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Duncan v. Hensley - 248 Ark. 1083, 455 S.W.2d 113 (1970)

Rule:

Fraud may be proved by circumstantial evidence or by a combination of direct and circumstantial evidence. In a court of equity, where bad faith and unconscionable acts can have no allowance or favor, the strength of mental capacity of the parties, the circumstances surrounding them, their relationship, et cetera, make up the grounds upon which the court can find the real influences that produced the conveyance. And when it is discovered that the party in whose favor the conveyance was made possessed an undue advantage over the grantor, and in person, or by agent, exercised an improper influence over such one, and to the advantage of the grantee, it is an act against conscience and within the cognizance of a court of equity. The same rule is applicable where duress is alleged.

Facts:

Joyce Hensley, grantor, and Graddy Duncan, grantee were married at a time when Joyce was conducting negotiations for the purchase of a ranch. After the purchase was consummated, title being taken in the name of both parties. The parties operated a ranching operation on the lands for approximately three years. The ranch was then sold, and a portion of the proceeds of the sale were used in purchasing the lands in issue. Joyce and Graddy entered into a property settlement agreement in contemplation of divorce. Joyce brought this action, alleging that the instruments were executed as a result of threats of great bodily harm and injury to her and were without consideration. Graddy and his current wife, Margarett, sought review from the decree of the trial court cancelling the deed to Graddy, which conveyed the real property, as well the bill of sale conveying to him certain personal property, both executed and delivered to Graddy by the grantor, Joyce. 

Issue:

Did the trial court err in allowing evidence going to the financial condition of the parties and the relationship existing between them prior to their divorce decree?

Answer:

No

Conclusion:

The Arkansas Supreme Court held that when the trial court permits the introduction of evidence in the face of an objection that the point at issue was not raised by the pleadings, the effect of its ruling is to treat the pleadings as amended to conform to the proof. In so doing the Chancellor did not abuse his discretion. Joyce, as plaintiff, was required to prove fraud by clear, cogent and convincing testimony, either by circumstantial evidence or by a combination of direct and circumstantial evidence. Reaffirming and approving its prior statement, the Court quoted: And in a court of equity, where bad faith and unconscionable acts can have no allowance or favor, the strength of mental capacity of the parties, the circumstances surrounding them, their relationship, etc., make up the grounds upon which the court can find the real influences that produced the conveyance. And when it is discovered that the party in whose favor the conveyance was made possessed an undue advantage over the grantor, and in person, or by agent, exercised an improper influence over such one, and to the advantage of the grantee, it is an act against conscience and within the cognizance of a court of equity."

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