Sands v. Potter

• Decision Date: 09 November 1896
• Citation: 165 Ill. 397,46 N.E. 282
• Parties: SANDS v. POTTER.
• Court: Illinois Supreme Court

165 Ill. 397

46 N.E. 282

SANDS

v.POTTER.¹

Supreme Court of Illinois.

Nov. 9, 1896.

Appeal from appellate court, Second district.

Action by Obadiah Sands against Charles H. Potter. From a judgment of the appellate court (59 Ill. App. 206) affirming a judgment for plaintiff, defendant appeals. Affirmed.

Chas. Wheaton, for appellant.

C. F. Irwin and Botsford & Wayne, for appellee.

BAKER, J.

Obadiah Sands, the appellant, was engaged in the business of making, buying, and selling butter and cheese. On January 30, 1891, he and Charles H. Potter, the appellee, entered into a written contract as follows: ‘This agreement, made this thirtieth day of January, A. D. 1891, between O. Sands, of Chicago, Ill., party of the first part, and C. H. Potter, of Elgin, Ill., party of the second part, witnesseth: That in consideration of one dollar to each in hand paid, the receipt whereof is hereby acknowledged, the party of the first part hereby agrees to employ the party of the second part for a period of three years, and to pay said second party the sum of $1,800 per annum, payable monthly, and also to pay said second party 5 per cent. of the first $20,000 of the profits of his butter, cheese, and creamery business, and also 10 per cent. of the next $10,000.00 of the profits of his business, and 20 per cent. on all profits in excess of $30,000.00 per annum, payable annually. Said second party agrees to give his time and services to the best of his abilities to the interest of the business under the direction of said first party. It is further mutually agreed by and between the parties hereto that said first party can, at his option, terminate this contract at any time. If this agreement should at any time be terminated by the said first party, he shall pay as damages for such termination $150 at the time of such termination, and shall pay said second party his percentage of the profits of said business for the term of six months after such termination of this agreement. [Signed] O. Sands. C. H. Potter. Witness: E. D. Sullivan.’ Appellee at once entered the employment of appellant under this contract, and continued for the designated period of three years to do such work as he was directed. He attended to the purchase and sale of butter, and to watching the market on the board of trade of the city of Elgin, at times manipulating the market so as to raise the price of butter artificially. He bought and sold butter otherwise than on said board; sold cheese; made various trips East, and on the road effecting sales of butter and cheese and building up a trade; carried on correspondence in furtherance of the same objects; assisted in making purchase of additional creameries; and did other work when required. He had nothing to do with operating the creameries, or manufacturing butter or cheese. During the three years of the employment of appellee the business of appellant was much more successful than it had been previously. The profits of the business for said three years were as follows: For 1891, $35,841.59; for 1892, $47,883.39; and for 1893, $52,490.76. The transactions of the three years aggregated $600,000 for the first year, $800,000 for the second year, and $850,000 for the third year. At the end of the three years appellee left the employment of appellant, and shortly thereafter brought this suit to recover the moneys that he claimed still to be due him. The results of a jury trial in the Kane circuit court were a verdict and a judgment for $14,000 damages in favor of appellee; and the judgment was afterwards affirmed in the appellate court of the Second district.

The principal ground of defense relied on at the trial was that the contract of January 30, 1891, was void, because entered into by appellant while he was insane, or without mental capacity sufficient to make a valid contract. The fact that appellant at that time had sufficient mental capacity to execute the contract is conclusively established by the verdict of the jury and the judgments of the courts below. A contention, however, is made that the verdict was induced by erroneous instructions of the trial court given in that behalf at the instance of the court below. One of them told the jury that, to impeach the written contract for want of mental capacity, it must be shown by a preponderance of evidence that ‘the defendant, at the time he executed it, had such a degree of mental weakness that he was incapable of understanding what he was doing, and unable to comprehend and understand the terms and effect of the contract, or that the same was procured by some undue influence.’ Another of them read as follows: ‘The jury are further instructed that, although they may believe from the evidence that either before, at the time, or after the making of the written contract in question the defendant had insane delusions on some subjects, yet, if the jury further believe from the evidence that such delusion was in no way related to the plaintiff or the subject-matter of the contract here in question, and that in making such contract defendant was in no means influenced thereby, but that in making of said contract he possessed mind, memory, and senses sufficient to know and comprehend the scope, force, and effect of that contract, then he was mentally capable of making said contract, and the jury should so find.’ The criticism made upon these instructions is that they did not explicitly state that the defendant must have had ‘sufficient mental capacity to protect his own interests in executing the contract.’ We are not aware that there is any fixed formula of words in which the mental capacity or incapacity of a person to make a contract must be expressed. It is true that in the case of Lindsey v. Lindsey, 50 Ill. 79, in passing upon the question of the mental imbecility that would invalidate a contract, this court said that, ‘in the absence of undue influence, there must be such a degree of mental weakness as renders a party incapable of understanding and protecting his own interests'; and that like language is used in some subsequent cases. But in the Lindsey Case it is also said that the contract cannot be impeached ‘if the contracting party still retains a full comprehension of the meaning, design, and effect of his acts.’ In Miller v. Craig, 36 Ill. 109, it is said that mere mental weakness will not authorize a court to set aside a contract, if such weakness does not amount to inability to comprehend the contract, and is unaccompanied by evidence of imposition or undue influence; and that such is the tenor of all the authorities. Like language is used in Willemin v. Dunn, 93 Ill. 511. In Kimball v. Cuddy, 117 Ill. 213, 7 N. E. 589, the words, ‘a full comprehension of the meaning, design, and effect of his acts,’ are used as designating the degree of mental capacity existing where the contract is valid. And the expression, ‘such mental weakness as renders the maker of the deed incapable of understanding and protecting his own interest,’ is used in designating the degree of incapacity required to render the contract invalid. It is difficult to apprehend how one can ‘comprehend and understand the terms and effect of the contract,’ or in making it possess ‘mind, memory, and senses sufficient to know and comprehend its scope, force, and effect,’ without being ‘mentally competent to protect his own interests.’ This latter phraseology is used in several of the instructions given at the instance of appellant. The legal principle involved in the case is embodied in each set of the instructions, as well those given on motion of appellee as those given on motion of appellant, and the jury had the benefit of the rule of the law expressed in both forms of phraseology. It was not error to give the instructions asked by appellee.

It is urged it was error to refuse to instruct the jury that, if the defendant was mentally incompetent to protect his own interests in making the contract, then, although they may believe he understood the same, yet they should find he was not mentally competent, and that the contract was invalid. The terms of the instruction are contradictory; and it was likely to mislead the jury by inducing them to believe that, although the defendantfully understood the contract, yet that if he did not have sufficient mental acumen to foresee that his business would so increase as that the per cent. of the profits agreed to be paid for appellee's services would amount to the large sum it did, and provide against such contingency, then they should find against the validity of the contract. There was no error in refusing it.

It is claimed that, if the contract was valid in its inception, yet it was terminated in August, 1891, by appellant exercising the option for which provision was made therein. No contention is made that the rulings upon the instructions relating to the annulment of the contract by the act of the appellant were erroneous. The testimony was conflicting upon the question whether appellant ever attempted to exercise the option given him; and the alleged fact of its exercise is conclusively negatived by the judgments we are called upon to review.

In December, 1892, appellant was adjudged insane, and was taken to the asylum in Elgin. His wife was appointed conservator. In January, 1894, it was adjudged that he was restored to his reason, and the conservator was discharged. The court refused the motion of appellant to instruct the jury that the insanity of the principal terminates an agency, and that, if they found from the evidence that the defendant became insane after the making of the contract in controversy, they should find that such contract was then terminated. This refusal is claimed as error, and reliance is placed on Mechem, Ag. §§ 553, 554, and other authorities, which hold that the after-occurring insanity of the principal operates as a revocation or suspension of the authority of an agent exercising a bare power of...