Nevin v. Hoffman

• Decision Date: 29 October 1970
• Docket Number: No. 456-69,457-69.,456-69
• Citation: 431 F.2d 43
• Parties: George NEVIN, Guardian of the person and estate of Viola M. Nevin, an incompetent person, Appellant, v. Jay A. HOFFMAN and Hazel I. Hoffman, his wife, Appellees. George NEVIN, Guardian of the person and estate of Viola M. Nevin, an incompetent person, Appellant, v. Jay A. HOFFMAN and Hazel I. Hoffman, his wife, Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

431 F.2d 43 (1970)

George NEVIN, Guardian of the person and estate of Viola M. Nevin, an incompetent person, Appellant, v. Jay A. HOFFMAN and Hazel I. Hoffman, his wife, Appellees.

George NEVIN, Guardian of the person and estate of Viola M. Nevin, an incompetent person, Appellant, v. Jay A. HOFFMAN and Hazel I. Hoffman, his wife, Appellees.

Nos. 456-69, 457-69.

United States Court of Appeals, Tenth Circuit.

September 2, 1970.

Rehearing Denied October 29, 1970.

James W. Sargent, of Jochems, Sargent & Blaes, Wichita, Kan. (Bruce W. Zuercher and Richard A. Loyd, of Jochems, Sargent & Blaes, Wichita, Kan., on the brief), for appellant.

Harry E. Robbins, Jr., of Gamelson, Hiebsch, Robbins & Tinker, Wichita, Kan., (Brainard L. Anderson, Tribune, Kan., on the brief), for appellees.

Before ORIE L. PHILLIPS, BREITENSTEIN and HILL, Circuit Judges.

HILL, Circuit Judge.

This appeal involves a diversity suit brought by appellant Nevin for cancellation of a deed under which appellees hold title to a section of land in Greeley County, Kansas. The case was tried to the court without a jury, and the trial judge made findings of fact and conclusions of law. On those findings and conclusions, the trial judge entered an order allowing appellant ninety days to provide for the payment of $67,000 to appellees, at which time the court will declare appellees' deed null and void. It was further ordered that in the event that appellant failed to provide for the payment to appellees, title to the land will be quieted in appellees. Appellant takes this appeal primarily asserting that the trial judge erred by failing to hold that the deed was absolutely void even as against a bona fide purchaser.

The facts are long and involved but not in dispute. Viola Nevin, an elderly widow, resided alone in San Dimas, California. In 1960, she hired one Billy Earl Dacus, who was then a high school student, and one Marvin Taylor to do yard work around her home in San Dimas. They worked for her until 1964; in January of 1966 Dacus and Taylor returned to work for Viola as general handymen. Dacus assisted her in paying bills, running errands, and conducting her business affairs. Her business affairs included ownership of property in several states including a section of land in Kansas. Soon Dacus was in charge of her savings and checking accounts, and had free access to her business papers.

Viola Nevin had five sons, one of whom is appellant George Nevin, her recently appointed guardian. Appellant Nevin lived nearby his mother and although he visited her often he never met Dacus and Taylor and was unaware of Dacus' influence over her. He was aware of her mental lapses and he tried to persuade Viola to go into a hospital or rest home, or to live with him or a brother; but Viola refused to leave home and did not want anyone to stay with her. Since Viola had her "good days" her son did not insist that she be supervised.

After Dacus gained possession of Viola's bank books, he found it easy to convert large sums of money from her checking and savings accounts. Viola's signature was obtained by various tricks and subterfuges, frequently by telling her that her signature was needed by Dacus on a piece of paper which was represented to be a school reference. Moreover, Viola was in a declining mental state and the evidence is ample that she did not understand the meaning of the acts she was doing at Dacus' behest.

These were the circumstances when on March 19, 1966, Dacus obtained Viola's signature on a deed which purportedly conveyed her land in Kansas to Dacus. Viola's signature was obtained, according to Dacus, by representing to her that the deed was some sort of paper that Dacus needed for school. At the time that Viola signed the deed she had just awakened and did not have her glasses on; she simply signed where Dacus placed her hand and without further examining the document. Subsequently, Dacus realized that her signature on the deed must be notarized, so he took her to a notary public telling her only that she had to have some papers notarized. According to Dacus' description of that occasion, she was childishly excited at the opportunity to go into town, and when they got to the notary's office she was interested only in the printing presses which were running in the back of the notary's shop. Dacus further stated that he did not think she knew what was happening at the notary's office, and she simply signed wherever Dacus told her to sign. Her signings included an acknowledgment of her signature on the deed and a letter of recommendation for Dacus.

At the time when Viola signed the deed and when she acknowledged her signature on the deed, she had not been adjudged incompetent. But the trial judge found that at these times she did not possess sufficient mind to understand, in a reasonable manner, the nature and effect of the act in which she was engaged.

Having obtained the deed, Dacus had it recorded in Greeley County, Kansas. His objective was to sell the land to one Jay Hoffman, whom Dacus knew to be a potential buyer. Appellee Hoffman had farmed the land in controversy since the 1930's, originally as a tenant of Viola's parents, the Vanimans. The tenancy was an oral arrangement, and with respect to this agreement, Hoffman reported to the Vanimans through Paul Sargent and Earl Reed, who were related to the Vanimans and who lived in Kansas. In the early 1950's, Reed informed Hoffman that Viola had inherited the land, and thereafter Hoffman secured a rental arrangement with Viola so that he could continue farming the land. Appellee Hoffman never met Viola or even talked to her on the telephone, and he conducted his business with Viola by letters several times a year. In his letters reporting on the planting and sale of crops, Hoffman several times over the years expressed an interest in purchasing the land because he had already acquired land on three sides of Viola's property.

Armed with the deed and the knowledge that Hoffman wished to buy the land, Dacus and Taylor departed for Kansas. Upon arriving in Kansas, they first contacted a real estate broker and obtained an appraisal of the land at $67,000. Next they drove to the Hoffmans' home and Dacus informed appellees that he was now the owner of the land and that he wished to sell it. Dacus was well dressed and knowledgable about Viola's affairs; he explained that Viola had given him the land as a gift as he had been a loyal employee for seven years. He said she had also suggested that Dacus contact Hoffman who might want to buy the land. After some discussion concerning the price, Hoffman agreed to buy the land for $67,000 with a three year installment arrangement suggested by Dacus for income tax purposes.

The sale was agreed upon, pending the preparation of an abstract of the title, and Dacus and Taylor returned to California. Subsequently, Dacus had advised Hoffman that he had changed his mind about the installment arrangement and he now wanted cash because he wished to invest in a California business. Hoffman agreed and a sales agreement was drawn up on April 11, 1966, with part of the money in escrow and the balance to be paid upon acceptance of title.

Hoffman was admittedly curious about Viola's gift of land to Dacus and he wrote to Viola in the second week of April inquiring about the change of ownership and the proper division of crop payments. The letter was intercepted by a member of Dacus' family who by this time had the complete run of Viola's house. To formulate a reply letter which would satisfy Hoffman's suspicions, a member of Dacus' family prepared a sheet of paper with penciled writing relating to income taxes and presented this to Viola with the explanation that her signature was necessary. After she signed the paper, the writing was erased and a letter was typed above the signature which in substance assured Hoffman that Viola had given the land to Dacus. Upon receiving the letter, Hoffman compared the signature to that on previous letters from Viola and was satisfied that Dacus was the legitimate owner of the land.

Subsequently, on June 1, 1966, Hoffman paid the full purchase price into escrow and the same was distributed to Dacus less $5,000 which was held in escrow pending resolution of an outstanding mineral interest. Soon thereafter, in June of 1966, appellant Nevin learned of Dacus' activities. Civil and criminal actions were filed in California against Dacus and the other conspirators, and Dacus is presently in prison serving a sentence for grand theft as a consequence of his conversion of Viola Nevin's property.

From these facts, we have on appeal the action brought by appellant Nevin, guardian of Viola Nevin, seeking to cancel the deed under which appellees hold title, or in the alternative seeking damages. The issue we are confronted with is whether the deed is void for all purposes as appellant contends, or whether it is merely voidable and thereby subject to the claims of a bona fide purchaser as the trial judge held. If the deed is merely voidable we must also determine whether the trial judge correctly decided that appellees were bona fide purchasers and therefore not subject to the infirmities in the chain of title. At the outset we note that in diversity cases, ordinarily we defer to the trial judge's view of unclear state law unless his view is clearly erroneous.¹

The critical finding of fact made by the trial judge is that Viola Nevin did not possess sufficient mind to understand, in a reasonable manner, the nature and effect of the acts in which she was engaged. In other words, she was mentally incompetent when she signed the deed and acknowledged her signature on the deed. The trial judge went on to find that while fraud, undue influence, and trick were a part of Dacus' scheme, they had no real effect upon one without the will to resist, and the determining factor in the conveyance to Dacus was the mental incapacity of Viola Nevin. Upon...