Parrish v. Peoples , 214 Minn. 589 ( 1943 )

As a court of review, we are governed by certain well-established and time-honored rules. The one applicable here is that where an action is tried by the court without a jury its findings are entitled to the same weight as the verdict of a jury. We do not reverse unless the findings are contrary to the evidence. In many of our cases we have said that we do not reverse unless the findings are "manifestly and palpably" contrary to the evidence. This rule applies whether the appeal is from a judgment or from an order, and it is applicable whether the evidence is oral or documentary. 1 Dunnell, Dig. Supp. § 411, and cases under notes 12 and 13. This thought, so well expressed by Mr. Justice Jaggard in N.W. Fire Marine Ins. Co. v. Connecticut F. Ins. Co. 105 Minn. 483,487, 117 N.W. 825, 826, is worthy of quotation here:

"This court, a court for the correction of errors, is here called upon to apply these rules of law to the facts proven, with due reference to the usual presumption in favor of the trial court, not only in determining the disputed questions of fact, but in drawing reasonable inferences from undisputed facts."

The present case was tried by the court. The issues of fraud, inadequate consideration, undue influence, and mental incompetency were all decided adversely to plaintiff's contentions. With the conclusion reached by the majority as to the first three, we can and should readily agree, namely: (1) That plaintiff has not properly pleaded nor proved fraud; (2) that the consideration for the deed may not be disturbed, since the findings made find evidentiary support; and (3) that plaintiff's proof of any undue influence is insufficient to sustain any such finding.

It is the fourth subdivision of the majority opinion with which I cannot agree. In my discussion of the evidence reference will be made to the settled case by indicating in parentheses the letters S.C., followed by the page from which the quoted testimony is taken. Thus there will be the testimony as given rather than my own inferences drawn therefrom.

First to be considered is the testimony of banker Bollum, upon which the majority heavily relies. After testifying to the value of the involved property, he was asked about his acquaintance with Mrs. Parrish, which he estimated to be "about 20 or 25 years" (S.C. 33). Upon examination by Mr. Malmberg, counsel for plaintiff, he testified:

"Q. About how often would you say you have seen her in the bank in connection with business transactions?

"A. Well, not very many times. More often since her husband died.

"Q. How many times would you say since her husband died?

"A. Well, this spring [1942] she has been in quite a number of times, probably once a week.

"Q. For what purposes?

"A. She has had some checks, and some other business she has asked me about.

"Q. Was that conversation you had in connection with business transactions?

"A. Yes, most of it was.

"Q. And from your observation of her in in connection with these conversations have you an opinion as to her competency to transact business?

"A. Yes.

"Q. And what is that opinion?

[There was an objection of "no proper foundation laid," but it was overruled.]

"A. Well, I don't feel she is competent to take care of her own business."

On cross-examination he testified (S.C. 35):

"Q. Did she ever come in and make a request for a loan of money for the purpose of buying a cow or horse?

"A. Yes, she did.

"Q. And it was in connection with a request for money she came in and asked for advice in connection with buying a cow or horse, or some animal necessary for her farm?

"A. Yes.

"Q. All these inquiries were intelligent, purposeful inquiries, weren't they?

"A. Well, I don't know; I wouldn't say they were." (Italics supplied.) (The majority construes this to mean "that these were not 'intelligent, purposeful inquiries.' " I cannot so construe it, but let the record [S.C. 37] speak for itself.)

"Q. Why, then, do you say in your opinion she is not competent to transact business?

"A. Because I think when she gets a few dollars it passes through her hands very fast.

* * * * *

"Q. Anything else?

"A. Well, I don't think she understands the value of money for one thing; I told her that when she sold that property for that amount of money." (What the witness referred to was Mrs. Parrish's sale to defendants of the land involved in this litigation.)

What has been quoted is the sole basis upon which plaintiff relies to show lack of competency by direct testimony. Mr. Bollum spoke as a layman and based his opinion solely upon what he had observed in his business relations with Mrs. Parrish. Lack of ability to hang onto money is the test which to his mind was the controlling factor in reaching the conclusion that "I don't feel she is competent to take care of her own business." The majority say "this testimony is not controverted." How could it be, since, in the very nature of things, no one could "controvert" his own state of mind. That result necessarily followed, because "a witness not an expert must first disclose the facts upon which his opinion is based, before he can be allowed to express an opinion on mental capacity, and then can be allowed to state only his opinion formed from those facts." (Italics supplied.) In re Will of Pinney, 27 Minn. 280, 281, 6 N.W. 791, 792,7 N.W. 144.

Next, it is said that, while the lower court was justified in finding that there was no lack of adequate consideration, yet, since there was such wide discrepancy in the testimony on that issue, therefore this court should now consider the same as having a substantial bearing upon the mental capacity of Mrs. Parrish when she made this deal. Obviously, the question of value of the property was primarily for the trial court to determine. Its findings, the majority rightly concludes, are supported by the evidence. This being so, what right has this court again to rehash that issue? The trial judge had before him all the witnesses and the parties to the cause. He had the opportunity of observing them, of judging the weight to be given to their testimony, to observe their attitude and demeanor while testifying, to ascertain the interest or lack thereof each had in the outcome, whether he was a partisan or an advocate for either side, or whether he was fair and honestly stated the facts of which he had knowledge. These are opportunities and advantages denied to an appellate court. What we know is derived solely from the record. These are cogent reasons for the adoption of and adherence to the rule that the findings of the trial judge are entitled to the same weight as the verdict of a jury.

The testimony of Mrs. Parrish is interesting. It furnishes some light by means of which the trier of fact could well reach the conclusion that she was not a mental incompetent when this deal was made. She testified that Mr. Peoples came to her place and wanted to buy this property (S.C. 6, 7).

"Q. Did he say anything to you about the number of acres he wanted to buy?

* * * * *

"A. Why, he said he would like about three acres, or thatpiece. So then I went up there and we looked around, Kenneth and I did. And I says, 'Well, to the best of my knowledge I think there is about three acres in there.' Then he told me a bunch of colored people were going to go together and buy that piece. So then I said, 'All right.' And he said, 'I want to know how much you want for it.' And I told him I would like a thousand dollars for it. And he says that would be all right; they would all go together and buy it." (Italics supplied.)

Then follows some testimony with regard to the selection of a surveyor. Her counsel then proceeded as follows (S.C. 8, 9):

"Q. Before that, Mrs. Parrish, you said in the first conversation you asked a thousand dollars for it?

"A. Yes, I did.

"Q. Did he pay you a thousand dollars for it finally, or agree to pay you a thousand dollars for it?

"A. Well, he said he would pay a thousand dollars providing the rest went in with him; that would be the understanding, that it was to be more people in it.

"Q. How did you come to sell it for $800?

"A. Well, because Mr. Peoples came up and he said the rest of them had backed out and he couldn't afford to pay any more than $800 for it.

"Q. Did he tell you he would buy it himself?

"A. Yes, he said he was going to buy it himself. And I said, 'All right.' "

After the negotiations had come to finality, the parties met at the office of the Title Insurance Company in Minneapolis. As to what there happened, she testified (S.C. 21):

"Q. At the time the deal was closed, that is the time that this note was signed? [The note for $560 representing the balance of the purchase price.]

"A. It was.

"Q. And is it or is it not a fact that the man from the Title insurance Company who closed the deal pointed out to you that the balance was to be payable at the rate of $20 a month?

"A. Yes, he told me that at that time.

"Q. At that time?

"A. Yes.

"Q. And do you recall whether or not at that time the man from the Title Insurance Company pointed out to you that you were to receive no mortgage back?

"A. Yes.

"Q. That you were selling this property simply based upon a promissory note?

"A. Yes.

"Q. And you then signed the deed?

"A. Yes.

"Q. And the note was given to you?

"A. Yes.

"Q. Is that right?

"A. Yes.

"Q. And Kenneth was there with you at that time? [Kenneth is Mrs. Parrish's son, who was with her in the courtroom but did not testify.]

"A. Yes."

The testimony quoted was elicited on cross-examination. Her counsel then took the matter in hand, and the following appears (S.C. 25):

"Q. You were asked also if someone in the Title Insurance Company office pointed out to you that there was to be no mortgage, only a bare note. Do you know what a mortgage is?

"A. Well, I suppose that is if he doesn't pay for the property I can take it back."

The definition she gave of a mortgage does not to my mind indicate mental incompetency. That is about as good a definition as one might reasonably expect from the average lay person.

Mr. Peoples promptly paid the February and March installments on his note. Mrs. Parish accepted, endorsed, and cashed the checks he gave her. Nothing of difficulty appeared upon the horizon until the spring of 1942 (S.C. 11, 12), when one of her horses died. She went to Mr. Peoples and "asked him if I could get $100 because I had to buy a horse and some things to start the spring work with." He was unresponsive to her request, so she went to Mr. Bollum to see if she "could borrow some money on that note." But he, after looking the papers over, said, "You better take them papers in to your lawyer." She promptly acted upon his advice, and this suit was begun March 6, 1942, when, upon anex parte application, signed by her, the senior partner of the law firm of Nelson Malmgren was appointed guardian of her estate. The complaint in this suit was dated and filed with the clerk that day, and personal service of the summons was made on that date.

Unquestionably capable and experienced counsel knew that evidence to prove lack of "contractual capacity" must be secured if plaintiff were to succeed on that ground. Trial of the suit began May 25, 1942, so there was plenty of time for them to have procured "ample testimony on the issue of competency for the guidance of the trier of fact." Nor was the legal problem confronting them on this phase at all new or uncertain. They had but to turn to 2 Dunnell, Dig. Supp. § 1731, for their cases under the heading "Contractual capacity." There they would find our cases cited under note 92, among them Rogers v. Central L. I. Co. 149 Minn. 347, 351,183 N.W. 961, 963, where we reversed the finding below that plaintiff lacked mental capacity to enter into the contract involved there. That finding had for its support the testimony of two witnesses who said that plaintiff lacked "mental capacity sufficient to look after and to take care of his interest in a transaction of the kind" there presented. Judge Taylor, writing for the court, said (149 Minn. 352,183 N.W. 963):

"The rule to be applied in determining whether a contract may be avoided for lack of mental capacity to make it, as deduced from the prior decisions of this court, is stated in 2 Dunnell, Minn. Dig. § 1731, thus: 'Mere mental weakness does notincapacitate a person from contracting. It is sufficient if hehas enough mental capacity to understand, to a reasonableextent, the nature and effect of what he is doing.' This is the rule applied generally. 16 Am. Eng. Enc. (2d ed.) 624; 22 Cyc. 1206; 14 R.C.L. 590.

"The evidence is clearly insufficient to sustain a finding of incompetency within this rule, or to charge defendant's agent with any wrongdoing. Really the only basis for the claim of incompetency is the fact that plaintiff made an improvident contract for a man in his situation. But, as said by another court, the making of an improvident contract is not sufficient in itself to show lack of capacity to make contracts. If this were so, the number of incompetents would be legion." (Italics supplied.)

That case, which had been before this court before, is reported in 140 Minn. 295, 298, 168 N.W. 16, 17. There, Mr. Justice Bunn, in writing for a reversal of the verdict rendered in the court below, said this:

"Though it be true that plaintiff was not a man of average intelligence and that he had recently taken a cure for the liquor habit, it was still necessary for him to prove by a fair preponderance of the evidence that he was defrauded before he could secure a rescission of the transaction."

Other cases having a direct bearing upon this question are Morris v. G. N. Ry. Co. 67 Minn. 74, 69 N.W. 628, and Czyrson v. Roseau County Nat. Bank, 172 Minn. 420, 216 N.W. 224.

And in 1 Williston, Contracts (Rev. ed.) p. 747, § 254, the applicable rule is thus stated:

"According to the modern view actual mental assent is not material in the formation of contracts, the important thing being what each party is justified in believing from the actions and words of the man he is dealing with. Accordingly, if one dealing with a lunatic may reasonably suppose he is sane and makes a bargain with him on the assumption, there is no theoretical difficulty in the lack of mutual assent. Lunatics whose acts can deceive anybody are not so totally devoid of will that their words and acts can be compared to talking while asleep or signing a paper substituted by sleight of hand. It is necessary, however, for reasons of justice, that thelunatic should be privileged to avoid the contract if it is oppressive. As this is a personalprivilege it may well be limited to cases where otherwise therewould be hardship." (Italics supplied.)

In this case there was nothing oppressive in defendant Peoples' conduct, no fraud, no misunderstanding, no deceit. Adequacy of consideration is not wanting, even if that were a controlling element, which it is not.

Other helpful cases lending some aid to the mentioned rule and its application are, amongst others, McAllister v. Rowland,124 Minn. 27,144 N.W. 412, Ann. Cas. 1915B, 1006; Champ v. Brown, 197 Minn. 49, 266 N.W. 94; Schultz v. Oldenburg,202 Minn. 237, 277 N.W. 918. These cases and others have been cited and relied upon by this court in subsequent cases, our latest, Johnson v. Johnson, 214 Minn. 462, 8 N.W.2d 620. The logic of that opinion, so it seems to me, constitutes a complete barrier to plaintiff's cause here. While there the question was one of competence to enter into a marriage contract, whereas here it involves a small parcel of wet and marshy land, that does not furnish a sufficient distinction to justify upholding the marriage on the one hand and overturning this land deal on the other.

In view of the comments made as to the so-called excess acreage included in the conveyance, something further should be said. Mrs. Parrish was selling "that piece," which she "thought" contained about three acres. "That piece" was pointed out to Mr. Peoples by her boy Kenneth at her direction. She hired the surveyor, and again Kenneth's help came into play. When the survey had been completed and the plat drawn to scale, the south line as drawn thereon (S.C. 66) "don't run square,"i. e., it was not on a straight east-west line. Peoples went out to see Mrs. Parrish about it, explaining the defect and his desire to have it corrected. Mr. Peoples testified (S.C. 66) that she said: "Tell him [the surveyor] to square it up. I will call him." Thus the line was redrawn by the surveyor so as to "run square." This produced a small wedge-shaped parcel between the line as originally surveyed and the line as corrected. The number of square feet contained in the wedge has not been computed by anyone, nor do I think this important, because a mere glance at the plat leaves no one in doubt that the additional area is too inconsequential to be considered in this case. Important, too, is the testimony of Sam W. Batson, a witness for plaintiff, who testified that (S. C. 40) "a quarter of the land" is marshy and about "a half acre" is occupied as a road, all included in the grant. After the plat had been corrected, Mr. Peoples again went to see Mrs. Parrish, and then she signed the corrected plat as containing the area to be included in the conveyance. Mrs. Parrish testified (S.C. 96): "That is the one [plat] I seen, and that is the only one."

What is said about the $560 note creates no justification for doubting Mrs. Parrish's capacity to contract. There is no suggestion that the note is unenforceable or that its payments will not be met. Mr. Peoples is a long-time resident and businessman of Minneapolis. Her statement when the note was given, that (S.C. 72) "Mr. Peoples has got too much property to try to beat me," discloses a discerning and reasoning mind rather than that of a mental incompetent.

The order should be affirmed.