Opinion
Argued November 18, 1955
Decided November 30, 1955
Appeal from the Supreme Court, Appellate Division, First Department, GREENBERG, J.
Charles G. Coster, John F.X. Finn and Carmelo J. Pernicone for appellant. Myron Sulzberger, Jr., and Seymour S. Epstein for respondent.
In 1923 John A. Cassidy, an employee of the City of New York, designated his wife as sole beneficiary of his retirement fund benefits. On May 15, 1951, he executed Option 1, pursuant to the provisions of the retirement system and made his wife and his sister cobeneficiaries. The defendant and a commissioner of deeds were the only persons present when the decedent executed his retirement papers. Decedent died on August 15, 1951.
The wife of decedent then brought this suit in equity against decedent's sister seeking a judgment declaring defendant to be a constructive trustee for the plaintiff of upwards of $18,000, which represents one half of decedent's retirement fund benefit. The wife's complaint alleges fraud and undue influence in the execution of Option 1 in that it is claimed that the defendant falsely represented to decedent that it was designed to provide all the benefits for his wife; that decedent believed the representations and that he was in such a weak mental and physical state as to be unable to control his will and was prevailed upon by defendant to execute the option.
Defendant rested at the close of plaintiff's case and the trial court dismissed on the merits. On appeal, the Appellate Division reversed and granted a new trial upon the theory that the sister "owed an explanation" to the plaintiff and the court ( 283 App. Div. 618, 620). On the second trial, Special Term found for the plaintiff holding that the sister not only had to explain the circumstances surrounding the transaction, but had to carry the burden of proof; that the sister gave no explanation and "in the Court's judgment, no persuasive explanation could have been given." The Appellate Division has affirmed.
The burden of proving the allegations necessary to warrant the imposition of a constructive trust was upon the plaintiff. Had the plaintiff demonstrated fraud and undue influence, prima facie, while the ultimate burden would not shift, the burden of going forward with evidence would have passed to the defendant. However, the plaintiff introduced no evidence to support her allegations of fraud or undue influence. Nor did plaintiff demonstrate, prima facie, that the relationship between the defendant and her brother was of a confidential nature so as to cast upon the defendant the burden of going forward with evidence to show that there had been no abuse of such relationship. Not only was the defendant required to show the facts and circumstances surrounding the execution of the option, as the Appellate Division had on the first appeal suggested, but Special Term incorrectly shifted the burden of proof from the plaintiff to defendant so as to require the defendant to probe the mind of the decedent and explore the mental processes which led to and caused him to designate the cobeneficiaries whom he did. The judgment in favor of plaintiff must be reversed and the complaint dismissed for the reason that plaintiff failed to make out a prima facie case for the relief sought by her.
The judgment of the Appellate Division and that of Special Term should be reversed, and the complaint dismissed, with costs in all courts.
CONWAY, Ch. J., FULD, FROESSEL, VAN VOORHIS, BURKE and SCHMIDT, JJ., concur.
Designated pursuant to section 5 of article VI of the State Constitution in the temporary absence of DESMOND and DYE, JJ.
Judgments reversed, etc.