In re Christian

• Decision Date: 18 April 1931
• Docket Number: No. 1920.,1920.
• Parties: ELIZA R. P. CHRISTIAN, AN INCOMPETENT PERSON, BY HERMAN V. VON HOLT, HER GUARDIAN, v. WAIALUA AGRICULTURAL COMPANY, LIMITED, AN HAWAIIAN CORPORATION, AND JAMES L. HOLT.
• Court: Hawaii Supreme Court

31 Haw. 817

ELIZA R. P. CHRISTIAN, AN INCOMPETENT PERSON, BY HERMAN V. VON HOLT, HER GUARDIAN,

v.WAIALUA AGRICULTURAL COMPANY, LIMITED, AN HAWAIIAN CORPORATION, AND JAMES L. HOLT.

No. 1920.

Supreme Court of the Territory of Hawai‘i.

Argued February 2, 3, 4, 1931.

Decided April 18, 1931.

OPINION TEXT STARTS HEREAPPEAL FROM CIRCUIT JUDGE FIRST CIRCUIT. HON. A. M. CRISTY, JUDGE.

Syllabus by the Court

The deed of a person who is mentally incompetent to execute it but whose incompetency has not been judicially ascertained and is otherwise unknown to the beneficial grantee is not void solely because of the incompetency of the grantor but merely voidable.

In a suit to have such a deed canceled it will be set aside regardless of the adequacy of the consideration and the good faith of the beneficial grantee in dealing with the incompetent if such grantee can be restored to his status quo ante and no injustice will be done him by the cancellation of the deed.

In a suit to cancel the deed of a grantor, who is mentally incompetent to execute it, conveying a contingent interest in land, the restoration of the beneficial grantee to his status quo is not prevented by the increased value of the interest conveyed, which increase is the result of natural causes; nor is the fact that such grantee has, during his occupancy of the land, after receiving the deed, placed permanent improvements thereon an impediment to his restoration to his status quo if upon cancellation of the deed he and his grantor become tenants in common of the land. In such circumstances he can by a suit for partition secure full restoration of or compensation for such improvements.

Laches is not imputable to a person whose mind is so enfeebled as to incapacitate him from executing a valid deed to an interest in land, nor is such person barred by our statute of limitations if in a suit for the cancellation of the deed more than six years from its execution have elapsed.

A contingent remainder in land is demisable.

When in a suit for the cancellation of a deed on the ground of the mental incompetency of the grantor the deed is canceled and it appears that prior to the deed the grantor had joined in a lease of the land to the beneficial grantee, the term of which had not expired at the time of the trial, the lease is not merged in nor extinguished by the deed.

When in a suit to cancel a deed to an interest in land the deed is set aside because of the mental incompetency of the grantor and it appears that prior to the deed the grantor had joined as a consenting party in a lease to the respondent, the term of which had not expired at the time of the trial, and the issue of whether the lease was invalid as to her because of her mental incompetency was not within the issues presented by the pleadings, a decree for rents against the respondent who claimed the right of possession under the lease is erroneous.

An instrument in writing which is valid as an assignment of the rents derivable from land should, although for statutory reasons it might be void as a conveyance of an interest in the land itself, be given effect as an assignment of rents when giving it such effect is necessary to the accomplishment of the purpose the assignor intended to accomplish.

Barry S. Ulrich ( Ulrich & Hite on the briefs) for petitioner.

A. L. Castle and H. Phleger ( Brobeck, Phleger & Harrison and Robertson & Castle on the briefs) for respondent Waialua Agr. Co.

PERRY, C. J., BANKS AND PARSONS, JJ.

OPINION OF THE COURT BY BANKS, J.

This is a suit in equity brought by Eliza R. P. Christian, an alleged mental incompetent, by her duly appointed guardian, for the cancellation of a deed of conveyance of a contingent interest in land situated on the Island of Oahu, and for other incidental relief. The circuit judge before whom the case was tried entered a decree canceling the deed so far as it related to the petitioner and as incidental relief decreed that the Waialua Agricultural Company, one of the respondents, pay to the guardian of the petitioner the sum of $540,906.07. The Waialua Agricultural Company brings the case here on appeal from the decree.

The deed in question was executed by the petitioner at Oxford, England, on May 2, 1910, the grantee being James L. Holt, a respondent in the instant case. At that time the petitioner, by virtue of the will of her grandfather, R. W. Holt, long deceased, and by virtue of her being the only surviving child and prospective heir of John Dominis Holt, who was then living, and who under the will of R. W. Holt was given a life estate, was the owner of an estate in remainder in an undivided one-third interest in the lands described in the deed. This interest passed by successive conveyances from grantor to grantee until on July 20, 1921, it came finally to rest in the Waialua Agricultural Company, where it remained unchallenged until May 8, 1928, when the present suit was brought.

On April 10, 1922, John Dominis Holt, the life tenant, died leaving surviving him as his sole heir at law his daughter, Eliza R. P. Christian. Upon the happening of this event Eliza's contingent estate in remainder ripened into a vested estate in fee simple. The deed executed by her on May 2, 1910, purported to convey to James L. Holt, the grantee, not only the interest which she at that time had but also purported to convey every interest which she might thereafter acquire under the will of R. W. Holt. If this deed was valid and binding on her it divested her of all interest in the property, whether present or prospective, and vested it in her grantee and by subsequent conveyances it became the property of the Waialua Agricultural Company.

The question therefore that lies at the very threshold of the case is whether Eliza Christian, at the time she executed the deed of May 2, 1910, had sufficient mental capacity to make a valid and binding conveyance of her interest in the lands described in the deed. This is a question of fact, upon which much conflicting evidence was taken. The circuit judge made the following findings regarding the petitioner's mental competency: “Upon the weight of the testimony and the credibility of the witnesses, as herein summarized in connection with the question of competency, the court finds: 1. Eliza (Holt) Christian, petitioner, neither was, nor is, an idiot, a lunatic or utterly imbecile. 2. She was and is, however, a person of undeveloped intellect, incapable of forming a reasoned judgment or understanding, incapable of comprehending her own right to an independent status, the extent or nature of property or of her property interests, the value of money, or the ordinary matters of life essential to a reasonable degree of independent living. 3. She had insufficient mental capacity to comprehend the difference between $100.00 and $1,000.00; between $30,000.00 or $60,000.00 for her individual rights; or to comprehend the difference between payment to her individually, for her sole disposition, of any such sum or sums and payment to her circle of relatives and under their control; or whether $30,000.00 or any sum was for her rights as distinct from the rights of others involved in the deal; or the difference between present payment of income and future payment of principal; or to understand that she had rights distinct and independent of her father or of Annie Kentwell. 4. She could not possibly have comprehended, even with advice worthy of trust, the elements necessary to form an independent judgment or to exercise a reasonable measure of choice or of will relative to the value of cane land, pineapple land, ranch land or any kind of land in any quantity; or of postponed rights therein as opposed to present interests; or even the elementary character of her rights and direct the disposition of what she owned. 5. The court is convinced that Eliza did not have the most elementary capacity to understand and judge her rights and protect herself from undue influence and fraud; and that at no time was she an independent actor with a knowledge of her rights. 6. In short, she was mentally incompetent to execute a conveyance in 1910 or at any other time within the scope of the evidence and the law in this case.”

It has long been the rule in this court that “in equity cases, on appeal, while the findings of the circuit judge are given weight and under certain circumstances, especially on pure issues of fact, would be allowed to control, the supreme court nevertheless is authorized and has always exercised its right and duty to weigh the evidence and to make its own findings.” Godfrey v. Kidwell, 15 Haw. 526 (1904). See also Cha Fook v. Lau Piu, 10 Haw. 308 (1896).

In compliance with the duty imposed upon us by law we have carefully read the entire transcript of the evidence, consisting of some three thousand typewritten pages, bearing upon the petitioner's mental condition, with the view of determining whether she was incapable of making a valid conveyance of her interest in the lands in question. We have weighed this evidence to the best of our ability and from it have reached the conclusion presently to be stated.

Of course a deed to land executed by a person who is sui juris is presumed to be valid and will not be upset because of the mental incompetency of the grantor unless the incompetency was of so marked a degree as to be the equivalent of a lack of capacity to make a binding contract. The highest degree of intelligence is not necessary to bind the grantor, nor is the lowest degree essential to the avoidance of the deed. Between these extremes lies the fate of the deed. In Black on Rescission and Cancellation, § 262, the following rule is given: “No particular degree of mental capacity is essential to enable one to execute a valid deed or contract, and no arbitrary standard is or could be established. No very high measure of intelligence or acumen is required, and on the other hand, a person may be mentally incompetent for business and legal purposes...