Duncan v. Hensley

• Decision Date: 15 June 1970
• Docket Number: No. 5--5217,5--5217
• Citation: 248 Ark. 1083,455 S.W.2d 113
• Parties: Graddy S. DUNCAN and Margarett Lucille Duncan, his wife, Appellants, v. Joyce HENSLEY, Appellee.
• Court: Arkansas Supreme Court

Page 113

455 S.W.2d 113

248 Ark. 1083

Graddy S. DUNCAN and Margarett Lucille Duncan, his wife, Appellants, v. Joyce HENSLEY, Appellee.

No. 5--5217.

Supreme Court of Arkansas.

June 15, 1970.

Thomas Ledbetter, Harrison, for appellants.

Moore & Logan, Harrison, for appellee.

EUGENE A. MATTHEWS, Special Chief Justice.

This appeal is from the decree of the Newton County Chancery Court cancelling a deed to Appellant Graddy S. Duncan, conveying 440 acres of real property situated in Newton County, Arkansas, and a bill of sale conveying to him certain personal property, both executed and delivered to this Appellant by Appellee on February 4, 1969. The complaint of the Appellee, Joyce Hensley, filed in the Newton Chancery Court on May 28, 1969 alleged that said instruments were executed as a result of threats of great bodily harm and injury to the plaintiff, and were without consideration, and prayed that the same be cancelled.

Appellee and Appellant Graddy S. Duncan (who will hereinafter be referred to as Appellant) were married September 16, 1964 at Kingsville, Georgia, while both were apparently residents of the State of Florida, and at a time when Appellee was conducting negotiations for the purchase of certain real estate known as the Long J Ranch in Covington, Louisiana. Thereafter the purchase was consummated, title being taken in the name of both Appellee and Appellant. The parties operated a ranching operation on these lands for approximately three years. The Louisiana lands were then sold for Seventy-nine Thousand ($79,000.00) Dollars, and a portion of the proceeds of the sale were used in purchasing the Newton County lands sometime during the latter part of 1967, in the purchase of a house trailer in which they lived upon the Newton County lands, and the Appellant and Appellee began a ranching operation upon such lands.

On June 26, 1968, the Appellee and Appellant entered into a property settlement agreement, in contemplation of divorce, under the terms of which Appellee was to receive the 440-acre farm located in Newton County, Arkansas, together with the household furniture located in Newton County, Arkansas, cattle and horses upon the Newton County farm and a 1968 Volkswagen automobile. The agreement recited that a 1961 Volkswagen registered in the name of Appellant would be transferred to Larry B. Hensley and further recited that any other automobiles, trucks or equipment registered in the name of the husband should be his sole and exclusive property. On the same date, Appellant executed a quitclaim deed to Appellee covering the Newton County lands.

Thereafter, on August 1, 1968, Appellee was granted a decree of divorce from the Appellant in which decree it was recited that the property settlement agreement filed therein should be approved and incorporated as a part of such decree. On February 4, 1969, Appellee, Joyce Hensley, executed and delivered to the Appellant a quitclaim deed conveying to him the Newton County lands and a bill of sale covering certain cattle, quarter horses, farm machinery, implements and tools situated on the Newton County lands and the house trailer, also situated thereon. The deed recited a consideration of Ten ($10.00) Dollars and other valuable consideration paid, and the bill of sale a consideration of Ten ($10.00) Dollars and other legal considerations paid. Both instruments were recorded on February 4, 1969.

On May 28, 1969, Appellee filed her suit to cancel these instruments and the decree from which this appeal comes was entered on September 4, 1969.

Appellants rely upon the following points for reversal:

I.

The Chancellor erred by allowing, over timely objection, testimony and evidence to be presented not related to issues contained in the pleadings, and further erred by allowing testimony and evidence to be presented going to issues, including relative assets of the parties, pre-dating August 1, 1968, when the divorce decree was entered.

II.

The Chancellor erred in finding clear and convincing evidence sufficient to decree cancellation of the instruments involved herein on grounds of physical duress.

Point I. On the day set for trial of this case and after the parties had announced ready the Appellants, in response to an inquiry of the Court as to preliminary matters made the following motion:

'Yes, Your Honor, the original petition in the matter describes the two instruments that are involved in the case and we would like to have a ruling of the Court in advance; it is our feeling that the petitioners will attempt to introduce evidence that will not be germane to the questions of grounds for rescission of these two documents, and we would like to have the ruling of the Court to limit their scope of evidence.'

In response to this motion the Court stated:

'We will pass on any objections that you have at the time any testimony is offered, and I will not try to anticipate anything that is going to be offered for purposes of clarification.'

This ruling was correct upon the grounds stated by the Court. Thereafter the trial Court permitted evidence to be introduced going to the financial condition of the parties and the relationships existing between them prior to the divorce decree of August 1, 1968. Appellants argue that in response to their motion this testimony should have been excluded on the ground that the Court had lost jurisdiction over the subject matter and persons of the Appellee and the Appellant in the divorce action between them because the term in which such divorce decree was entered on August 1, 1968 had expired. They further argue that the Court erred in permitting testimony to be introduced related to facts and occurrences prior to February 4, 1969 under the doctrine of res judicata.

Neither of these arguments has merit. This litigation has nothing, whatever, to do with the divorce decree of August 1, 1968 except as the relationships between the parties prior to and at the time of such decree threw light upon the state of mind in which Appellee found herself on February 4, 1969 at the time of the execution of the instruments here in question. The issues in this action are not those embraced in the divorce action terminating in the August 1, 1968 decree and the doctrine of res judicata is not applicable in this case. Nor did the Court err in treating the pleadings in this cause as amended to conform to the proof, over the objection of Appellants. In the case of Bonds v. Littrell, 247 Ark. 577, 446 S.W.2d 672, this Court held that when the trial court permits the introduction of evidence in the face of an objection that the point at issue was not raised by the pleadings, the effect of its ruling is to treat the pleadings as amended to conform to the proof. In so doing the Chancellor did not abuse his discretion.

Point II. Appellee was required to prove her case by clear, cogent and convincing testimony. Bryan v. Thomas, 226 Ark. 646, 292 S.W.2d 552. In the case of Hildebrand v. Graves, 169 Ark. 210, 275 S.W. 524, this Court held that fraud may be proved by circumstantial evidence or by a combination of direct and circumstantial evidence. In the case of Brimson v. Pearrow, 218 Ark. 27, 234 S.W.2d 214, this Court approved the following statement from the earlier case of Hightower v. Nuber, 26 Ark. 604, 611:

"And in a court of equity, where bad faith and unconscionable acts can have no allowance or favor, the strength of mental capacity of the parties, the circumstances surrounding them, their relationship, etc., make up the grounds upon which the court can find the real influences that produced the conveyance. And when it is discovered that the party in whose favor the conveyance was made possessed an undue advantage over the grantor, and in person, or by agent, exercised an improper influence over such one, and to the advantage of the grantee, it is an act against conscience and within the cognizance of a court of equity."

We have no hesitancy in applying this same rule to this case where duress is alleged.

In Burr v. Burton, 18 Ark. 214, at page 233, this Court said:

'A contract made by a party, under compulsion, is void; because consent is of the essence of a contract, and where there is compulsion, there is no consent, for this must be voluntary. Such a contract is void for another reason. It is founded in wrong or fraud. It is not, however, all compulsion which has this effect; it must amount to duress. But this duress may be either actual violence, or threat. 1 Parsons on Cont. 319.

'The bill alleges, that Philip P. Burton threatened complainant, and the apprehension of personal violence was one of the inducements to the execution of the notes.

'Duress, by threats, says Mr. Parsons (Id. 320), exists not where-ever a party has entered into a contract under the influence of a threat, but only where such a threat excites a fear of some grievous wrong, as of death, or great bodily injury, or unlawful imprisonment.'

In National Life & Accident Insurance Co. v. Blanton, 192 Ark. 1165, 97 S.W.2d 77, the rule in the Burton case was re-affirmed and was somewhat enlarged in the case of Perkins Oil Company of Delaware v. Fitzgerald, 197 Ark. 14, 121 S.W.2d 877, where it is said:

'To the same effect were numerous cases cited and discussed, all of which we have examined and determined that they arrive at, or reach the same uniform conclusions as those wherein such contracts were fairly and openly entered into without fraud, mistake, deception or any form of duress. They were ordinarily held to be good. But in those cases in which these contracts were induced by some form of fraud, by over-reaching, by deceptive promises, relied upon, or by some form of duress, sufficient under all the prevailing facts and circumstances to impair the deliberate judgment to the extent that it might be determined that although the contract had been signed, it had not been agreed to, such contracts have uniformly been held voidable at the instance of the...