Cole v. Getzinger

71 N.W. 75, 96 Wis. 559, 1897 Wisc. LEXIS 272

• Court: Wisconsin Supreme Court
• Decided: June 24, 1897
• Status: Published

Opinion

The following opinion was filed April 30, 1897:

Pinney, J.

1. The facts, as disclosed by the evidence, have been stated so fully that but little comment is necessary. The deed of conveyance from Ira S. B. Cole to Alice Farmer of his farm of about seventy-five acres was procured from him presumptively by fraud and iindue influence, practiced by the defendants Cassius M. Moody, Betsey C. Moody, his wife, and Roberts. The consideration for the deed was largely inadequate. The lands, found by the court worth $65 per acre, were sold for $40 per acre, and the si^m of $4,200, paid for the farm within a few days thereafter, was received by these parties, $2,500 by Moody and his wife, and $1,200 by Roberts; and all that remained for Cole, the defrauded party, for his farm, was $500, further reduced to about $420 by the payment of the claim made ori the part of Roberts, not shown to have had in fact any meritorious foundation; .and finally it is left to inference that he ever received this small sum, for there is no evidence that it ever actually came to his hands. The evidence clearly shows that the parties named were actually in complicity to secure to themselves, .as they did, nearly all the proceeds of the old gentleman’s farm, the only property he had. lie was a man burdened with the infirmities of his great age of eighty-eight years, and weak and feeble, both in mind and body. The decided preponderance of proof tends to show that, left to his own resources and methods, he was not competent to properly and safely conduct and conclude a business transaction of the character of the one under consideration. He had lived with - his son-in-law and his daughter, the Moodys, for the-period of about sixteen years. His condition, and the relations between the parties, gave rise to mutual trust and confidence, and they owed him the duty to guard his interests, and protect him against the intrigues and wiles of designing, persons. Their relations and duty to him, in his dependent and feeble condition, were of a trust or fiduciary character. In respect to the making of this conveyance, their selfish interests were thus brought in direct conflict with their duty. It was greatly unjust to his four other children, who had claims on his bounty. None of his relatives or friends, save those who were to profit by.it, or those acting for them, had any notice of the transaction, and some caution seems to-have been exercised to prevent its being known. As was said in Watkins v. Brant, 46 Wis. 425: “ This secrecy, if not a badge of fraud, is surely a badge of undue influence.”' The matter of the conveyance originated with Bolerts, apparently, who started to buy the farm for Getzinger, and proposed to go and see Cole about buying it. He had known Cole all his life, and knew his great age, and evidently understood his situation and condition and his relations with the Moodys/ and an understanding was arrived at in regard to it, and with the result as stated.

It is a well-established principle in courts of equity that a conveyance will be set aside wherever it has been obtained through undue influence over a person greatly under the power of anothei-, if there is inadequacy of price, or clear ground of inference that the confidence reposed has been abused, or advantage been taken of incompetency or weakness of understanding, or clouded or enfeebled faculties; and many authorities to this effect are cited in Earl of Chesterfield v. Janssen, 1 White & T. Lead. Cas. Eq. pt. 2, 826, 827. “If deeds are obtained,” said Marshall, C. J., in Harding v. Handy, 11 Wheat. 104, 125, “ by the exercise of undue influence over a man whose mind has ceased to be the safe .guide of his actions, it is against conscience for him who has obtained them to derive any advantage from them. It is the peculiar province of a court of conscience to set them aside. 'That a court of equity will interpose in such a case is among Its best-settled principles.”

The general principle is that where, from the nature of the transaction and the situation and relation of the parties, fraud and imposition may be presumed, unless their presumption be rebutted, relief will be granted in equity, although fraud in fact be not proved, and equitable jurisdiction may be exercised in such cases in respect to the instrument unduly obtained, when a court of law could not enter into the question. Jackson v. King, 4 Cow. 207-220; Hall v. Perkins, 3 Wend. 626-631;. Taylor v. Taylor, 8 How. 183; Wheeler v. Smith, 9 How. 55, 82. And many cases to this effect are cited in the brief of plaintiffs’ counsel.

The rule is strongly and clearly laid down in Davis v. Dean, 66 Wis. 100, 110,— a case quite similar in principle, where it was said: “We do not say that fraud and undue influence were proved affirmatively, but only that the circumstances suggest them. If the burden of proof is upon the plaintiffs to show such fraud or undue influence, probably we could not disturb the findings of the circuit court, which negative their existence. But, under the circumstances of this case, the burden of proof is not upon the plaintiffs. Because the relations of the parties to each other were those of trust and confidence, and because of the suspicious circumstances under which the conveyances were made and the injustice which .would be inflicted upon the heirs of the grantor if the conveyances are held valid, the law casts upon the grantee the burden of showing that the conveyances are untainted with undue influence or other fraud, but were the intelligent and deliberate act of the grantor. This rule is to protect the -weak and unsuspicious from the cunning and fraud of those who stand in confidential relations to them-,, and has its foundation in good morals and sound policy. The-grantee has failed to satisfy the requirements of the rule; and the presumption of injustice, fraud, and wrong stand against the conveyances, which he must remove before the court is authorized to say that they are valid.” Allore v. Jewell, 94 U. S. 506; Cowee v. Cornell, 75 N. Y. 91; Smith v. Cuddy, 96 Mich. 562; Turner v. Collins, 7 Ch. App. 329; Gandy v. Macauley, 31 Ch. Div. 1.

The conveyance of the farm to Alice Farmer was to serve the uses and purposes of Moody and wife and Roberts, the latter attempting to and in fact profiting by the trust and' confidence the grantor had in Moody and his wife. Alice Farmer was in no sense a purchaser of the farm. Her relation to the transaction was a passive one. It was not intended that it should be gainful, and there is nothing to show that she was privy to any improper design.

So far from rebutting the presumption of fraud and undue-influence, the evidence of the defendants Moody and wife- and Roberts materially strengthens it. The case is destitute of any evidence showing that the old gentleman personally ever took any part in any negotiations for the sale of the property, or ever authorized any. Heither of these persons is willing to admit that he or she negotiated the alleged sale.. Mrs. Moody says she did not hear any one make any bargain with her father, and that Roberts never saw him about it. “ There wasn’t anybody that saw father.” Roberts wrote-him letters, which came in her husband’s name, and he and she wrote letters in reply. Moody says he did not conduct any negotiations for the sale of the property, and he agrees that Roberts did not see Cole; that “all the talk he had up there was with me, and that was all, except the letters he-wrote.” Roberts says he never had any conversation with the old gentleman Cole about the purchase. “ My only negotiations were with Mr. Moody. I went to the house at one time, but did not see Mr. Cole. Don’t think I asked for him.” So far as the evidence goes, the old gentleman seems to have been wholly ignored until the witness Hevitt called' on him to execute a deed of conveyance of his farm. It does not even appear that he knew to whom the conveyance was made, nor, up to that time, that he had uttered an articulate word to any one in respect to the sale of the farm, bfor is there any evidence that he read or knew the contents of any of the letters written by Roberts, or that he either wrote or directed any to be written in reply. If the letters contained the negotiations, or 'important parts thereof, why did Roberts take pains to get the entire correspondence in his hands when litigation ensued in respect to the farm, and why were they 200 miles awaj7 when the trial occurred, he having been served in due season with a subpoena duces tecum for their production? They might be of great service to the defendants, or they might contain damaging evidence against them. The failure to produce them as called for certainly justifies unfavorable inferences. The evidence of Mevitt. does not clear up the difficulty. He knew nothing about the negotiations or the bargain. It had already been made, according to his understanding, and he went there to put the-transaction in legal form, and his testimony does not show that the transaction was fair, and free from undue influence. It does not seem to have occurred to him to inquire what reason existed why the old gentleman should sell his farm for only about two thirds of its value, and then give away nearly all the money, securing no agreement for his own maintenance, and making no provision for any of his other four living children. Our conclusion is that the presumption against the validity of the deed has not been removed, and that it must be regarded as having been procured by fraud and undue influence.

2. The evidence does not show that Getzinger was a party to, or had notice, actual or constructive, of, the wrongful procurement of the deed to Alice Farmer. The only ground upon which it can be contended that he is affected by the fraud and undue influence intervening in the procurement of the deed is that Roberts had undertaken to act for him in making this particular purchase. Evidently Roberts did not intend to purchase the land as an investment, and, had Getzinger known that he had procured the title and controlled it for $3,000, when he was exacting of him $4,200 for it, he might well have claimed the benefit of the purchase at $3,000 and a fair commission. Roberts had no idea of giving him the bonus of $1,200, which he says he put in his own pocket. And if Roberts-was unfaithful to the duties of such agency, Getzinger would not be affected by constructive notice of what he did in procuring the title to be conveyed to Alice Farmer for the benefit of Moody and wife, and for his own great gain as well. Law v. Grant, 37 Wis. 548. The rule that the principal is affected with knowledge acquired by the agent in the transaction to which his agency relates is based upon the duty of the agent to disclose to his principal all knowledge and information he possessed at the time or acquired in relation to the subject matter of the agency, and the presumption is that he communicates it accordingly; but he cannot be expected to communicate information which, from his relation to the subject matter, he would not disclose; and where his relation to the previous transaction is such as would bo sufficient to induce him to. withhold the information the presumption of its communication is rebutted. Melms v. Pabst Brewing Co. 93 Wis. 154, 107-169, and cases cited. Roberts would not be likely to disclose that he was exacting for himself, of his principal, $1,200 more for the property than it was purchased for. In any viewT that may be taken of the case, we think that Getzinger must be regarded as a bona fide purchaser for value, and is entitled, as such, to hold the land.

3. The remedy remaining to the plaintiffs is, therefore, for damages or compensation, to be adjudged in money, for that of which they have been deprived, as heirs at law of their ancestor, by fraud and undue influence practiced on •such ancestor. The land was not converted by the voluntary and lawful consent of their ancestor into money, but still remained to him, in equity, in its character and quality of real estate; but the trust that otherwise would have attached to the land in his favor and in favor of the plaintiffs as his heirs at law, upon his death, was displaced by the further wrongful act of these parties, namely, the causing of the title to become vested in a bona fide purchaser for value, so that the only relief that can be given under these 'circumstances is to charge them with the value of the land, ■or interest therein, of which the}1' have been thus deprived, ■by way of compensation. It appears to be well settled that where a court of equity obtains jurisdiction for the purpose of granting some distinctively equitable relief such as the specific performance of a contract or the rescission or cancellation of some instrument, and it appears from facts disclosed at the hearing, but not known to the plaintiff when he brought, his suit, that the special relief prayed for has become impracticable, and the plaintiff is entitled to the only alternative relief possible,— of damages, — The court may, and generally will, instead of compelling the plaintiff to incur the double expense and trouble of an action at law, retain the cause, decide all the issues involved, and decree the payment of mere compensatory damages (1 Pomeroy, Eq. Jur. § 237); especially since, by the Code, the distinction between courts of law and courts of equity has been abolished. Hall v. Delaplaine, 5 Wis. 206, 213; Tenney v. State Bank, 20 Wis. 161, 163, 164; Hopkins v. Gilman, 22 Wis. 476, 480; Combs v. Scott, 76 Wis. 672; Van Rensselaer v. Van Rensselaer, 113 N. Y. 208.

One of the heirs — Charlotte Loses — having been made a defendant and answered admitting the complaint and claiming the same relief as the plaintiffs, may properly be regarded as practically a plaintiff and entitled to the same relief.

It follows, therefore, that the judgment of the circuit court dismissing the complaint should be reversed, with costs, except as to the defendant Getzinger, and as to him it should be affirmed, with costs; and the cause must be remanded to the circuit court with directions to enter judgment in favor of the plaintiffs and of Ohcvrlotte Losee, awarding to each one fifth of the value of said premises, with costs.

By the Oourt.— Judgment is ordered accordingly.

A motion for a rehearing was denied June 24, 1897.