Allen's Admr. v. Allen's Admr.

64 A. 1110, 79 Vt. 173, 1906 Vt. LEXIS 114

• Court: Supreme Court of Vermont
• Decided: October 29, 1906
• Status: Published

Opinion

Miles, J.

The first ground of objection to the action of the court below, is based upon the refusal of- that court to recommit the special master’s report. This objection cannot avail the defendant, because the recommittal of the report was a matter within the discretion of the chancellor, and no abuse of that discretion appearing, this Court will not review the action of that court. Lovejoy v. Churchill, 29 Vt. 151; Fuller v. Wright, 10 Vt. 512-514; Morse v. Beers, 51 Vt. 359; Robinson v. Dodge, 66 Vt. 595; Pease v. Stevens, 74 Vt. 215, and cases cited; Sowles v. Sartwell, 76 Vt. 70.

This holding dispenses with the necessity of considering the affidavits furnished with the case, for their only bearing was upon the question of recommittal. The defendants, however, argued to some extent, that they furnish ground for a new trial, because they show that the findings of the master are without the support of evidence. In this, we think the position of the defendants is not well taken, and that the affidavits do show that there was some evidence supporting each finding of the: master. Whether such evidence was sufficient to constitute ai fair balance upon all the facts reported, we have not considered, as that is unnecessary, in any view of the case, for this-Court will not revise or review the master’s findings, unless» fraud or corruption is shown, when there is evidence to sustaim them. Security Co. v. Bennington M. Association, 70 Vt. 201215, and cases cited; Sargent v. Burton, 74 Vt. 24-27. If this were not so, the affidavits could not be used for this purpose;, because this case is. not before us upon a petition for a new-trial, but it is an appeal from the action of the court below, and the grounds upon which the defendants seek a reversal are based upon the alleged errors of that court; and neither can they be used to set the report aside on the ground that it was unsupported by evidence; because those affidavits do not disclose all the evidence produced before the master and from which his report is made, so that this Court can say, if the affidavits themselves did not show it, whether there was or was not any such evidence before the master.

The defendants moved the court below for leave to file exceptions to the master’s report and rulings excluding evidence, but they do not urge upon us the refusal of the court to grant that motion, as a ground of error, but do urge that we, as a matter of equity, ought to- grant it and send down tp the court of chancery a mandate,to that effect. The case does not show that the master was requested in writing to report any testimony received or rejected by him, and the report does not show that any was received or rejected by him against the objection and exception of the defendants. Unless so requested the master is not obliged to state his decision in admitting or rejecting evidence, and may treat the objection as waived. Sec. 939, V. S.; Winship v. Waterman, 56 Vt. 181; Scofield v. Stoddard, 58 Vt. 290. Being waived, if they were ever made in fact, they stand as if they had never been made before the master, and not having been taken before the master, they could not be filed with the report in the court of chancery, and hence could not be considered by this Court. Sec. 942, V. S.; Winship v. Waterman, supra; Scofield v. Stoddard, supra; Bruce v. Life Ins. Co., 58 Vt. 253; Baxter, Admr. v. Blodgett et al., 63 Vt. 629.

The remaining question presented involves .the orator’s right to any decree as well as to the decree made, and as none of the testimony is before us, that right must be determined from the facts stated in the report of'the special master.

The orators rest their right to the decree rendered upon the claim, that their intestate, John M. Allen, on the 13th day of January, 1890, and from thence to the time of his death, had not sufficient mental capacity to make the contracts and deeds which the defendants claim' he then and subsequently made, and which the orators seek to avoid in this suit; and that undue influence was used upon him by the defendants’ testatrix and the defendant, Lee K. Osgood, to’ secure the execution of those deeds and contracts.

The master has found in express terms that John M. Allen, the orators’ intestate, was mentally incapable of properly understanding and comprehending the scope and effect of said deeds and contracts or of entering into- any valid contracts, deed or conveyance of the magnitude and importance of said deed and said contract and power of attorney, and that the signature of the orator’s intestate to the deed, contract and power of attorney was procured by the undue influence of the defendants’ testatrix and the defendant, Lee K. Osgood. These were findings upon the questions submitted to the master, and are findings upon the questions on which the orators’ right tO' the decree rendered, rests; and, if there is no legal or equitable objection to the master’s findings as stated, the orators are entitled to a decree.

The defendants, however, claim that these finding's of the special master are simply legal conclusions and are not findings of fact, and that he has not found any facts which justify him in reporting such conclusions, and that therefore, the finding being upon a mixed question of law and fact, unsupported by other facts, the decree of the court of chancery ought to be reversed and the bill dismissed.

It is true that, at least a part of that finding is upon a mixed question of law and fact. That part of the finding which states that the contract, deed, and, power of attorney were procured by the undue influence and fraud of Lucy J. and Lee K., is undoubtedly a finding based upon law and fact. The finding, that orators’ intestate “was mentally incapable of properly understanding and comprehending the scope and effect of said deed, contract and power of attorney, or of entering into any valid contract, deed or conveyance of the magnitude and importance of said deed and said contract and power of attorney,” is only a finding that the orators’ intestate was mentally incapable of understanding- and comprehending- what he did when he executed the papers in question and is merely the finding of a fact; but assuming that the entire facts found were findings upon questions of mixed law and fact, this Court would not be justified in reversing the decree and dismissing the bill. While it is the better practice, no doubt, to report all the facts upon which an ultimate finding is based, it is not. legal error to omit to do- so, even though the finding be a conclusion, resulting from mixed questions of law and fact. Winship v. Waterman, 56 Vt. 181-185.

This holding entitles the orators to a decree, without considering the question of whether the other facts found show incapacity or fraud and undue influence or both; but in view of the fact, that the defendánts claim they do not, and that they are the only foundation upon which the master’s ultimate finding of incapacity and undue influence rests, a claim, we think, not supported by the report, we have thought best to consider the case in that view.

It would contribute nothing to the law of the case to enter into an exhaustive analysis and logical arrangement of the reported facts. It is sufficient to call attention to enough of these-facts to illustrate the reasons of our conclusions and the application of the law'to this and similar cases.

No clear and definite rule can be laid down, defining mental incapacity and undue influence, which will apply in all cases and upon which the court can rely as a foundation for granting or refusing the prayer of a bill to set aside a conveyance alleged to-have been made under such influence. Each case, therefore, must, to a certain extent, rest upon its own peculiar circumstances. Some of the principles which enter into all such questions have been settled by adjudication, and among those principles which have been settled in this State, is that which requires the méntal incapacity of him on whose account the contract is sought to be set aside, on the sole ground of mental incapacity, to be such as leaves him without understanding to know the consequence of his own act. Morse v. Slason, 13 Vt. 296; Day v. Seeley, 17 Vt. 542; Willard v. Dow, 54 Vt. 188; Stewart v. Flint, 59 Vt. 144, and cases cited in the opinion; Greer v. Greer, 9 Grattan, 330; Newhouse v. Goodwin, 17 Barbour 236; Brown v. Torrey, 24 Barbour 583; Van Alst v. Hunter, 5 Johns. Ch. 148; Stuart v. Lispenard, 26 Wend. 255;. Stone v. Damon, 12 Mass. 488; Farman v. Brooks, 9 Pick. 212. It is equally well settled, that a hard bargain or inadequate consideration, standing alone, does not furnish sufficient ground, under ordinary circumstances, for interference by the court of chancery. Mann v. Betterly, 21 Vt. 326; White & Tudor’s Leading Cases in Eq., Hare & Wallace’s Notes, Vol. III, p. 136; but inadequacy of consideration, coupled with such, a degree of mental weakness as would justify the inference that an advantage had been taken of that weakness, will furnish sufficient ground for equitable interference. Mann v. Betterly, supra. The rule is well stated in White & Tudor’s Leading-Cases in Equity, Vol. III, p. 136, wherein it is said: “A chancellor will not, therefore, interfere .under ordinary circumstances, on the ground of mental weakness or of inadequacy of consideration, so long as either stand alone; and there is no-reason for supposing that one has led to, or resulted in the other. When, however,, both these elements are present, the-case changes its aspect, and there will be ground for an inference that the inadequacy is due to the exercise of undue influence, or that undue advantage has been taken of the weakness, and equity will set the whole transaction aside, unless this presumption is rebutted.” After citing authorities, the author proceeds to say:. “Hence, while proof that the powers of one of the parties to a contract were changed or enfeebled, may be nothing in itself,” citing authorities, among which is Mann v. Betterly, supra, “it will be everything when the bargain is one that no man, in the full possession of his faculties, would have made, and that no man should have made with another who had lost the power of taking care of himself.” To' this statement of law he cites a large number of cases, among which are again cited Mann v. Betterly, supra, and Conant v. Jackson, 16 Vt. 333. He also states the rule on p. 122 of the same volume, to be as follows: “In the absence of any special relation between the parties, where a party gains a great advantage over another, by a voluntary instrument, the burden of proof is undoubtedly thrown upon the person receiving the benefit, and he is under the necessity of showing that the transaction is fair and honest.” To this proposition of law the author again cites a long list of authorities.

These rules, however, are somewhat modified in case of a gift or advantageous contract to a wife, and while the authorities are not harmonious in this regard, the weight of authority seems to support this modification. White & Tudor’s Leading Cases in Equity, Yol. Ill, p. 144. The modification simply consists in requiring the party setting up incompetency and undue influence, to prove it, notwithstanding that the contract was for the benefit of the wife and rested upon an inadequate consideration, if the case was otherwise free from suspicion, the presumption being that it was an advancement to the wife.

Now, applying these general and elementary rules of law to the facts reported by the master, can we say that there are no reported facts supporting the master’s finding of incapacity and undue influence ?

To begin with, the master has reported that at the time the contracts were made, the orators’ intestate was an old man seventy-four years of age, afflicted with Bright’s disease, who had received a severe shock about eight months before the papers in question were made, rendering him partially blind, weak in will power and intellectual grasp, who was childish, forgetful, wholly incompetent rationally to consider, weigh and determine what was for or against his interest, and who was wholly incompetent to transact business affairs requiring the exercise of a sound and disposing mind, and who usually had an attendant when he went outside the house, and, at the time the papers were made, was surrounded by the relatives of the wife and the persons to be benefited by the contract, who advised concerning and composed the terms of the contract, with none of his relatives present, conveying away over thirteen thousand dollars of his property without any consideration whatever or any valid reason shown why he made the contract, leaving him' destitute of all property, except three notes of one thousand dollars each against the defendant Osgood, which he afterwards gave to said Osgood, so that at the time of his death, Nov. x, 1893, his estate inventoried only $371.40, being insufficient to pay his outstanding debts, costs of administration and funeral expenses. As we look into the contracts made at that time, which constitute a part of the report, we can hardly find a paragraph made in the interest of John M. The power of attorney from John M. and Lucy J. to Lee K. gives him full and unlimited power to sell and dispose of that property as he sees fit and for such sum as he may fix, and the proceeds thereof receive to himself, taking from him ■ no security, notwithstanding that he then owed John M. and Lucy J. more than three thousand dollars of unsecured indebtedness.

We might proceed farther in the statement of additional facts found by the master; but enough has been already enumerated to justify him in finding his ultimate facts of incapacity and undue influence as applied to the well settled principles of law.

The holding of this Court in Mann v. Betterly, 21 Vt. 326, supra, is a far stronger holding than is required to be made in the case at bar. There the mental capacity was stated to be “of weak understanding and capacity for the transaction of business; that in point of intellect he was not upon an equality with mankind in general.” The Court says in reference to this, that such imbecility alone is not sufficient; but “when coupled with gross inequality in the contract, may be sufficient to justify the inference of fraud and imposition”; and then goes on to consider whether there was gross inadequacy of consideration, not finding it, the bill is dismissed; but the case clearly shows that if the court had found that fact, it would have sustained the bill.

In the case at bar, the mental capacity is found to be much lower than in the case cited and the contract is without any consideration whatever. This in itself, without alluding to the many other facts found indicating undue advantage, under the rule laid down in Mann v. Betterly, supra, is sufficient to sustain the bill, in view of the fact that nothing appears in the report to rebut the presumption of incapacity and undue influence combined. The deeds and contracts themselves, showing that John M. gained nothing by them and lost everything, with the surrounding circumstances, called for clear reasons for making them; but no facts are found by the master why they were made, except the incapacity and undue influence. These conclusions are not affected by the fact that the deed was to the wife, for that fact only affects the question of upon whom the burden of proof lies, the presumption, in case of a wife, being that it was made as an advancement. White & Tudor’s Leading Cases in Eq., Vol. III, p. 144; but in this case, that pre■sumption is rebutted by the facts found, from which it clearly appears that the conveyance was made for the purpose of divesting the heirs of John M. of all chance to inherit any of his property, and to place it in the wife so^ it would ultimately pass to her heirs.

Decree affirmed so far as the same relates to real cmd personal property now in the possession of the defendants or either of them, or to which they or either of them are entitled, embraced or described in said contract, deeds and power of attorney, and claimed by said defendants by, through or on account ■of the same; cmd so far as the same relates to an accounting by the said defendants and the surrender to the orators of all sums of money that may have been collected by said defendants or cither of them, or that have come into their hands or possession, belonging to the estate of said John M. and sa far as relates to the surrender to the orators of ail kinds of property that cmne into the possession of the said Osgood, Barrett and Dana under and by virtue of said deeds, contract and power of attorney and which they have not disposed of to bona fide purchasers zvithout notice; and so far as the same relates to the contract betzveen said Osgood and said Moore remaining unexecuted at the time the bill in this cause zms brought; and so far as the same relates to the injunction; but the same is reversed so far as it relates to real and personal property conveyed by the said Osgood, Dana, Barrett and Moore to bona fide purchasers zmthout notice; and the came is remanded with mandate to the court of chancery to refer the same to a master to take an account of the property, zvhether real, personal or mixed, zvhich has come to the hands and possession of the defendants or either of them from the estate of the said John M. Allen, by virtue of a claim of right resting upon said contract, deeds and pozver of attorney, and also to take an account of all money which said defendants or either of them have received from the sale of any and all such property or which they or either of them may have received on account thereof, and to report to said court of chancery the location and value of said property and the amount of money, if any, which they or either of them have received from the sale of any of said property, whether sold by themselves or by their agent, and, if it shall be found that sales have been made and money received therefor, to report to whom and fpr how much the sale was made and whether to a bona fide purchaser with notice or otherwise, cmd when said report is made and returned to said court of chancery, such decree is to be entered thereon, in addition to the decree already rendered and affirmed herein, as the facts reported warrant.