Parrish v. Peoples

9 N.W.2d 225, 214 Minn. 589, 1943 Minn. LEXIS 642

• Court: Supreme Court of Minnesota
• Decided: April 2, 1943
• Docket: No. 33,392.
• Status: Published

Opinions

¹ Reported in 9 N.W.2d 225. This is an action by the guardian of Alice M. Parrish to cancel a deed executed by her prior to the adjudication of her incompetency. In the court below findings were made for defendants. Plaintiff moved for amended findings or a new trial, and appeals from the order denying the motion.

On December 3, 1941, Mrs. Parrish, by warranty deed, conveyed to defendants, husband and wife, as joint tenants, certain real property for a consideration of $800. This conveyance contained approximately eight acres and was a portion of the farm on which Mrs. Parrish lived and which she and her husband, Carl Parrish, had owned as joint tenants prior to his death on November 22, 1940. The purchase price was represented by a cash down payment of $240, and the balance was evidenced by an unsecured promissory note.

The negotiations which finally led up to the sale of this property were begun in November 1941. A contract was executed by Mrs. Parrish whereby she listed her property for sale exclusively with Mr. Peoples at a price of $1,000, less a commission of $100 to him. Peoples was then and had been for some time in the real estate and contracting business. Then followed numerous conferences and discussions regarding the sale of the property. Apparently Mrs. Parrish was eager to dispose of the property. Peoples communicated with certain prospective purchasers whom he thought might buy but was unsuccessful in making a sale. It was then proposed that Peoples himself purchase it. To this he agreed, for a consideration of $800. Mrs. Parrish engaged one Berscheid to make a survey. He went to the Parrish farm for this purpose, and after Mrs. Parrish's son designated the property to be sold he prepared a plat thereof. The most southerly line of the property, as reflected by the plat, was not straight, and at Peoples' request the surveyor revised the plat, straightened the south boundary, and by doing so included some additional land not in the original survey. Mrs. Parrish, however, signed the plat as revised, and the conveyance was thereafter executed accordingly.

On March 6, 1942, upon the petition of Mrs. Parrish, the probate court of Hennepin county adjudged Mrs. Parrish an incompetent, and a guardian was appointed in her behalf.

This action to cancel the deed in question was begun shortly thereafter.

Plaintiff's assignments of error involve the consideration of four issues, namely:

(1) That defendants falsely and fraudulently made certain representations as to the value and quantity of the property conveyed.

(2) That the consideration for the deed was insufficient.

(3) That defendants exerted undue influence over plaintiff in the execution of the deed.

(4) That plaintiff was incompetent at the time of the transaction to manage her own business affairs.

1. Plaintiff has not properly pleaded fraud. In pleading fraud, the material facts constituting the fraud must be specifically alleged. A general charge of fraud is unavailing. Plaintiff's charge of fraud is general and therein fails to meet this requirement of pleading. 3 Dunnell, Dig. Supp. § 3836, and cases cited. Nor was fraud proved. Fraud is not presumed but must be affirmatively proved. One who alleges fraud has the burden of proof and carries this burden throughout the trial. The evidence reasonably supports the court's finding that there was no fraud. Id. § 3837.

2. Although there was great disparity in the testimony on value and strong support in the evidence that the land conveyed was worth considerably more than the price for which it was sold, we believe that on the record before us the issue of sufficiency of consideration was properly a fact question for the lower court to determine. Having been decided adversely to plaintiff, we cannot disturb the finding on review unless such finding is palpably contrary to the evidence. 1 Dunnell, Dig. Supp. § 411.

3. Plaintiff likewise had the burden of proving undue influence in connection with the execution of the deed. The court found that there was no undue influence exerted, and the evidence supports this finding. 6 Dunnell, Dig. Supp. § 9950.

4. In considering the contention of plaintiff that the evidence does not reasonably support the finding of competency, we are at the outset confronted with the rule that on appeal the testimony must be considered in the light most favorable to the prevailing party. Giving defendants the benefit of this rule, we must determine whether the court's finding that Mrs. Parrish was competent at the time of the execution of the deed is reasonably supported by the testimony. The evidence reveals that she was 47 years of age, the mother of 14 children, and that prior to the death of her husband had transacted little, if any, business. She had been confined to a life of simple domesticity and depended exclusively upon her husband to make decisions in business matters. Shortly after his death in 1940, she sold four or five acres of her farm land, contiguous to the property now in litigation, for a consideration of $1,700. The defendants, less than a year later, purchased nearly eight acres of comparable property from her for $800. The two realty experts, testifying for defendants, placed a maximum value of $900 and $1,000, respectively, on the property. One expert, however, admitted that no stakes or iron monuments were pointed out to him when he viewed the property for appraisal purposes. His testimony was very vague as to the location of the property lines, and he admitted that he relied entirely upon information given to him by defendant William F. Peoples as to what piece of property it was. In behalf of plaintiff, the Orono township assessor testified that the assessed valuation of the property for tax purposes was $1,800. Sam W. Batson, a real estate dealer in Hennepin county for 20 years, placed its value at $2,500. Kenneth Bollum, cashier of the State Bank of Long Lake since 1914, placed the value at $400 to $500 an acre. Although the evidence on value was a fact question on the issue of sufficiency of consideration, which, having been determined adversely to appellant, cannot be disturbed on review, it is proper to be considered here insofar as it bears upon the question of Mrs. Parrish's competency to execute the deed complained of.

The only opinion evidence on the issue of competency is that of Kenneth Bollum. Because of his long acquaintance with Mrs. Parrish and her family, he was well qualified to state his opinion from personal knowledge regarding her competency to transact business. His assertion was positive that she was incompetent to take care of her own affairs. This testimony is not controverted, either directly or by inference from other facts and circumstances. In fact, considering her own testimony and the evidence as a whole, there is a strong supporting inference of incompetency. It is true, Bollum stated on cross-examination that the reason for his opinion was the fact that money passed through her hands too freely. This reason may not of itself be an adequate basis for establishing incompetency, yet it was a layman's manner of expressing himself on the issue. More accurately expressive, we believe, is his statement with reference to inquiries made by Mrs. Parrish while at the bank as to whether or not she should purchase certain stock for her farm. He stated that these were not "intelligent, purposeful inquiries." While the cross-examination of Bollum indicated that the basis for his opinion was not as satisfactory as it should be, the fact is that he, a credible witness, a banker of many years' experience and long-time resident in the community, gave positive and unrefuted testimony that in his opinion Mrs. Parrish was incompetent to transact business. We do not believe the trial court was at liberty to disregard this testimony. When interrogated by the court regarding this transaction, Mrs. Parrish was unresponsive and her replies vague and rambling. She obviously failed to grasp the import of the court's questions relating to the boundary lines of the property sold and appeared to attach no importance to the fact that she did not know the location of the south line thereof. Emphasized through repetition was her one remark that she thought she was selling three acres only. We believe this interrogation tended to corroborate rather than impeach the opinion of witness Bollum as to competency.

Mrs. Parrish was paid $240 in cash, from which was deducted the expense of the survey and abstracting. The balance of the purchase price was evidenced by an unsecured promissory note in the sum of $560, payable in installments at the rate of $20 per month, executed by defendant William F. Peoples only. The deed, however, conveyed the property to defendants, husband and wife, as joint tenants. The note contained a provision that in the event it was fully paid by May 1, 1944, interest thereon would be waived. Significant, too, is the fact that Peoples himself testified that as an inducement to him to purchase the property Mrs. Parrish agreed to waive all interest on the note if paid by May or June 1942. Under the express provisions of the note, the principal would have been completely paid on May 1, 1944, the due date for the last installment payment. To sign such a note so charitably waiving the interest is a strong indication of failure on Mrs. Parrish's part to understand the nature of a common business transaction.

Another disquieting factor is the evidence regarding the straightening of the south line of the survey. When the surveyor came out to the farm one of the Parrish boys took him over to the property and pointed out the land to be surveyed. He then made a plat of the property and prepared a legal description. This he turned over to Peoples, calling his attention to the fact that the most southerly line was not straight. Peoples then requested the surveyor to straighten the line, the effect of which was to include therein additional property not in the original survey. The surveyor testified that he had no conversation with Mrs. Parrish regarding the line but acted at Peoples' request. He straightened the line, and the plat, as revised, was presented to Mrs. Parrish for her signature. She wrote this statement beneath the plat: "This is the land that Mrs. Alice Parrish is selling to F. Peoples." She testified that she had no information about straightening the south line and was unaware of it when she signed the plat. It was Peoples himself who ordered the surveyor to make the revision, and admitted is the fact that there was no consideration for adding the extra piece of property included therein by the surveyor's revision of the south line. Though it be assumed, arguendo, that Mrs. Parrish understood the effect of signing the revised plat, the fact that she again became a benefactor by conveying, without consideration, this additional piece of property throws considerable doubt upon her competency to conduct ordinary business affairs.

We are not unmindful that this court has held that mere mental weakness does not incapacitate a person from contracting. It is sufficient if he has enough capacity to understand to a reasonable extent the nature and effect of what he is doing. 2 Dunnell, Dig. Supp. § 1731; Rogers v. Central L. I. Co. 149 Minn. 347, 183 N.W. 961, and other cases there cited. We are of the opinion that the evidence herein disclosed is such as to create considerable doubt as to whether Mrs. Parrish had such capacity.

A court of equity guards with jealous care all contracts or transactions with persons of unsound mind. 3 Dunnell, Dig. Supp. § 4522; Lundberg v. Davidson, 72 Minn. 49, 74 N.W. 1018. In Schultz v. Oldenburg, 202 Minn. 237, 245, 277 N.W. 918, 922, this court said:

"From what has been said in prior cases it is clear that what the law aims to do is to protect the property and estate of one who is in fact incapable of doing so for himself. But his incapacity cannot be changed from a shield of protection to a rapier of offense."

The question of whether a person is incompetent by reason of mental disability so as to require the appointment of a guardian of his estate is not subject to demonstrable proof, but his mental disability is in the final analysis a matter of opinion, which must be based upon his conduct, actions, and statements in connection with surrounding circumstances and conditions. Annotation, 113 A.L.R. 354; Schultz v. Oldenburg, supra. In Keiser v. Keiser,113 Neb. 645, 651, 204 N.W. 394, 396, the court defines competency as follows:

"The descriptive words, 'mentally incompetent,' 'incompetent,' and 'incapable,' as used in sections 1589, 1590, Comp. St. 1922, mean any one who, though not insane, is, by reason of old age, disease, weakness of mind, or from any other cause or causes, unable or incapable, unassisted, of properly taking care of himself or managing his property, and by reason thereof would be liable to be deceived or imposed upon by artful or designing persons. Mental incompetency or incapacity is established when there is found to exist an essential privation of reasoning faculties, or when a person is incapable of understanding and acting with discretion in the ordinary affairs of life. Where a person has insufficient mental capacity for the just protection of his property and his mental condition is such that he is guided by the will of others instead of his own in its disposition, a guardian should be appointed."

The Nebraska court in the Keiser case approved the rule laid down in Leatherman v. Leatherman, 82 W. Va. 748, 97 S.E. 294, to the effect that the test of mental capacity applied in suits for appointment of guardians should also be applied in those to avoid deeds and wills. In the Leatherman case the court said (82 W. Va. 750, 97 S.E. 295):

"In determining whether or not a person is of such unsound mind as would entitle a court to take from him the right of personal freedom and the right to manage and dispose of his own property, we know of no other test than the one which has often been applied by this court and courts of other jurisdictions in suits to avoid wills and deeds on the ground of alleged incompetency of the testator or grantor. The authorities do not undertake to prescribe the degree of mental acumen necessary to enable a person to make a deed or a will. But they all seem to agree that, if grantor or testator knows and understands the nature and effect of his act, he has sufficient capacity to enable him to dispose of his property."

Applying the foregoing test to the facts in the instant case, though the evidence is not as satisfactory as it should be, there is such a doubt in our minds as to the competency of plaintiff that we feel a new trial should be granted on this issue in the interests of justice. While it is true that a new trial should not be granted if the findings are reasonably supported by the evidence, it is also true that findings contrary to uncontradicted and not inherently improbable testimony cannot be sustained. Gustafson v. N.W. Reed Fibre Co. 180 Minn. 338, 230 N.W. 795. A new trial may be granted in the interests of justice and where there is a likely probability of stronger evidence on another trial. 5 Dunnell, Dig. Supp. §§ 7142 and 7143; Emerson v. Hennessy, 47 Minn. 461,50 N.W. 603; Farmers State Bank v. Merchants Mfrs. State Bank, 164 Minn. 300, 204 N.W. 965; Greengard v. Burton,88 Minn. 252, 92 N.W. 931; Hallen v. Montgomery Ward Co. Inc.203 Minn. 349, 281 N.W. 291.

Considering the length of time Mrs. Parrish has lived in the community, it should not be difficult to procure ample testimony on the issue of competency for the guidance of the trier of fact. It may well be that another trial will produce the same result on this issue. If so, we will be assured of the fact that the question was determined upon proper evidence and that this woman of questionable competency will have received the protection which the law adequately should provide for her.

There is a defect in the title to the action. Plaintiff should have been designated, "Alice M. Parrish, by John D. Nelson, her legal guardian." 3 Dunnell, Dig. §§ 4453 and 4332; Richardson v. Kotek, 123 Minn. 360, 143 N.W. 973; Johnson v. Colp, 211 Minn. 245, 300 N.W. 791. We have amended the title to conform with this rule.

The order of the lower court denying plaintiff's motion for a new trial is reversed with directions that a new trial be granted only on the issue of competency.