Fenrick v. Olson, 39100

• Decision Date: 06 November 1964
• Docket Number: No. 39100,39100
• Citation: 131 N.W.2d 235,269 Minn. 412
• Parties: E. A. FENRICK, Admr. of Estate of Myron C. Gilman, aka Myron Cleo Gilman and M. C. Gilman, deceased, et al., Respondents, v. Lillian OLSON, et al., Defendants, Lillian Olson, Appellant.
• Court: Minnesota Supreme Court

Page 235

131 N.W.2d 235

269 Minn. 412

E. A. FENRICK, Admr. of Estate of Myron C. Gilman, aka Myron

Cleo Gilman and M. C. Gilman, deceased, et al., Respondents, v. Lillian OLSON, et al., Defendants, Lillian Olson,

Appellant.

No. 39100.

Supreme Court of Minnesota.

Nov. 6, 1964.

Syllabus by the Court

1. Where plaintiff is induced by fraud or concealment of one with whom a fiduciary relationship exists to execute deeds conveying to defendant all plaintiff's interests in certain real property without consideration therefor, equity may properly require cancellation of such deeds as to defendant.

2. Where plaintiff was 71 years of age and inexperienced in real estate and business transactions at time she was induced by her husband to execute two quitclaim deeds which conveyed to defendant, a friend of her husband, all her interests in real property described in deeds; and where at time she signed deeds they had been folded so that she could not read them and did not know that they conveyed to defendant all plaintiff's interests in such property without consideration, Held such evidence adequate to support findings that plaintiff had been unaware that deeds were intended to convey her interests in property and that their execution was without consideration and that hence deeds were null and void in hands of defendant and should be canceled.

3. Where evidence established that husband who had executed deeds at same time had thereafter retained possession of deeds and property described therein throughout his lifetime; that he had likewise retained a power of attorney from defendant which empowered him to nullify the effect of deeds at any time; and that throughout his lifetime he had continued to exercise full control and ownership of property as evidenced by his leasing of it, his collection of rents therefrom, and his ultimate sale of it to another, Held such evidence adequate to support finding that husband had never divested himself of ownership of property, notwithstanding fact that just prior to his death he had recorded deeds. Record of deed may not be conclusive evidence of its delivery to grantee named therein.

4. Where trial court's determination that tract covered by one of deeds was not subject to contract for deed thereon in favor of third party appears inconsistent with testimony of plaintiff with respect thereto, Held such determination should not foreclose third-party purchaser in any future action he might bring for reformation of contract for deed to conform to intent of parties thereto.

Brehmer & McMahon, Winona, for appellant.

Emmett F. Tighe, St. James, for respondents.

THOMAS GALLAGHER, Justice.

Action by the administrator of the estate of Myron C. Gilman, deceased, and by Harriet L. Gilman, widow; and Jean Beckland, Dana Gilman, and Warren P. Gilman, children of deceased, against defendant Lillian Olson to cancel two quitclaim deeds executed on September 6, 1960, by decedent and Harriet L. Gilman, his wife, in which defendant was named as grantee. ¹ Upon special findings of the jury and additional findings by the court, judgment was ordered canceling the deeds and this is an appeal from the judgment entered pursuant thereto.

Plaintiff's action for cancellation of the deeds is based upon the grounds (1) that Harriet L. Gilman at no time received any consideration for her execution thereof or the conveyance of the property described therein; (2) that at the time she executed the deeds she did not know or understand that they conveyed her interests in the property to defendant; (3) that she had been induced by the fraud and concealment of her husband to execute them; and (4) that the deeds never having been delivered, they had not divested the Gilmans of title to the property at the time of the death of Myron C. Gilman on November 2, 1961.

The first quitclaim deed, dated July 1, 1960, purported to convey to defendant an 80-acre tract in Watonwan County described as follows:

'The South Half (S 1/2) of the Southeast Quarter (SE 1/4), Section Thirty (30), Township One Hundred Five (105), Range Thirty (30), Watonwan County, Minnesota.'

The second quitclaim deed, dated July 12, 1960, purported to convey to defendant a 48.5-acre tract in Martin County described as follows:

'Lot One (1), Section Six (6), Township One Hundred Four (104), Range Thirty (30), Martin County, Minnesota, containing 48.5 acres more or less.'

On September 6, 1960, the two deeds were executed and acknowledged by the Gilmans before E. W. Heck, a notary public in Buffalo County, Wisconsin, where the Gilmans resided. Thereafter they were never delivered to defendant. At the time of the execution of the deeds, title to the 48.5 acres in Martin County was in Myron C. Gilman and Harriet L. Gilman, husband and wife, as joint tenants; and title to the 80 acres in Watonwan County was in the name of Myron C. Gilman alone. The two tracts were adjacent to each other and with the north half of the southeast quarter of section 30, township 105, range 30, Watonwan County, were operated as a single farm.

On November 4, 1960, at the request of Mr. Gilman, defendant executed and delivered to him a power of attorney with respect to the tracts described in the two quitclaim deeds which empowered him as follows:

'To enter into and upon all and singular of the above described real estate, and to let, manage and improve the same or any part thereof, and to repair or otherwise improve or alter, and to insure the buildings thereon.

'To borrow money and make, execute, sign and deliver mortgages of real estate to the above described premises, now owned by me and standing in my name and to make, execute, sign and deliver any and all promissory notes necessary in the premises.

'To grant, bargain and sell the above described premises, or any part thereof, for such price, and on such terms, as to him shall seem meet, and for me and in my name, to make, execute, acknowledge and deliver, good and sufficient deeds and conveyances for the same, either with or without covenants and warranty.

'Granting and giving unto said Attorney in Fact full authority and power to do and perform any and all other acts necessary or incident to the performance and execution of the powers herein expressly granted, with power to do and perform all acts authorized hereby as fully to all intents and purposes as the grantor might or could do if personally present, with the full power of substitution.'

This power of attorney was never recorded but was retained by Myron C. Gilman throughout his lifetime. While the two deeds and the power of attorney were still in his possession, two contracts for the sale of the entire farm to Loren G. Wessel were executed and delivered as follows:

On October 16, 1961, in Mondovi, Wisconsin, Myron C. Gilman and Harriet L. Gilman, his wife, executed a contract under which they agreed to sell and convey to Loren G. Wessel the entire southeast quarter of section 30, township 105, range 30, Watonwan County, upon payment of the purchase price in accordance with terms set forth in such contract. (This included the south half of this quarter section, which was the subject of the first quitclaim deed above described.)

On October 16, 1961, in Mondovi, Wisconsin, Myron C. Gilman, as attorney in fact for Lillian Olson, executed a contract under which Myron C. Gilman, as attorney in fact for Lillian Olson, agreed to sell and convey to Loren G. Wessel the 48.5 acres in Martin County upon payment of the purchase price in accordance with terms set forth in such contract. (This was the tract which was in the name of Myron C. Gilman and Harriet L. Gilman as joint tenants.)

On October 20, 1961, Mr. Gilman, accompanied by defendant, took the two contracts described to the Minnesota farm where Mr. Wessel, who was then a lessee thereof, was working. All three then drove to Truman, Minnesota, where Mr. Wessel executed and acknowledged the contracts before a notary public. An executed copy of both such contracts was then delivered to him. On the same date, Mr. Gilman, accompanied by defendant, drove to Fairmont, the county seat of Martin County, where the quitclaim deed to defendant on the Martin County land and the contract for deed to Wessel were recorded at 1:50 p.m. Mr. Gilman and defendant then returned to Wisconsin. On November 1, 1961, Mr. Gilman, unaccompanied by defendant, drove to St. James, Minnesota, the county seat of Watonwan County, and at 4:30 p.m. that date recorded the quitclaim deed covering the 80-acre tract in Watonwan County. At the same time he paid the registration tax on the contract for deed to Wessel on this tract, but did not record it. He then returned to Wisconsin, where he died the following day, November 2, 1961. At the time the deeds and the contract for deed were recorded as above described, written instructions were placed thereon which directed the register of deeds to return them to Myron C. Gilman in Mondovi, Wisconsin. Shortly after his death, both deeds and the power of attorney were found in his briefcase.

Defendant was permitted to testify that when Mr. Gilman came out of the courthouse at Fairmont he told her 'he had recorded those papers for that land that should be mine' and that 'he also said he had my name on the land where the buildings were on when he came back to the car from the courthouse.' She testified also that 'he had mentioned the 48 1/2 acres'; 'he wanted me to have that' because 'I had always been good to him.'

Harriet L. Gilman testified that at the time she signed and acknowledged the deeds she had been entirely unaware of their nature; that neither their contents nor their effect had ever been explained or disclosed to her; that she had been taken by her husband, in whom she imposed her trust and confidence, to the bank in Mondovi, Wisconsin, to sign some 'papers'; that she had then gone to a window in the bank where some papers, which were folded, had been presented to her and which she...