema, L.R.A.1918F, 1145, 202 Mich. 232, 168 N. W. 531. f. The mere opinion of a buyer of land that the seller, in erroneously pointing out land as part of that sold, was honestly mistaken, does not relieve the seller from the duty of overcoming the prima facie case of deceit made against him by evidence that the statement was false. Vincent v. Corbitt, 21 L.R.A. (N.S.) 85, 94 Miss. 46, 47 So. 641. g. Upon proof by a purchaser of land, a former deed to which is unrecorded, of payment of a valuable consideration therefor, the presumption arises that he acted in good faith and without notice of the rights of claimants under the unrecorded deed. Conklin v. Kruse, 36 L.R.A. (N.S.) 1124, 82 Kan. 358, 108 Pac. 856. (Annotated) h. The burden resting upon a purchaser evidence the good faith of his purchase does of real property to establish by competent not shift to the holder of a prior unrecorded deed, upon the introduction of evidence makv. Wheeler, 26 L.R.A. (N.S.) 816, 109 Minn. ing a prima facie case of bona fides. Errett 157, 123 N. W. 414. i. In an action to set aside a conveyance of property on the ground of fraud the burden of proof does not shift to the defendant upon a prima facie showing being made on the part of the plaintiff. Boardman v. Lorentzen, 52 L.R.A. (N.S.) 476, 155 Wis. 566, 145 N. W. 750. j. One relying on fraud to defeat a quitclaim deed must allege and prove it. Strong v. Whybark, 12 L.R.A. (N.S.) 240, 204 Mo. 341, 102 S. W. 968. § 227. -in insurance. a. The burden is on the insurer to show materiality of a concealment by an applicant for life insurance, as well as fraudulent intent, for the purpose of avoiding the policy. Penn Mut. L. Ins. Co. v. Mechanics' Sav. Bank & T. Co. 38 L.R.A. 33, 72 Fed. 413, 73 Fed. 653, 19 C. C. A. 286, 19 C. C. A. 316. § 228. - in release. d. One who purchases personal property Evidence as to generally, see post, § 1206. from another who secured it by fraud has Sufficiency of evidence as to, see post, § 1443. the burden of proving his good-faith purchase without knowledge of fraud, or acts a. The burden of showing that a release imputing notice sufficient to put him on was obtained by fraud and deceit is upon inquiry as to the fraud of his vendor when the one who signed it and who is attempting such fraud has been once established, other- to avoid its effect. Och v. Missouri, K. & wise he takes no title superior to that pos- T. R. Co. 36 L.R.A. 442, 130 Mo. 27, 31 S. sessed by his vendor, which is one voidable W. 962. III. Presumptions and burden of proof. 1. Concerning persons, § 229.-reliance on representations made. a. There is no presumption of law that one § 230. -fiduciary relation. See also FIDUCIARY RELATIONS, § 1 e. a. One occupying a fiduciary relation to another, and obtaining an advantage by reason of that relation, is presumed to have obtained that advantage fraudulently. Orth v. Orth, 32 L.R.A. 298, 145 Ind. 184, 42 N. E. 277, 44 N. E. 17. b. The rule that one who, standing in a fiduciary relation to another, obtains an advantage from him, is presumed to have obtained it fraudulently, does not apply to the case of a testamentary provision by a husband in favor of his wife. Orth v. Orth, 32 L.R.A. 298, 145 Ind. 184, 42 N. E. 277, 44 N. E. 17. c. No presumption of dishonest or dishonorable conduct on the part of the directors of a corporation can be indulged after they and most of their original associates are dead. Seymour v. Spring Forest Cemetery Asso. 26 L.R.A. 859, 144 N. Y. 333, 39 N. E. 365. d. The intimate and fiduciary character of directors in their relations to a corporation places upon them the burden of proving their absolute good faith and the perfect justice of their demands, in dealings between themselves and the corporation. American Exch. Nat. Bank v. Ward, 55 L.R.A. 356, 111 Fed. 782, 49 C. C. A. 611. e. When two parties stand toward each other in any relation which necessarily induces one to put confidence in the other and gives to the latter the influence which naturally grows out of such confidence and a sale is made by the former to the latter, equity raises a presumption against the validity of the transaction and to sustain it the buyer must affirmatively show that the transaction was conducted in perfect good faith, without pressure of influence on his part, with complete knowledge of the situation and circumstances and of entire freedom of action on the part of the seller. Crocheron v. Savage, 23 L.R.A. (N.S.) 679, 75 N. J. Eq. 589, 73 Atl. 33. f. When two parties occupy to each other a confidential or fiduciary relation, and a sale is made by the party reposing confidence to the party in whom confidence is reposed, equity raises a presumption against the validity of the transaction; and to sustain the sale the buyer must show affirmatively that the transaction was conducted in good faith, without pressure of influence on his part, and with express knowledge of the circumstances and entire freedom of action on the part of the seller. Stewart v. Harris, 66 L.R.A. 261, 69 Kan. 498, 77 Pac. 277. g. A conveyance by one to his general agent having control and management of all his affairs, and who is his confidential adviser and friend, is presumed in law to be fraudulent; and the grantee has the burden of overcoming the presumption. Smith v. Moore, 7 L.R.A. (N.S.) 684, 142 N. C. 277, 55 S. E. 275. clients, and resell the subject-matter of i. The burden is on the attorney to show that in any contract or settlement with his client, or dealing with his client's property, he has acted in fairness and good faith with a disclosure of all the facts. Donaldson v. Eaton, 14 L.R.A. (N.S.) 1168, 136 Iowa, 650, 114 N. W. 19. § 231. Fraudulent conveyances or as- Presumption of fraud from mortgagor's re- a. If the necessary effect and operation of a conveyance be to hinder, delay, or defraud the maker's creditors, the legal presumption is that it was made for the purpose. Riley v. Carter, 19 L.R.A. 489, 76 Md. 581, 25 Atl. 667. b. It is incumbent on a creditor who complains of a fraudulent conveyance to show that his debtor has disposed of property that might otherwise have been subjected to the satisfaction of his debt. Campbell v. Jones, 6 L.R.A. 783, 52 Ark. 493, 12 S. W. 1016. c. The burden is upon one attacking a conveyance as in fraud of creditors to prove that the transfer was not made in good faith, with honest motives, and for a valuable consideration. Brasie v. Minneapolis Brewing Co. 67 L.R.A. 865, 87 Minn. 456, 92 N. W. 340. d. In a suit by a trustee in bankruptcy to set aside an alleged preferential payment by the bankrupt the burden of proof f. Concerning persons. III. Presumptions and burden of proof. is on him and unless he shows by sufficient & P. Co. L.R.A.1916D, 1138, 138 La. 743, evidence the elements of a voidable prefer- 70 So. 789. ence he is not entitled to recover. Tumlin v. Bryan, 21 L.R.A. (N.S.) 960, 165 Fed. 166, 91 C. C. A. 200. e. In a case where the title of a vendee is attacked because of the intent of the vendor to defraud his creditors by the transfer, those making the attack assume the burden of proving that the vendee had knowledge of and participated in the fraud. This is to be proved as a fact, and not to be imputed by any rule of law. Van Raalte v. Harrington, 11 L.R.A. 424, 101 Mo. 602, 14 S. W. 710. 1. A grant to the use of the grantor, or reserving a benefit to him, does not raise a presumption of actual evil intent in the grantee, but to impute or show bad faith in the grantee, whether by construction merely or as a fact, it must appear, in addition to such trust or reservation, that the grantee was charged with inquiry into the purposes of the grant by a knowledge of the grantor's insolvency, or at least, of the fact that he was indebted. Hayes v. Westcott, 11 L.R.A. 488, 91 Ala. 143, 8 So. f. An attaching creditor of one purchas- m. Proof that a pledgee of goods from ing property subsequent to an unrecorded a retail dealer knew that the latter was bedeed, must, in order to claim the benefiting pressed by his creditors, and was pledgof the recording acts, prove that his debtor ing goods not paid for; that the goods were was a bona fide purchaser for value. Jennings v. Lentz, 29 L.R.A. (N.S.) 584, 50 Or. 483, 93 Pac. 327. g. The statutory presumption of fraud which arises from the retention of a chattel by the vendor may be overthrown by proof by the vendee that the sale was in good faith and without intent to injure, delay, or defraud creditors or subsequent purchasers. Wilson v. Walrath, 24 L.R.A. (N.S.) 1127, 103 Minn. 412, 115 N. W. 203. h. Under a statute providing that a conveyance intended to defraud creditors is void as to creditors, but that the title of a purchaser for value shall not be affected unless he had notice of the fraud, the creditor, to defeat the sale, must show the fraudulent intent. When this is done, the purchaser, to sustain the transaction, must show that he paid value; after which the creditor, to prevail, must prove that the purchaser had notice of the fraud. Tillman v. Heller, 11 L.R.A. 628, 78 Tex. 597, 14 S. W. 700. 337. in larger quantities than was called for by the business, were deposited in a warehouse away from such business, with all marks erased from the original packages; and that they were transferred on such terms as precluded redemption, without any inquiry on the part of such pledgee; and that the latter made false statements as to previous loans to a receiver of the property of the pledgeor, is sufficient to throw upon such pledgee the burden of explaining the transaction and showing himself to be a bona fide holder. Morrow Shoe Co. v. New England Shoe Co. 24 L.R.A. 417, 57 Fed. 685, 6 C. C. A. 508, 60 Fed. 341, 8 C. C. A. 652. § 232. -between relatives or husband and wife. a. Neither active nor constructive fraud will be presumed from the fact alone of the relationship of the parties in a transaction by which a husband conveys, without valuable consideration, land to his wife. Clester v. Clester, L.R.A.1915E, 648, 90 Kan. 638, 135 Pac. 996. i. A judgment creditor of a legatee, who b. In a creditor's suit to set aside a conattempts to set aside an assignment of the veyance by a debtor to a near relative, allegacy as in fraud of his rights, has the bur-leged to have been made in consideration of den of showing the fraud. Beaver v. Ross, 20 L.R.A. (N.S.) 65, 140 Iowa, 154, 118 N. W. 287. j. That the consideration for a transfer of corporate stock between persons not related was paid to the grantor's near relative, upon assignment thereof, does not change the rule imposing on the party as sailing the transaction the burden of proving it fraudulent. Everitt v. Farmers' & M. Bank, 20 L.R.A. (N.S.) 996, 82 Neb. 191, 117 N. W. 401. a past-due indebtedness, the burden is upon the grantee to show that the debt is genuine, that his purpose was honest, and that he acted in good faith in obtaining the title. Flint v. Chaloupka, 13 L.R.A. (N.S.) 309, 78 Neb. 594, 111 N. W. 465. c. The burden of proof is on the party asserting that the consideration of a purchase of land in the name of a woman was furnished by her husband. Hedge v. Glenny, 1 L.R.A. 479, 75 Iowa, 513, 39 N. W. 818. k. The burden of proving that a convey- d. In a contest between a wife and a ance by one corporation of its entire prop- creditor of her husband over property transerty, including its business, to another un- ferred to her by him after the debt was der circumstances disclosing the earmarks contracted, she must establish that she is of a transaction between persons dealing a bona fide purchaser by a preponderance with themselves, was bona fide, for an ade- of the evidence. Stevens v. Carson, 9 L.R.A. quate consideration, and not in effect a mere 523, 27 Neb. 501, 43 N. W. 361. reorganization or merger of the two companies, rests upon them in an action in tort against them on a claim arising before the conveyance, especially where the transfer was made by a domestic corporation to a foreign one. Wolff v. Shreveport Gas, E. L. e. The burden is on the wife to establish that her husband took and used her separate estate, where a conveyance to secure her therefor is attacked by creditors as voluntary or fraudulent; but when that fact is established, whether such taking was III. Presumptions and burden of proof. f. Concerning persons. with or without her consent, the burden a. A conveyance of lands without a valuthen shifts, and those claiming that such taking and use were by gift of the wife must establish such gift to the husband. Adoue v. Spencer, 56 L.R.A. 817, 62 N. J. Eq. 782, 49 Atl. 10. 908. able consideration, by one who is indebted at the time, is presumptively a fraud upon his creditors, who have an equitable right to set it aside or to avoid it, at least to the (Annotated) extent of the debts due them. Flynn v. f. The fact that the wife had posses- Baisley, 45 L.R.A. 645, 35 Or. 268, 57 Pac. sion of the property, claiming ownership, when it was attached by the creditor of the husband, does not relieve her of the burden of proving that the transfer was not made to her for the purpose of hindering, delaying, and defrauding such creditor. Stevens v. Carson, 9 L.R.A. 523, 27 Neb. 501, 43 N. W. 361. g. In order to sustain a conveyance of land by a husband to his wife, both being domiciled in another state, which is claimed to have been made in consideration of an indebtedness of the husband to the wife for money said to have belonged to her, and to have been received and used by the husband, it must be shown that by reason of such receipt and use the husband became the debtor of the wife, that the debt existed at the time of the conveyance, and that the property was conveyed in satisfaction, or in part satisfaction, of such debt. Rush v. Landers, 57 L.R.A. 353, 107 La. 549, 32 So. 95. h. Where answers of a wife to interrogatories propounded to her by creditors of her husband show that property in another state had been conveyed by the husband to her for a particular consideration arising under the laws of that state, the court will not assume, even though it should be made to appear that such consideration was inadequate, that a different consideration, testified to as moving in the matter of the conveyance of property in the state, was therefore included and exhausted for the purposes of the conveyance in such other state. Rush v. Landers, 57 L.R.A. 353, 107 La. 549, 32 So. 95. § 234. Conveyances in fraud of wife. a. A prima facie case of fraud on a wife's marital rights in her husband's estate exists where, without her knowledge, he gives, either before or after marriage, all or the greater portion of his property to his children by a former marriage. Murray v. Murray, 8 L.R.A. 95, 90 Ky. 1, 13 S. W. 244. b. Where a husband, with notice that a divorce proceeding is about to be commenced against him, or with notice of such facts as would reasonably apprise him of this fact, conveys his property to an infant son, the offspring of a marriage with a former wife, and the purpose is apparent that such conveyance is made to defeat a decree for alimony, the burden of proof is upon the grantee to show a valuable consideration, or that such conveyance would not tend to defeat any alimony that might be granted in such divorce proceedings; and the burden of proof in such case is not upon the plaintiff in the divorce proceedings to show insolvency of the grantor. Bennett v. Bennett, 70 L.R.A. 864, 15 Okla. 286, 81 Pac. 632. § 235. Undue influence. sideration for negotiable paper in case Evidence as to generally, see post, §§ 1212, 1213. Sufficiency of evidence as to, see post, §§ 1450, 1451. See also post, § 237 b; TRUSTs, § 37 b. a. Undue influence cannot, in a case where no relation of trust exists, be presumed, but must be proved. Middleditch v. Williams, 4 L.R.A. 738, 45 N. J. Eq. 726, 17 Atl. 826. i. If a sale of property by a husband to his wife is attacked by a party in interest, and the conveyance appears on its face to be invalid because the consideration expressed s not within the exceptions of La. Civ. Code, art. 2446, prohibiting sales between husband b. In a controversy as to whether propand wife except in certain cases, the bur-erty was obtained by undue influence there den of proof is on the party seeking to main- is an evidentiary presumption in favor of tain the validity of the conveyance to show the person charged, the same as in all cases that the real consideration was different sounding in fraud, that he did not perpefrom that expressed, and was within the ex-trate the wrong. Boardman v. Lorentzen, ceptions provided by the law. Rush v. Lan- 52 L.R.A. (N.S.) 476, 155 Wis. 566, 145 N. ders, 57 L.R.A. 353, 107 La. 549, 32 So. 95. W. 750. j. A wife who turns remittances from c. Power, notice, and opportunity to exher husband into a business which she car-ercise undue influence do not alone authorries on in partnership with a third person, ize the inference that such influence has in and out of which both families are sup- fact been exercised. Ginter v. Ginter, 22 ported, has the burden of proving, as against L.R.A. (N.S.) 1024, 79 Kan. 721, 101 Pac. the husband's creditors, that their rights 634. have not been injured thereby, and that an d. A presumption of undue influer.ce equivalent sum was properly and actually arises from a transaction between a conconsumed by the husband's family. Tre-fidential adviser and general manager and fethen v. Lynam, 38 L.R.A. 190, 90 Me. 376, the person whose agent he is. Re Allred, 38 Atl. 335. L.R.A.1916C, 946, 170 N. C. 153, 86 S. E. 1047. § 233. - lack of consideration. Presumption of undue influence, see post, §§ 235, 236. e. The existence of a confidential relation creates a presumption of influence which III. Presumptions and burden of proof. f. Concerning persons. may be rebutted by proof that the parties § 236. in procuring will. dealt as strangers and that no unfairness Sufficiency of evidence as to, see post, § 1451. was used; that the facts in the knowledge See also ante, § 200 d. of the one in the superior position affecting the matter were communicated to the oth er; that the entire transaction was made in perfect good faith and was equitable and just. Hobbs v. Monarch Refrigerating Co. L.R.A.1917D, 847, 277 Ill. 326, 115 N. E. a. The burden of proof for overcoming the presumption that a contested will which appears to have been duly executed and attested is valid is upon whoever alleges it to be the product of undue influence or fraud. Ginter v. Ginter, 22 L.R.A. (N.S.) 1024, 79 Kan. 721, 101 Pac. 634. b. The mere existence of confidential relations between a testator and a beneficiary under his will does not raise a presumption that the beneficiary has exercised undue influence over the testator, and does not cast upon the beneficiary the burden of disproving undue influence, but those consequences follow only when the beneficiary has been actively concerned in some way with the preparation or execution of the will. Ginter v. Ginter, 22 L.R.A. (N.S.) 1024, 79 Kan. 721, 101 Pac. 634. g. The law presumes that a gift made by the parent to the child when the normal relation of parent and child has been reversed and the latter has become the guardian of the former is the product of undue influence and casts upon the child the bur-cised upon the testatrix, and in so doing it den of proving the contrary. Slack v. Rees, 69 L.R.A. 393, 66 N. J. Eq. 447, 59 Atl. 466. h. In the case of a gift or voluntary conveyance inter vivos, where the donor is a widow enfeebled in mind by disease or old 245. age, and the person benefited is her son, with whom she makes her home, equity raises the presumption that the gift or voluntary conveyance was brought about by undue influence, and the burden is upon the party benefited to show affirmatively that the transaction was fairly conducted as if between strangers. Smith v. Smith, 35 L.R.A. (N.S.) 944, 84 Kan. 242, 114 Pac. (Annotated) i. A physician suing on a contract with his patient made while the relation existed must show by a preponderance of the evidence, that the patient entered into the. transaction voluntarily, deliberately and advisedly, knowing its nature and effect and that her consent was not obtained by reason of the power and influence to which the relationship might be supposed to give rise. Re McVicker, 28 L.R.A. (N.S.) 1112, 245 Ill. 180, 91 N. E. 1041. con j. A physician who enters into a tract with his patient is not bound, in order to sustain the validity of the contract, to show that the patient had independent and competent advice before executing the contract. Re McVicker, 28 L.R.A. (N.S.) 1112, 245 III. 180, 91 N. E. 1041. his nurse, k. One contesting the validity of a note given by a practically helpless invalid to on the ground of undue influence, has the burden of establishing such influence by a preponderance of the evidence. Meginnes v. Copeland, L.R.A.1917E, 1060, 179 Iowa, 563, 160 N. W. 50. 1. The presumption of undue influence in case of gifts from a man to his mistress is one of fact. Platt v. Elias, 11 L.R.A. (N.S.) 554, 186 N. Y. 374, 79 N. E. 1. (Annotated) c. The burden is upon the contestants of a will to establish undue influence exer is not enough to show that the circumstances attending the execution of the will are consistent with the hypothesis that it it must be shown that such circumstances may have been obtained by undue influence; are inconsistent with a contrary hypothesis. Re Spier, L.R.A.1916E, 692, 99 Neb. 853, 157 N. W. 1014. d. Undue influence in the making of a will cannot be inferred from the mere fact that it was in favor of one with whom testator had maintained illicit relations, and was contrary to his expressed intention of who had cared for him in his youth. Saxleaving his property to a dependent sister, ton v. Krumm, 17 L.R.A. (N.S.) 477, 107 (Annotated) Md. 393, 68 Atl. 1056. natural objects of the testator's bounty e. The giving of unequal portions to the raises no presumption of undue influence, although, where there is proof of undue influence, that fact may be considered in deof the testator. Ginter v. Ginter, 22 L.R.A. termining whether or not the will is that (N.S.) 1024, 79 Kan. 721, 101 Pac. 634. (Annotated) f. No presumption of undue influence arises to overthrow a will of a man old and him and looks after his business, although blind, in favor of his son who remains with he is his confidential adviser and general N. C. 153, 86 S. E. 1047. Re Allred, L.R.A.1916C, 946, 170 manager. g. Undue influence resulting in a favorable will cannot be inferred alone from motive or opportunity, but there must also be some testimony, either direct or circumstantial, to show that undue influence not only existed, but that it was exercised with respect to the making of the will itself.__Re Shell, 53 L.R.A. 387, 28 Colo. 167, 63 Pac. 413. h. That a will is drafted by a daughter of the testator, and that she is named therein as the executrix, does not raise a presumption of undue influence, where she |