Parrish v. Peoples

• Decision Date: 21 April 1943
• Docket Number: No. 33392.,33392.
• Citation: 9 N.W.2d 225,214 Minn. 589
• Parties: PARRISH v. PEOPLES et al.
• Court: Minnesota Supreme Court

214 Minn. 589
9 N.W.2d 225

PARRISH
v.
PEOPLES et al.

No. 33392.

Supreme Court of Minnesota.

April 2, 1943.
Rehearing Denied April 21, 1943.

Appeal from District Court, Hennepin County; E. A. Montgomery, Judge.

Action by Alice M. Parrish, by John D. Nelson, her legal guardian, against William F. Peoples and others, to cancel a deed executed by plaintiff prior to the adjudication of her incompetency. The trial court made findings for defendants, and, from an order denying plaintiff's motion for amended findings or a new trial, plaintiff appeals.

Reversed with directions.

[9 N.W.2d 226]

Syllabus by the Court.

1. In pleading fraud the material facts constituting the fraud must be specifically alleged; a general charge of fraud is unavailing. Fraud is not presumed but must be affirmatively proved, and one who alleges fraud carries the burden of proof throughout the trial.

2. On conflicting testimony, the issue of insufficiency of consideration cannot be disturbed on review unless the finding is palpably contrary to the evidence.

3. The evidence supports the finding that there was no undue influence.

4. The law aims to protect the property and estate of one who is in fact incapable of doing so for himself. The test of competency to execute a deed is whether the grantor had sufficient mental capacity to know and understand the nature and effect of his act. Held, under facts disclosed in opinion, that a new trial should be granted on the issue of competency in the interests of justice.

JULIUS, J. OLSON, LORING, and HILTON, JJ., dissenting.

Ernest Malmberg, of Minneapolis, for appellant.

Reuder & Carroll and Henderson, Schwartz & Halpern, all of Minneapolis, for respondents.

YOUNGDAHL, Justice.

This is an action by the guardian of Alice M. Parrish to cancel a deed executed by her prior to the adjudication of her incompetency. In the court below findings were made for defendants. Plaintiff moved for amended findings or a new trial, and appeals from the order denying the motion.

On December 3, 1941, Mrs. Parrish, by warranty deed, conveyed to defendants, husband and wife, as joint tenants, certain real property for a consideration of $800. This conveyance contained approximately eight acres and was a portion of the farm on which Mrs. Parrish lived and which she and her husband, Carl Parrish, had owned as joint tenants prior to his death on November 22, 1940. The purchase price was represented by a cash down payment of $240, and the balance was evidenced by an unsecured promissory note.

The negotiations which finally led up to the sale of this property were begun in November 1941. A contract was executed by Mrs. Parrish whereby she listed her property for sale exclusively with Mr. Peoples at a price of $1,000, less a commission of $100 to him. Peoples was then and had been for some time in the real estate and contracting business. Then followed numerous conferences and discussions regarding the sale of the property. Apparently Mrs. Parrish was eager to dispose of the property. Peoples communicated with certain prospective purchasers whom he thought might buy but was unsuccessful in making a sale. It was then proposed that Peoples himself purchase it. To this he agreed, for a consideration of $800. Mrs. Parrish engaged one Berscheid to make a survey. He went to the Parrish farm for this purpose, and after Mrs. Parrish's son designated the property to be sold he prepared a plat thereof. The most southerly line of the property, as refliected by the plat, was not straight, and at Peoples' request the surveyor revised the plat, straightened the south boundary, and by doing so included some additional land not in the original survey. Mrs. Parrish, however,

[9 N.W.2d 227]

signed the plat as revised, and the conveyance was thereafter executed accordingly.

On March 6, 1942, upon the petition of Mrs. Parrish, the probate court of Hennepin county adjudged Mrs. Parrish an incompetent, and a guardian was appointed in her behalf.

This action to cancel the deed in question was begun shortly thereafter.

Plaintiff's assignments of error involve the consideration of four issues, namely:

(1) That defendants falsely and fraudulently made certain representations as to the value and quantity of the property conveyed.

(2) That the consideration for the deed was insufficient.

(3) That defendants exerted undue influence over plaintiff in the execution of the deed.

(4) That plaintiff was incompetent at the time of the transaction to manage her own business affairs.

1. Plaintiff has not properly pleaded fraud. In pleading fraud, the material facts constituting the fraud must be specifically alleged. A general charge of fraud is unavailing. Plaintiff's charge of fraud is general and therein fails to meet this requirement of pleading. 3 Dunnell, Dig. & Supp. § 3836, and cases cited. Nor was fraud proved. Fraud is not presumed but must be affirmatively proved. One who alleges fraud has the burden of proof and carries this burden throughout the trial. The evidence reasonably supports the court's finding that there was no fraud. Id. § 3837.

2. Although there was great disparity in the testimony on value and strong support in the evidence that the land conveyed was worth considerably more than the price for which it was sold, we believe that on the record before us the issue of sufficiency of consideration was properly a fact question for the lower court to determine. Having been decided adversely to plaintiff, we cannot disturb the finding on review unless such finding is palpably contrary to the evidence. 1 Dunnell, Dig. & Supp. § 411.

3. Plaintiff likewise had the burden of proving undue influence in connection with the execution of the deed. The court found that there was no undue influence exerted, and the evidence supports this finding. 6 Dunnell, Dig. & Supp. § 9950.

4. In considering the contention of plaintiff that the evidence does not reasonably support the finding of competency, we are at the outset confronted with the rule that on appeal the testimony must be considered in the light most favorable to the prevailing party. Giving defendants the benefit of this rule, we must determine whether the court's finding that Mrs. Parrish was competent at the time of the execution of the deed is reasonably supported by the testimony. The evidence reveals that she was 47 years of age, the mother of 14 children, and that prior to the death of her husband had transacted little, if any, business. She had been confined to a life of simple domesticity and depended exclusively upon her husband to make decisions in business matters. Shortly after his death in 1940, she sold four or five acres of her farm land, contiguous to the property now in litigation, for a consideration of $1,700. The defendants, less than a year later, purchased nearly eight acres of comparable property from her for $800. The two realty experts, testifying for defendants, placed a maximum value of $900 and $1,000, respectively, on the property. One expert, however admitted that no stakes or iron monuments were pointed out to him when he viewed the property for appraisal purposes. His testimony was very vague as to the location of the property lines, and he admitted that he relied entirely upon information given to him by defendant William F. Peoples as to what piece of property it was. In behalf of plaintiff, the Orono township assessor testified that the assessed valuation of the property for tax purposes was $1,800. Sam W. Batson, a real estate dealer in Hennepin, county for 20 years, placed its value at $2,500. Kenneth Bollum, cashier of the State Bank of Long Lake since 1914, placed the value at $400 to $500 an acre. Although the evidence on value was a fact question on the issue of sufficiency of consideration, which, having been determined adversely to appellant, cannot be disturbed on review, it is proper to be considered here insofar as its bears upon the question of Mrs. Parrish's competency to execute the deed complained of.

The only opinion evidence on the issue of competency is that of Kenneth Bollum. Because of his long acquaintance with Mrs. Parrish and her family, he was well qualified to state his opinion from personal knowledge regarding her competency to transact business. His assertion was positive

[9 N.W.2d 228]

that she was incompetent to take care of her own affairs. This testimony is not controverted, either directly or by inference from other facts and circumstances. In fact, considering her own testimony and the evidence as a whole, there is a strong supporting inference of incompetency. It is true, Bollum stated on cross-examination that the reason for his opinion was the fact that money passed through her hands too freely. This reason may not of itself be an adequate basis for establishing incompetency, yet it was a layman's manner of expressing himself on the issue. More accurately expressive, we believe, is his statement with reference to inquiries made by Mrs. Parrish while at the bank as to whether or not she should purchase certain stock for her farm. He stated that these were not ‘intelligent, purposeful inquiries.’ While the cross-examination of Bollum indicated that the basis for his opinion was not as satisfactory as it should be, the fact is that he, a credible witness, a banker of many years' experience, and long-time resident in the community, gave positive and unrefuted testimony that in his opinion Mrs. Parrish was incompetent to transact business. We do not believe the trial court was at liberty to disregard this testimony. When interrogated by the court regarding this transaction, Mrs. Parrish was unresponsive and her replies vague and rambling. She obviously failed to grasp the import of the court's questions relating to the boundary lines of the property sold and appeared to attach no importance to the fact that she did not know the location of the south line thereof. Emphasized through repetition was her one remark that she thought she...