Charon v. Windingland , 72 N.D. 70 ( 1942 )

On June 10, 1938, the plaintiff sold to the defendant upon a written contract a quarter section of land in Walsh County, North Dakota. This is an action in equity by which the vendor seeks to have the contract canceled. He alleges that the contract is inequitable, unjust, and unconscionable, that the vendor at the time of the sale was and ever since has been of feeble mind, weak understanding, of no business capacity and was not able to understand the nature and effect of the contract that he signed. He further alleges that the vendee knew of his mental incapacity and with the intent to take advantage thereof and with the intent to defraud the vendor, induced him to enter into the contract, which he executed by mistake and without knowledge of its effect.

The vendee admits the execution of the contract and denies all other allegations of the complaint. The trial court dismissed the action.

The contract provides that upon full performance of its terms and conditions the vendor will convey to the vendee the real estate therein described. The purchase price is $2,100 with no interest on deferred payments and is to be paid as follows: "The sum of $300.00 on or before the execution of this contract, the receipt whereof is hereby acknowledged. The balance to be paid as follows: All of the wheat harvested on said premises each and every year over and above seven (7) bu. per acre; the party of the second part retaining 7 bu. per acre of said wheat crop, and delivering all the wheat above 7 bu. per acre to the party of the first part, each and every year, at the stipulated price of One Dollar ($1.00) per bu., until the full amount of the purchase price is paid."

The contract requires the grain to be delivered in the elevator or on cars at Edinburg, North Dakota, or some point not more remote. The vendee agrees to pay all taxes beginning with the year 1939 and further agrees to plant not less than 50 acres of wheat each year.

Both the vendor and vendee are farmers living in the same neighborhood. The vendor was about thirty-six years old when the contract was made. He is of limited education, having quit school during the fifth grade. The vendee was about twenty-four years old and went through the seventh grade in school. Both were unmarried. The vendor lived near the land in question with his mother on what was known as the "home quarter," which his mother owned. His brother, Thomas Charon, lived about one-half mile away and frequently visited the vendor and his mother. Within a year prior to selling the land to the vendee, the vendor had been offered $2,100 cash for the land by another neighbor. The vendor blames the failure to consummate that transaction upon the interference of his brother, Tom. About two weeks prior to the execution of the contract the vendor offered to sell the land to the vendee for $2,100 cash. He was unable to raise the cash and thereupon offered to buy the land upon the terms contained in the contract. The discussion of the transaction took place at the vendor's home. The mother participated. The brother, Tom, was not advised of the pending sale. After some preliminary discussion, the vendor, his mother, and the vendee went to Edinburg where they procured the services of one Ordahl in drawing the contract. Ordahl had been a business man in Edinburg for many years. The vendee did most of the talking. Ordahl says that he wrote down what was recited to him and incorporated the terms into the contract. He then gave each party a copy of the contract. They asked him to read it, which he did, from beginning to end. Concerning the mental capacity of the vendor, he testified, "Yes, I knew he wasn't exactly so very bright." Upon being further questioned as to whether he regarded the vendor as incompetent to handle his own affairs, Ordahl said, "No, I don't think he was that bad." With regard to the vendor's mother, Ordahl was asked, "Did you look upon her as a shrewd business woman?" To which he replied, "Yes, quite competent." He further testified that as far as he could judge the parties fully understood the contract when they signed it.

The vendor had received the land in question as a gift from his father some years before. He farmed it most of the time himself. One year he rented it to his brother, Tom. There were about 125 acres of tillable land on the quarter section. There were also considerable quack grass on it. Testimony as to the average production of wheat per acre in that vicinity varies from 8 bu. to 12 bu. per acre. The cash payment of $300 was paid at the time of the execution of the contract. This money was used by the vendor in paying past-due taxes on the land of mother and son.

The vendor was not strong physically. He had had many illnesses including pneumonia and typhoid fever, as well as the usual children's diseases. It is apparent from the record that the vendor was not as keen mentally as the average person. His mother was about seventy-one years old. Her memory has failed somewhat, but otherwise she seems to have been regarded as a competent and able business woman. The negotiations which resulted in the contract were had in the presence of and participated in by the mother. She also accompanied the parties to the office of the scrivener who drew the contract. She and her son read the contract after they returned home. This occurred on June 10, 1938. No objection was made to the contract until the following October, when the vendor told the vendee that he thought $1 per bushel was too much for the wheat and stated that he wanted to cancel the contract.

The contract was regarded by Mr. Ordahl, who drew it, as "rather one-sided." This opinion seems to have resulted from the provision in the contract for credit thereon for wheat raised in excess of seven bushels per acre to be delivered to the vendor at the price of $1 per bushel. While the contract may be said to favor the vendee, it was not regarded by the trial court, nor do we regard it as unconscionable. The vendor and his mother had been trying to sell the land for some time. It had not proved profitable when operated by the son and they both testified that they needed money to pay debts, which the mother had incurred, and delinquent taxes.

Contracts of weak-minded persons when shown to have been induced by fraud will be set aside by courts of equity. Story states the general rule to be "that the acts and contracts of persons who are of weak understandings, and who are thereby liable to imposition, will be held void in courts of equity if the nature of the act or contract justify the conclusion that the party has not exercised a deliberate judgment, but that he has been imposed upon, circumvented, or overcome by cunning, or artifice, or undue influence." Story's Equity Jurisprudence, 14th ed, § 337.

In an equitable action to set aside a deed on account of mental incapacity of the grantor, this court has said that "before the court will set aside a conveyance on the ground of mental incompetency of the grantor it is necessary to show that the grantor, at the time of the execution of the instrument, was so weak mentally as not to be able to comprehend and understand the nature and effect of the transaction involved." Nordby v. Sagen,64 N.D. 376, 252 N.W. 383. See also Meyer v. Russell, 55 N.D. 546, 214 N.W. 857; Meyer v. Schmidt, 135 Neb. 850, 284 N.W. 337.

While a contract for the sale of land may not be considered an instrument of equal rank to a deed executed with the formalities prescribed by law, it is of sufficient dignity to require fraud in its execution to be clearly established before the contract will be overthrown. Schinzer v. Wyman, 27 N.D. 489, 146 N.W. 898. Weakness of intellect does not always deprive a party of the capacity to make such a contract. Contracts will not be declared void merely because the parties thereto are not on the same mental plane. The courts cannot measure the differences of business sagacity of parties who may buy and sell land. The law presumes that men are honest in their dealings and charge of actual fraud must be supported by proof of facts or circumstances that indicate deceitful practice or unfair dealing.

The vendor, while not as keen mentally as the vendee, had a reasonable capacity to transact business. The trial court, who heard the testimony and observed the vendor on the witness stand, incorporated in its findings of fact, this statement: "He was a farmer and worked and farmed both his own land and that of his mother. He had been farming for many years and carried on his business and making necessary purchases, as required, and attended to buying and selling grain and complied with the AAA Government allotment and apparently in ever(y) way carried on his farming business the same as other farmers in the vicinity and while he had but little schooling or education he was, in my opinion, No Man's Fool, and was perfectly capable of transacting his ordinary business and entering into contracts and had sufficient intelligence to know the consequence of any such contracts. He was not an incompetent and, in my opinion, was not feeble-minded."

While this case is here for trial de novo we may not wholly disregard the findings of the trial court. Doyle v. Doyle, 52 N.D. 380, 202 N.W. 860. This court said: "On a trial de novo the findings of the trial court are not clothed with the same presumptions in their favor as in other cases. But, on the other hand, in such a case as this, we must take into consideration the fact that we have here but a cold and lifeless record. We are called upon to determine the mental capacity, the state of mind, the knowledge and intent of Ellen Doyle at the time she executed and delivered the deed. We have not the advantage of seeing her, of noting her demeanor, of hearing her voice; of the innumerable intangible indicia that are so valuable to a trial judge in determining questions of this character. The trial court had the advantage of all of these things and, breathing the air of the trial, he was in an immeasurably better position to find the real facts in the case. Therefore, notwithstanding that the case is here for trial de novo, we must give some appreciable weight to the determination of the trial court."

There is clearly no actual fraud disclosed by the record. It does not appear that the vendee coerced the vendor in any manner into making the contract. After the vendor had attempted to sell his land to another neighbor and the transaction had failed of consummation, the vendor was still looking for somebody to buy the farm from him. He and the vendee met while putting out a fire in a near-by hay meadow. They got to talking about the sale of the farm. It does not appear who brought up the subject first. Shortly thereafter the vendee went to the vendor's home. The mother was present. They all agreed that the price should be $2,100. The vendee said he would try to get the money with which to pay the purchase price. Some days later he stated that he could not get the money to pay cash. No agreement as to other terms was made at that time. Several more days elapsed; the vendor then went to the place where the vendee lived. He was not at home. His brother said that he would send the vendee down to see the vendor the next morning. This was about two weeks after the first conversation between the parties regarding the land. The next morning the vendee came to the vendor's place and again said that he could not get the money. These facts all clearly appear from the testimony of the vendor. It also appears that the mother, her son, and the vendee went to Edinburg the same day where the contract was drawn and signed in the office of the witness, Ordahl. The vendor insists that he understood that the contract was to provide for payment in cash, however, he also says that after the contract was drawn up and before he signed it that he and the vendee had an argument about whether a dollar was a fair price for the wheat.

The mother remembers little of the conversations that led up to the execution of the contract, but she remembers that the vendee came to her house at least twice to talk about buying the land and that she went with the parties to Mr. Ordahl's office and was present when the contract was signed and $300 cash paid by the vendee. The vendee testified that there was no discussion of the price of wheat in Edinburg, but that at the vendor's home the parties to the contract and the vendor's mother discussed the price and it was agreed upon at $1.

From this testimony it appears that the vendor wanted to sell his farm. This desire was shared by his mother. One deal for a sale had failed of consummation. The vendee agreed to pay $2,100 for the land if he could get the money. He tried but was unable to get it. The parties then entered into the contract that is now sought to be canceled. Apparently the mother participated in all negotiations. There is no evidence of any persuasion on the part of the vendee. The transaction seems to have been wholly voluntary on the part of everyone connected with it.

The allegations of the complaint with respect to fraud are meager and in fact, amounts to little more than legal conclusions. Nevertheless, we have treated them as sufficient, as did the trial court. Intermingled with the allegations of fraud is the further statement "said contract was executed by plaintiff by mistake and without knowledge of its effect." No attempt is made to set forth the facts or law concerning which the vendor claims to have been mistaken. The record discloses no evidence of mistake of such a nature that would entitle the vendor to cancel the contract. If there was a mistake it was not due to the vendor's failure to understand the contract, but was a mistake of judgment uninduced by any misrepresentation on the part of the vendee. No fiduciary or confidential relationship existed between the parties. They were dealing with each other as strangers. The contract was not entered into hurriedly. It may have been more favorable to the vendee than to the vendor, but the consideration to be received by the vendor cannot be said to be unreasonably inadequate. The vendor has not shown himself to be so weak mentally as not to be able to comprehend the nature and effect of the transaction.

The vendor alleges that it was error for the court to sustain objections to questions propounded to witnesses concerning his ability and mental capacity to understand the terms of the contract in question or its nature and effect, and cites 20 Am Jur 717, Evidence, as an authority for the rule that nonexpert opinions may be given in cases involving questions of mental capacity to contract. The fault is not with the rule but with the application sought to be made. The questions deal not with the general mental capacity of the vendor, but seek the opinions of the witnesses as to his capacity to enter into the specific contract before the court. The questions invited answers that would invade the province of the court and call for legal conclusions. The point is well illustrated by the following statement from Atwood v. Atwood, 84 Conn. 169, 79 A. 59, 37 LRA(NS) 591.

"Two witnesses were permitted to testify, over the defendant's objection, that during the period of her illness Mrs. Atwood was not capable of doing business or making any contract or agreement. We think this evidence, under the circumstances of this case, was admissible as an opinion as to her general mental condition and the degree of her mental incapacity. If a question of this character called for a legal conclusion as to the capacity of one to make a particular will or a deed or a contract, it would be objectionable."

The vendor is also aggrieved because the trial court admitted in evidence a contract containing provisions similar to the one in question and executed by strangers to this lawsuit. We agree that the evidence thus admitted is irrelevant. This being a trial de novo, we have disregarded it. We, nevertheless, reach the same conclusions as did the trial court. The decision of the District Court must be affirmed.

BURKE, NUESSLE, and CHRISTIANSON, JJ., concur.