Clough v. Adams

• Decision Date: 03 March 1887
• Citation: 32 N.W. 10,71 Iowa 17
• Parties: CLOUGH v. ADAMS.
• Court: Iowa Supreme Court

71 Iowa 17

32 N.W. 10

CLOUGH

v.ADAMS.

Supreme Court of Iowa.

March 3, 1887.

Appeal from district court, Clinton county.

Action for the rescission of a conveyance of real estate, on the alleged ground that it was obtained by fraud and undue influence, and for a grossly inadequate consideration. The district court entered judgment for plaintiff, and defendant appealed.Robert T. T. Spence, P. J. Clawson, and W. C. Grohe, for appellant.

Ellis & McCoy, C. W. Chase, and A. T. Wheeler, for appellee.

REED, J.

The property in question consists of two lots in the city of Lyons, on which is situated a two-story brick dwelling-house. Plaintiff conveyed the property to defendant in consideration of the assignment by him to her husband of the right to manufacture and sell a “patent spring bed-bottom” in certain counties in Illinois. At the time of the transaction, the real estate was worth about $2,500. It was incumbered with a mortgage which amounted to about $1,000, and defendant took it subject to that mortgage. The trade was effected by an agent in defendant's employ, one Garland, who was also assisted to some extent in the transaction by one Charles Upham. Plaintiff had owned the real estate for some years, and she and her family occupied it as a place of residence. The debt secured by the mortgage on the premises was about to fall due, and neither she nor her husband had the means with which to pay it, and they had for some time been offering the place for sale. Upham resided in Lyons, and he knew that plaintiff desired to sell the place. Defendant and Garland resided at Monroe, Wisconsin. Defendant owned an interest in the “Silver patent spring bed-bottom,” and Garland was employed by him to sell the right to manufacture and sell the article in the territory owned by him. The latter had been engaged exclusively in the business of buying and selling “patent-rights” for about three years, and, prior to that, had dealt to some extent in property of that character. The right owned by defendant did not sell readily for money, and the parties appear to have adopted the plan of trading it for property. It appears also that they preferred to trade for property which was incumbered, and to take it subject to the incumbrances. This preference is to be accounted for, we suppose, by the fact that one who is under financial embarrassment, and whose property is in that situation, is naturally not so careful to insist upon a full equivalent for the right therein which he parts with, as a person who is under no embarrassment would be. A day or two before the transaction in question Garland went to Lyons for the purpose of disposing of territory, if he should be able to do so. He learned from Upham that plaintiff and her husband desired to dispose of their property, and they went together to see them, with the object of working up a trade with them, if they found them inclined to trade. A negotiation was entered into, which, in a very short time, resulted in the trade in question.

Plaintiff alleged in her original petition that she was induced to enter into the transaction, and to part with her property, by certain false and fraudulent representations, made by Garland and Upham, as to the value of the right they proposed to trade her. Also that they obtained an undue influence over her, and by their importunities and persuasions overcame her will, and induced her to make said trade. Also that the right assigned to her husband was valueless, and constituted no adequate consideration for the conveyance of her property. After the evidence had all been introduced in the district court, and while the cause was being argued by counsel, plaintiff asked and obtained leave to file an amendment to her petition, in which it was alleged that both she and her husband are of weak intellect, and were wanting in capacity to engage in important business transactions, and that, at the time of the transaction in question, they were in financial distress. Defendant moved to strike the amendment from the files, because it was filed out of time, and it introduced a new issue or cause of action, and the allegations contained in it were immaterial. This motion being overruled, defendant elected to stand on that ruling, and did not answer the amendment; and the overruling of the motion is one of the matters complained of on this appeal.

We are of the opinion that the motion was properly overruled. The amendment did not materially change the issue. No new cause of action or ground of relief was pleaded in it. As stated above, the ground upon which plaintiff sought a rescission of the conveyance was that it was obtained by fraud and undue influence, and that the consideration paid for it was grossly inadequate. The matters pleaded in the amendment were material to the case as made by the original petition and answer. The fact that plaintiff and her husband were of weak understanding, standing alone, would afford no ground for rescission, there being no claim that they were non compos. But when considered in connection with the other circumstances of the transaction, it may be of the highest importance in determining whether the parties are entitled...