Section 17 Presumption of Fraud

• Library: Remedies 2006

The existence of a fiduciary relationship can cause a presumption of fraud and support the remedy of rescission or cancellation. Courts have been reticent to find such a presumption. But a conveyance from a client to an attorney is considered to be presumptively fraudulent. The burden is on the attorney to show by clear and convincing evidence that the transaction was fair and equitable in every respect. Laspy v. Anderson, 361 S.W.2d 680, 682 (Mo. 1962); Flanagan v. DeLapp, 533 S.W.2d 592, 596 (Mo. banc 1976). The presumption may also be available for other fiduciaries. For example, when a real estate broker becomes the purchaser without the seller’s knowledge and consent, the sale may be voidable at the option of the seller based on a presumption of fraud. Blakeley v. Bradley, 281 S.W.2d 835, 837–39 (Mo. 1955). The claim may also be valid against a bank, when the bank’s attorney...