Farm Mtge. & Loan Co. v. Martin

• Decision Date: 09 July 1927
• Docket Number: 5516
• Citation: Farm Mtge. & Loan Co. v. Martin, 51 S.D. 424, 214 N.W. 816 (S.D. 1927)
• Court: South Dakota Supreme Court
• Parties: FARM MORTGAGE & LOAN COMPANY, Plaintiff and appellant, v. C. J. MARTIN et al, Executors of the Last Will and Testament of John P. Coffey, deceased, Defendants and respondents.

51 S.D. 424

214 N.W. 816

FARM MORTGAGE & LOAN COMPANY, Plaintiff and appellant,

v.

C. J. MARTIN et al, Executors of the Last Will and Testament of John P. Coffey, deceased, Defendants and respondents.South Dakota Supreme Court Appeal from Circuit Court, Deuel County, SD Hon. W. N. Skinner, Judge FileNo. 5516—Reversed Sherin & Sherin, Watertown, SD Attorneys for Appellant.Law, Dobie & Law, Clear Lake, SD Canfield & Michael, Luverne, Minn. Attorneys for Respondents.Opinion filed July 9, 1927

MISER, C.

Appellant brought this action to recover on three promissory notes given by one John P. Coffey and Mildred C. Coffey to the San Benito Land Company.The defendants are the executors under the will of John P. Coffey, deceased.Mildred C. Coffey is the widow of John P. Coffey and one of the executors under his will.Coffey and wife made a trip to San Benito, Tex., in February, 1922.They were members of an excursion party gotten up by the San Benito Land Company, which party was personally conducted by one Elsinger, one of its officers.After being at San Benito two days and one night, living in the land company’s car, during the course of which time they were taken by auto to see certain lands, John P. Coffey purchased a tract for $18,000, executing a contract of purchase and the three notes in suit, aggregating $9,000, as earnest money payments on the purchase price thereof.Of these notes, one for $1,000 was due on February 26, 1922; one for $4,0o0 was due eighteen months from date; and one for $4,000 was due in one year from date.These notes each contained the provision, with interest at the rate of 6 per cent per annum from date if paid when due, if not paid when due, 8 per cent from date.”

The defendants, while admitting the execution of these three notes, allege that the signature of the decedent was obtained under circumstances which are set out at length in their answer, but which may be abbreviated somewhat as follows: That Coffey, at the time he signed the three notes, was suffering from a complication of diseases, as a result of which his mind had also become weakened, whereby he“was easily influenced by glib-tongued strangers offering opportunities of great pecuniary profit”; that he was incapable of transacting his own business affairs with ordinary discretion, and that, on the trip to Texas, a representative of the San Benito Land Company“constantly remained with him and exercised constant surveillance over him, and did not allow Coffey to converse with any one in San Benito regarding the value of lands, or to obtain any other information regarding the character, quality, or value of lands in that country,” with which he was totally unacquainted; that Coffey relied upon what they said regarding the value of the land; and that, “taking advantage of his physical and mental infirmities,”they falsely and fraudulently stated that this particular tract of land was “then and there of the fair cash market value of $18,000 and rapidly increasing in value,” and “capable of producing large yields of valuable crops and large profits to the owner when properly cultivated,” and that, “because of his weakened physical and mental condition, he was induced to believe those representations” and to sign the notes in suit, which he would not have done had he been “in a healthy and normal condition”; that in truth and in fact said tract of land was, at the time and ever since said time, “of no market value whatever and wholly worthless for any purpose”; that promptly after discovering the “fraud hereinbef ore described”the executors“duly tendered to said land company” a return to it of the contract so executed and “demanded a return and surrender to them” of the notes, “and notified said company of their election to disaffirm said contract and notes on account of the aforesaid fraudulent practices,” and of the incapacity of John P. Coffey to transact business of any kind.

It is difficult to determine, from that portion of the defendant’s answer, whether the defense intended to be pleaded was mental incapacity to contract, duress in obtaining the contract, fraud, failure of consideration, or rescission.

As to what occurred at the time of the giving of these notes, only, one witness testified; that being Mildred C. Coffey, executrix and codefendant.The name of Mildred C. Coffey appears on the notes in suit, not only as a signer with her husband, but also as an indorser with him.She testified that her husband and herself were out with one Elsinger and his daughter and another man whose name she did not know, driving about San Benito both forenoon and afternoon of the first day they were at San Benito, and looked at a piece of land about a half mile northeast of San Benito.They first saw the west end of the land and noticed an irrigation ditch along it, which irrigation ditch was higher than the land.It was not under cultivation; but some grass was growing on it—dry, stunted, blackened grass.When they got back to the railroad car, Elsinger referred to the land; but Coffey was not able to talk to him that night, because he was completely exhausted and retired early.The following day, Coffey, Mrs. Coffey, Elsinger, and others were again out in an automobile.The train left San Benito in the evening; and about 6 o’clock or earlier in the evening Elsinger asked Coffey and Mrs. Coffey to go into the private office at the end of the car, and they did; and he then asked Coffey if he would consider that the land was worth taking and if it would not be something he would want to make use of; and Coffey told him he was not ready to buy any land in Texas, and that he would not consider any land or make any contract or any agreement to take the land, which apparently ended the interview that evening.The next morning, Elsinger again came to the Coffeys and talked to them about it, and they again went into his private office, where he said that he was sure Coffey would be sorry if he let this opportunity go by to get this particular piece of land, that the land was very productive, and some time previously had produced enormous crops of cabbages and other garden trucks, and that, on account of its location, it would be particularly beneficial to his health, and at the same time would produce crops that would pay for the land itself and be very productive.He said it was worth $800 an acre.It was during this conversation that the notes in suit and the contract of purchase were signed.On cross-examination, she testified: That the ditches were on both sides of the farm, and they were higher on both sides, and the water could be run onto the land, but it was dry at the time.The first day they were at San Benito, she and her husband were out together in the forenoon and afternoon, but had dinner in the car.That it was one of those excursions where they were taken down there for the sole purpose of looking at the country and buying land if they wished, and they understood that when they left Kansas City.She did not know how many went out to see the land, but there were five in their car, and there were other cars out.On the second day, they were out again, and the next night they left.She also testified...