Derdyn v. Low

• Decision Date: 30 October 1923
• Docket Number: Case Number: 14223
• Citation: 94 Okla. 41,220 P. 945,1923 OK 870
• Parties: DERDYN et ux. v. LOW et al.
• Court: Oklahoma Supreme Court

1923 OK 870

220 P. 945

94 Okla. 41

DERDYN et ux. v. LOW et al.

Case Number: 14223

Supreme Court of Oklahoma

Decided: October 30, 1923

Syllabus

¶0 1. Fraud--"Confidential Relation.

" A confidential relation arises by reason of kinship between the parties, or professional, business, or social relations that would reasonably lead an ordinarily prudent person in the management of his business affairs to repose that degree of confidence in the defendant which largely results in the substitution of the will of the defendant for that of the plaintiff in the material matters involved in the transaction.

2. Cancellation of Instruments--Undue Influence--Proof.

If the plaintiff relies on undue influence as flowing from a confidential relation for the cancellation of a conveyance, the plaintiff must show by sufficient proof that the confidence reposed in the defendant lulled the plaintiff into a sense of security in dealing with the defendant concerning the particular transaction.

3. Same--Duty of One in Confidential Relation.

If the confidential relation between the parties as to the particular transaction operates largely to cause the substitution of the defendant's will for that of the plaintiff, as to the material matters involved in the sale and conveyance, it then becomes the duty of the defendant to exercise that degree of care in relation to the rights and interests of the plaintiff in the transaction which an ordinarily prudent person would use in the care of his own property rights and business interests.

4. Same--Abuse of Confidence.

If the confidential relation as defined is present between the parties in the transaction, the failure of the defendant to discharge his legal duty owing to the plaintiff will operate to cancel the conveyance between the parties.

5. Same--Burden of Proof.

The plaintiff must prove by clear and satisfactory evidence the existence and presence of the confidential relation in the transaction, and the violation of the duties owing by the defendant to the plaintiff.

6. Action--Right of Action--Requisites.

In the absence of a contract or legal requirement to perform a service for another, the failure to so do cannot become the basis of a legal action against another. The right of legal action against another rests upon the breach of a legal duty, resulting in damages to the plaintiff.

7. Fraud--Misrepresentations.

Statements or misrepresentations between the parties having equal knowledge about the subject-matter will not constitute actionable fraud.

8. Same--Opinions as to Value.

Misrepresentations of value of property between the parties equally situated in the premises become and are mere opinions of the speaker. Opinions as to value cannot become the basis of an action between the parties unless coupled with unlawful acts which are calculated to and would mislead a reasonably prudent person in the management of his business affairs.

9. Appeal and Error -- Review of Equity Case --Disposition.

In cases of purely equitable cognizance it is within the power of this court to consider the entire record and weigh the evidence, and if the judgment of the trial court is clearly against the weight of the evidence, to render or cause to be rendered such judgment as the trial court ought to have awarded in the first instance.

10. Same--Cancellation of Instruments--Refusal.

We have carefully examined the record, and find that the plaintiff has not brought himself by sufficient proof within the rule for judgment against the defendants.

11. Same.

Record examined, and held to support the judgment of the trial court.

H. G. Butts, O. P. Thompson, and C. D. Bennett, for plaintiffs in error.

Blanton, Osborne & Curtis and Stuart, Sharp & Cruce, for defendants in error.

STEPHENSON, C.

¶1 Heretofore and on March 31, 1922, the plaintiffs commenced their action against E. W. Low et al. for the cancellation of certain royalty deeds given on the lands of plaintiffs by the latter to the defendants. The plaintiffs alleged fraud upon the part of E. W. Low and T. G. Mays, in procuring the plaintiffs to execute and deliver the option and deeds of conveyances. The substance of plaintiffs' proof in support of the allegations of fraud is that Hector Derdyn is a native Belgian and came to this country with his wife in 1908, and has not sufficient understanding of the English language to render him capable of dealing at arms length with other men in business transactions. The proof shows that the plaintiffs first settled in Illinois, and in 1911 came to Pauls Valley for the purpose of purchasing government lands then being offered for sale in Garvin county. The plaintiffs purchased two or three tracts of land and handled the transactions through the First National Bank, in which E. W. Low was cashier, and T. G. Mays was president. The plaintiffs continued to live in Illinois until the year 1917, and during this period of time purchased several other tracts of land situated in Garvin county, and handled the matters largely through the bank in which defendants are officers. The plaintiffs allege that the business relations had between the plaintiffs and defendants created what is known in law as a confidential relationship. The record shows that the plaintiff by letter gave the defendants written instructions in relation to the disposition of his business matters. The plaintiff ofttimes went into minute details advising the defendants the exact sums of money owing to various parties in connection with the transactions. The instructions were carried out by the defendants in relation to the business matters intrusted to the defendants by the plaintiff. The plaintiff frequently prepared or caused to be prepared the legal instruments relating to his business transactions and transmitted them with letter to the defendants, directing them in the manner of closing the transactions. The plaintiff with his wife and family moved to Garvin county in 1917, and has continued to live on his holdings at all times since that date. The plaintiff acquired about 2,400 acres of land in Garvin county, and borrowed considerable of the purchase price through the First National Bank, and further sums for other business operations, and improvement of the lands purchased by him. It is alleged and sought to be proven by the plaintiff that defendant Low advised him as to the advisability of purchasing two or three of the tracts. This is denied by the defendant. The plaintiffs owed the First National Bank various sums of money from time to time until the indebtedness totaled about $ 15,000. The plaintiff further alleged and undertook to prove that the defendants assured him when he came to Garvin county that they would loan him such sums of money as were needed by him in the operation of his business affairs. Later the plaintiff procured a loan on his land holdings and from the proceeds paid the indebtedness owing to the bank, except about $ 1,500. The plaintiff testified that the defendants advised him at the time of procuring the farm loan that they would loan him such sums of money as he might need in his business operations. Some of the commission notes and interest on the principal indebtedness would become due about the 1st of February, 1920. Prior to this time a well was being drilled for oil and gas, some few miles distant from the plaintiff's holdings. The evidence shows that the plaintiff had sold oil and gas leases on virtually all of his holdings, and so far as the records show was as familiar with the oil and gas possibilities in that section as any other person. The development was in what was known as wild cat territory and no production had been previously brought in. The plaintiff went to the First National Bank about January 15, 1920, to make inquiry about borrowing money to meet the interest and commission notes that would become due about February 1st, and also to make arrangements for the payment of taxes. The defendants did not refuse to make the proposed loan. In the course of the conversation Mays offered to purchase options for the sale of an undivided one-half interest in the royalty right in four 320-acre tracts of land, and to pay $ 750 for a conveyance of an undivided one-half interest in the royalty rights in each of the tracts. The plaintiff testified that he did not want to execute options and deeds of conveyances for the consideration named, but after considerable discussion of the matter and persistence on the part of the defendants, the plaintiff testified that he agreed to return again in the afternoon and follow up the negotiations. The plaintiff returned in the afternoon for further discussion of the sale and it was finally agreed between the parties that the plaintiff would give the options for $ 750 a tract. The following day the options were executed between the parties on January 16, 1920. The plaintiff further testified that on January 19th, the well that was being drilled showed evidence of gas production, but the records do not disclose that any of the defendants possessed knowledge that it would likely produce gas at the time of the execution of the option contracts. Later, and on February 6th, the plaintiff, pursuant to the option agreement, executed a deed of conveyance for an undivided one-half interest in the royalty rights in one of the tracts for which he received $ 750. At the direction of the plaintiff the deed provided that the plaintiff should receive the entire of all renewal payments, and that if either or any of the leases lapsed, the plaintiff was to receive the entire bonus for any new leases, and further provided that the assignment should not interfere with the plaintiff making any new leases in the event of the lapse of the present leases. Later followed the execution of other royalty deeds in controversy. Subsequently a well drilled on either side of the holdings proved to be a dry hole; the defendants testified that they were then unable to get an offer of any sum for...