Slorby v. Johnson

530 N.W.2d 307, 1995 N.D. LEXIS 48, 1995 WL 109627
CourtNorth Dakota Supreme Court
DecidedMarch 16, 1995
DocketCiv. 940139
StatusPublished
Cited by6 cases

This text of 530 N.W.2d 307 (Slorby v. Johnson) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Slorby v. Johnson, 530 N.W.2d 307, 1995 N.D. LEXIS 48, 1995 WL 109627 (N.D. 1995).

Opinion

*308 NEUMANN, Justice.

Peter A. and Karen J. Johnson appeal from a judgment rescinding a contract for deed, which conveyed 640 acres of farmland from Melvin Steffens to the Johnsons, on the ground of Steffens’ mental incapacity at the time the contract for deed was executed. We affirm.

We view the evidence in the light most favorable to the trial court’s findings. See Chaussee v. Thiel, 520 N.W.2d 789, 791 (N.D.1994). Steffens was born on July 25, 1898. His wife died in 1962. The couple had no children, and Steffens’ only living relatives are a sister, two sisters-in-law, and five nephews, with whom Steffens has maintained contact throughout the years. Steffens was a farmer who owned four quarter sections of land south of Berthold in Ward County.

Steffens had a long friendship with the Willard Sr. and Myrtle Johnson family, which included their sons, Peter, Willard Jr., and David Johnson. When Steffens retired from farming at age 77, he began leasing the four quarter sections to Willard Sr., and to David and Willard Jr.

Although Steffens did not remarry, he maintained a long and close relationship with Myrtle Olson. Beginning in the early to mid 1980s, Steffens lived with Olson in a house in Minot. During winters when Olson resided with her daughter in North Carolina, Stef-fens would live in Willard Johnson Sr.’s home in rural Berthold. Ray Johnson, Willard Sr.’s brother and another close friend of Stef-fens’, also resided there during the winter months.

Peter Johnson has known Steffens since Peter was six or seven years old. During the mid to late 1960s, Peter helped Steffens farm the land for four years. Peter then left the farm to pursue other interests. Peter and his wife, Karen, lived in Burlington until 1983, and then moved to Crosby, where they lived until 1987. During this period, Peter’s contacts with Steffens were limited to occasional visits at the Willard Johnson Sr. home and one or two visits with Steffens while he resided in Minot with Olson.

In 1987, Peter, Karen, and their children moved into an old house located on Steffens’ property. Steffens and Willard Johnson Jr., the tenant at that time, agreed to allow Peter and the family to five there. While Peter did not pay rent to Steffens for living in the house, he and Karen made repairs and did other work to make the home habitable.

As Steffens grew older, he was frequently confused with regard to his business affairs. Steffens had a short attention span, had difficulty recognizing people who should have been known to him, suffered from memory lapses, was hard of hearing, and had impaired vision. He also had difficulty physically taking care of himself. During this time, Myrtle Olson and the residents of the Willard Johnson Sr. household were very protective of Steffens. Steffens relied on others to assist him in his business transactions. He would not attempt to read any documents presented for his signature, but would sign them when asked to do so by members of the Johnson family. Steffens trusted the Johnsons and relied on the representations they made to him regarding the content or effect of documents. Except for brief intervals, the members of the Willard Johnson Sr. household did not leave Steffens unattended.

In May 1990, Steffens was distraught. Ray Johnson died on May 5, 1990, and his companion, Myrtle Olson, who was visiting her daughter, was in the hospital in serious condition. Ms. Olson died on May 9, 1990.

On May 7, 1990, between the deaths of Ray Johnson and Myrtle Olson, Peter and Karen Johnson obtained Steffens’ signature on a contract for deed conveying his land to Peter and Karen for $64,000. At that time the land had a value of $240,000. The contract for deed was prepared by Peter. It provided for no down payment, granted Peter and Karen three-fourths of the mineral interests, and provided for interest three percent less than the rate generally available at that time.

According to Peter, Steffens believed the land was worth $64,000, which is what he paid for it in 1964. None of the members of the Willard Sr. household were present when Peter negotiated the contract for deed with Steffens. When Steffens signed the contract *309 for deed, he was alone with Peter, while Karen and the children were in another room. Steffens’ signature was neither witnessed by, nor acknowledged to, the notary public who later notarized the contract for deed at Peter’s request.

Peter and Karen did not give a copy of the contract for deed to Steffens and did not disclose its terms to the rest of the family. The other members of the Johnson family were not aware of Peter’s efforts to purchase the property. Peter informed them some time after the transaction and demanded cash rent from Willard Jr. for farming the property. Steffens, although aware he had sold his property, believed he had sold it to Willard Jr., who had been farming the land. Peter and Karen built a new home on the property and began occupying it in January 1991.

In May 1991, Willard Jr. was appointed conservator for Steffens'and brought this action against Peter and Karen to rescind the contract for deed. While serving as Stef-fens’ attorney-in-fact and conservator, Willard Jr. diverted between $80,000 and $90,-000 from Steffens’ bank accounts. Willard Jr. disposed of all conservatorship records and the whereabouts of the money is unknown. Willard Jr. was removed as conservator in April 1993 and Robert J. Slorby was then appointed as successor conservator for Steffens and was substituted as the plaintiff in this rescission action. 1

After a bench trial, the trial court rescinded the contract for deed, finding:

“[0]n May 7, 1990, Melvin Steffens was a person of unsound mind and suffered a mental deficiency caused by advanced age or other cause or causes. This condition was such that Mr. Steffens lacked sufficient understanding and capacity to make responsible decisions regarding his property. Melvin Steffens was not able to enter into a Contract for Deed concerning the property since his mind and memory were of a condition which rendered him incompetent to judge his rights and interests in relation to the transaction.”

Peter and Karen have appealed.

Rescission of a contract on the ground of mental incapacity is authorized by N.D.C.C. § 14-01-02. See Thronson v. Blough, 38 N.D. 574, 166 N.W. 132, 133 (1917) (construing predecessor statutes). The statute provides:

“A conveyance or other contract of a person of unsound mind, but not entirely without understanding, made before his incapacity has been determined judicially upon application for the appointment of a guardian is subject to rescission as provided by the laws of this state.”

The standard for determining incapacity under the statute has been developed through a long line of authority in this jurisdiction. This court has noted that old age alone does not render a person incompetent, even though the mind may be weak and impaired compared with what it had been, and even though the capacity to transact general business may be lacking. Lee v. Lee, 70 N.D. 79, 292 N.W. 124, 126 (1940).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Peterka v. Janda
2025 ND 38 (North Dakota Supreme Court, 2025)
Vig v. Swenson
2017 ND 285 (North Dakota Supreme Court, 2017)
Erickson v. Olsen
2014 ND 66 (North Dakota Supreme Court, 2014)
Matter of Estate of Nelson
553 N.W.2d 771 (North Dakota Supreme Court, 1996)
Richter v. Jacobson
North Dakota Supreme Court, 1996

Cite This Page — Counsel Stack

Bluebook (online)
530 N.W.2d 307, 1995 N.D. LEXIS 48, 1995 WL 109627, Counsel Stack Legal Research, https://law.counselstack.com/opinion/slorby-v-johnson-nd-1995.