Stephens v. Ozbourne

• Decision Date: 19 October 1901
• Citation: 64 S.W. 902
• Parties: STEPHENS v. OZBOURNE et al.
• Court: Tennessee Supreme Court

Page 902

64 S.W. 902

STEPHENS v. OZBOURNE et al.

Supreme Court of Tennessee.

October 19, 1901.

Appeal from chancery court, Knox county; Jos. W. Sneed, Chancellor.

Bill by George Stephens against Peter Ozbourne and others. From a decree of the court of chancery appeals affirming a decree for plaintiff, defendants appeal. Affirmed.

Sansom, Welcker & Parker, for appellants. Frantz & Wright and McCroskey & Peace, for appellee.

CALDWELL, J.

The bill in this cause was brought to annul and cancel a deed for fraud in procuring it. The chancellor granted the relief sought, and the court of chancery appeals affirmed his decree. The complainant, George Stephens, an ignorant old negro man, residing in the state of Georgia, executed the deed in question to the principal defendant, Mrs. M. M. Ozbourne, an intelligent white woman of Knoxville, Tenn., and thereby he conveyed to her, for the consideration of $5, a piece of real estate in Knoxville worth $1,000. The transaction, on the part of the vendee, was conducted by her agent, who, knowing the value of the property, its former ownership, and facts strongly indicating present ownership in the vendor, visited him in Georgia, and brought the question of ownership and of sale to his attention simultaneously and for the first time, and thereupon, after confirmation in his own mind as to the identity of the true owner, the agent, upon the statement that the property was "worth some money if the right parties could be found," and without further disclosure, induced the old darkey, who had no other information on the question of value or ownership, then and there to execute the deed as the "only living heir" of his father, who the agent knew really owned the lot at the time of his death many years before. This condensed narration of the elaborate finding of facts by the court of chancery appeals discloses two obvious reasons for the cancellation of the deed: First, such gross inadequacy of price as to shock the conscience and establish fraud; and, second, such suppressive and misleading conduct on the part of the vendee's agent as, under the circumstances, was fraudulent in itself; and when the two things are combined the fraud becomes absolutely overwhelming. It is everywhere agreed that simple inadequacy of consideration, — a mere undervaluation, — without more, raises no presumption of fraud, nor affords any reason for the avoidance of the contract by rescission, cancellation, or otherwise; but when the disparity between the true value of the thing sold and the price paid or to be paid reaches the extremity just indicated, or when the situations of the contracting parties are, for any reason, so unequal as to give one a great advantage, which, through nondisclosure and deception, he makes available to the detriment of the other, or when even a less difference as to consideration and less inequality in environments conspire together in producing a hard bargain, a court of equity will be prompt to give the fullest measure of relief on the ground of fraud. After saying that inadequacy of consideration is not, of itself, a distinct doctrine of relief in equity, Judge Story continues: "Still, however, there may be such an unconscionableness or inadequacy in a bargain as to demonstrate some gross imposition, or some undue influence; and in such cases courts of equity ought to interfere upon the satisfactory ground of fraud. But then such unconscionableness or such inadequacy should be made out as would (to use an expressive phrase) shock the conscience, and amount in itself to conclusive and decisive evidence of fraud. And where there are other ingredients in the case of a suspicious nature, or peculiar relations between the parties, gross inadequacy of price must necessarily furnish the most vehement...