24 FEDERAL REPORTER.
the " pure, voluntary, well-understood act ofthe donor’s mind," Lord BROUGHAM says:
" N0 law that is tolerable among civilized men—men who have the benefits of civility
without the evils of excessive refmernem: and overdone subt1ety—can ever forbid such
a, transaction, provided the client be of mature age and sound mind, and there be noth-
ing to show that deception was practiced, or that the attorney or solicitor availed him-
self of his situation to withhold any knowledge, or to exercise any induence hurtful no
others and advantageous to himself." Lord ELDON himselt} in Harris v. Tremenheere,
15 Ves. J 1·.34, recognizes thc distinction between the two relations by applying a differ-
ent rule to the case 0fa mere agent from that he had laid down in the case 0f Huguenin
v. Baseley, 14 Ves. 273. The leading American case 011 this branch of the subject, is
that of Uhlich v. Muhlke, 61 I11. 499, in which a. very large gift, made by a principal
advanced in years to an agent, was upheld, under somewhat extraordinary circum-
stances, because upon review of all thc facts it appeared that the conduct ofthe agent
had been honest, and that he had not abused the coniidence reposed in him. Thcmost
frequent application of the doctrine of confidential relations to the law of principal
and agent ns in those cases where an agent to buy sells from himself] or an agent to sell
~ is himself the pwnhaser. In such case the transaction may be set aside at the instance
of the principal upon the ground of fraud in the abuse of trust. The difference be-
tween cases 0 sales and gifts by agents to principals will appear b comparing Harris v.
Tremenheere and Uhlich v. M uhlke, supra., with McCormick v. Maidn, 5 Blacktl 509. The
principle that in dealings with each other partners are held to the utmost good faith, and
that equity will set aside any undue advantage obtained by one over another, also rests
upon the same ground of confidence, and not of any presumption of dominion. The
mere fact that the donor had very great confidence in the donee raises no adverse pre-
sumption. The qgxesnion is, was the conduct 0f the party receiving the gratuity honest,
and was the gift t s voluntary act of the donor? Toker v. Toker, 31 Beav. 629; Pratt ,
v. Barker, 1 Sim. 1; S. C. 4 Russ. 509; Pressly v. Keamp, 42 Amer. Rep. 635.
4. Drswmcrxvm Fmmunms ov Tm: Two Gxsours. The ibllowing distinctions have been
established bir the decisions between the two groups of con Fndential relations. These dis-
tinccions cou d not be justified except for the broad discrimination which diifcrentiatcs
the two classes. First. In the case of a gift by a person sustaining any relation in which
dominion is implied, there is a presumption of law against its validity. In case of gift
by principal to an agent the onus is on the fnarty assailing im. Smith v. Kay, 7 H. L. Cas.
751, 759. Second. In case of coniidentia relations within the first group, the law pro-
hibits a. gift during their continuance, and until such a, time afterwards that the person
subject to the dominion is presumed to be " emancipated " from it. The law permits az
gift by an agent to his principal during the contain uance ofthe relation. Hunter v. Atkins,
Uhlich v. Mulhke, supra., Third. In cases falling within the first group, the courts attach
very great importance to the fact whether the donee had independent advice. In case of
gift by agent to his principal this is declared to be immaterial. Principal case, and au-
thorities cited. The matzerxal inquiry, therefore, in scanning a transaction between a. prin- ,
cipal amd agent, is simply this: Has the agent, who, by means of his knowledge ofthe
p1·incipal‘s business, acquired an intimate acquaintance with his affairs, and who pos-
sesses the confidence 0f his principal, made use ofthab knowledge to mislead and defraud
’ his principal, and to abuse and-betray the confidence which has been reposed in him. The
material inquiry in cases in the first grou is: Has undue advantage been taken of the
supremacy growing out ofthe I'61B.ti01l.···H18»S undue iniiuence been exercised?
Macon, Ga. WALTER B. Hu.:..
NOTE.
G1]? qf Real Estate.
1. CONFIDENTIAL OB F1DUcrAmr Rmmvrxcns. Transactions between persons sustaim
ing relations of trust and confidence, particularly where the stronger and controlling
mind has obtained an advantage, ure regarded with suspicion. Sprague v. Hall, 17 N.
W. Rep. 743. See, also, O’De1l v. Burnham, 21 N. W. Rep. 635.
2. Dm;rNKnN1~:mss. It cannot be said that because a man is an habitual drunkard
that he is consequently of unsound mind. Estate of Lang, 2 Pac Rep. 49: .
3. FRAUD. Must be pleaded and proven prejudicial, Missouri Valley Land C0. v.
Bushnell, 8 N. W. Rep. 389, and the pleadings must state facts which show conduct
complained of to be fraudulent. Lafayette O0. v. Neely, 21 Fed. Rep. 738. Fraud is a..
question of fact, to be determined from all the circumstances in the case. Knowlton
v. Mish, 17 Fed. Rep. 198. Must be clearly established, Fick v. Mulholland, 4 N. W.
~ Rep. 527; Campau v. Laifcrty, 15 N. W. Rep. 40; Lnvassar v. Washburne, 6 N. W. Rep.
516; but does not have to be proven beyond a reasonable doubt. Wood v. Parser, 9 N.
W Rep. 113 Must be proven as alleged. Fairburn v. Goldsmith, 12 N. W. Rep. 273.
May be shown by pam], to impeach written instrument. Day v. Lown, 1 N. W. Rep.
786 ; Tufts v. Tufts, 3 Pac, Rep. 390. Burden of proof is on him who alleges. Eckert v.
Picke., 13 N. W. Rep. 708. When shifts to defendant, and he required to show fain
 W WW