Walsh v. Shoulders, 11092

• Decision Date: 05 April 1973
• Docket Number: No. 11092,11092
• Citation: 87 S.D. 270,206 N.W.2d 60
• Parties: Helen A. WALSH, Plaintiff and Appellant, v. Marvin SHOULDERS et al., Defendants and Respondents.
• Court: South Dakota Supreme Court

Page 60

206 N.W.2d 60

87 S.D. 270

Helen A. WALSH, Plaintiff and Appellant, v. Marvin SHOULDERS et al., Defendants and Respondents.

No. 11092.

Supreme Court of South Dakota.

Argued Nov. 29, 1972.

Decided April 5, 1973.

Hobart H. Gates, Custer City, Allen G. Wilson, Hot Springs, for plaintiff and appellant.

Robert W. Gunderson of Gunderson, Farrar, Aldrich, Warder & DeMersseman, Rapid City, for respondents, Engene A. Erickson, Ellva M. Erickson and Southern Hills Bank, a corporation.

BIEGELMEIER, Chief Justice.

On the afternoon or evening of January 14, 1969, Helen Walsh, a spinster over 75 years of age who lived alone, was the owner of more than 200 acres of land (on which she had lived for most of her lifetime) worth over $50,000 and personal property worth $8,000, all free of debt or encumbrances. The next morning, if defendant Shoulders (whom she had known a relatively short time) and Banker Erickson (whom she had never seen before that date) are to prevail in this action, the real estate was gone (deeded to Shoulders and his wife), the personal property mortgaged to a bank for a loan of $3,000 paid to her in 150 twenty dollar bills which disappeared and she was without a home or funds to support her declining years.

As Shoulders then owed the bank about $23,000, which was due the previous November, three days later the bank took a mortgage for $38,000 on 160 acres of Helen's former land, and the same day the banker and his wife had a mortgage, which was soon thereafter followed by a deed to them, from Shoulders and his wife on the rest of Helen's former land.

Those are the bare, undisputed outlines of this action. While some further evidence will be adverted to, it will only paint the picture in greater detail--not change it. For easy identification, the opinion will at times refer to plaintiff as Helen, defendant Marvin Shoulders as Shoulders, and defendant Erickson and his Southern Hills Bank as Banker and Bank respectively.

The trial court held the deed from Helen to Shoulders and his wife was voidable, and, so far as they were concerned, it was rescinded and the title to the 160 acres was vested in Helen, subject to the $38,000 mortgage. It also held the banker and his wife were owners in fee of the 50-acre tract. We affirm in part and reverse in part the judgment and remand it as hereafter indicated.

The 160-acre tract was homesteaded by Helen's father, and Helen became the owner in 1930; she homesteaded the 50-acre tract, receiving a patent for it in 1919. It was four miles from Custer, South Dakota, where she lived alone and engaged in a modest way in raising and grazing cattle.

Shoulders operated a Rodeo Shop in Custer with cattle, saddle horses, saddles and equipment incidental to keeping a stable. Helen knew of Shoulders in the store in Custer, but had no dealings with him until the latter part of 1968 when, according to his testimony, he fed the cattle, fixed fences, etc. voluntarily without Helen asking him to do it in November of that year. In December 1968 and at some times thereafter to early 1969, again without any request from Helen, Shoulders cut wood, took her to doctors, took her groceries and brought feed for her animals. He later testified he had borrowed $650 from Helen in November 1968, had never repaid her in cash, but by buying feed, 'feeding the cattle and whatnot.'

During the two months immediately involved, Helen became ill and spent much of December 1968 in a Custer hospital where Shoulders brought her a Christmas bouquet and another present. At that time Shoulders' wife was also in the same hospital, across the hall from Helen. On Helen's release in early January 1969 she went to Shoulders' home about a mile and a half from Custer. Shoulders told Helen the finance company had taken their car and she was asked to mortgage her cattle to the Southern Hills Bank, obtain a loan and give him the money.

On January 10, 1969, Shoulders took Helen to the Southern Hills Bank in Edgemont. He testified ¹ the purpose of the trip was for Helen to make a loan. Why Helen, who lived four miles from Custer and had done business with a bank there for at least 24 years, would be driven 40 miles away to Edgemont to make a loan from a bank she had never dealt with, whose officers she did not know and who did not know her has a bearing on what was soon to happen. Helen signed an application for a loan of $3,000 and changed her account from the Custer bank to the Edgemont bank. Defendant Erickson was not then at the bank.

On January 14, 1969, defendant Erickson, the President and part, if not the substantial, owner of the Edgement bank, came to Shoulders' home where Helen saw him for the first time. There is inexactness and some difference of testimony as to the exact hours Erickson was there, but it is undisputed he made two trips--one in the afternoon and one in the evening. Some of the testimony is that on the first trip (in the afternoon) he checked the cattle to be included in the mortgage and after Helen signed the $3,000 note and mortgage and asked for cash he drove back to Edgemont and returned in the evening with the $3,000 in twenty dollar bills, which he counted out on a table, and that night the contested deed was signed. Other testimony is that the deed was signed on the first trip at an earlier hour. However that may be, the banker's testimony was that after the note and security agreement, as they are now referred to, were signed Helen said she wanted the $3,000 in cash. He said he would bring it to her later. This was followed by a discussion about drawing a deed transferring all her land to Shoulders and his wife. After suggesting that Helen have a lawyer draw the deed, and her stating that she did not want that and he could do it, the banker agreed to do so and produced a deed from his briefcase, drew the deed and Helen signed it.

Both Shoulders and the banker testified they had warned Helen that the deed would make Marvin and Norma Shoulders owners of the property and that they would possibly have to mortgage it. Neither Shoulders nor the banker mentioned that Shoulders was in debt for $23,000 secured by a mortgage to the bank of which Erickson was president.

Helen testified the Banker's second visit was at night, she had been in bed, was very ill with flu and she did not read the papers she signed and did not understand the transaction. The banker admitted he did not read the deed to her and that he was there between 9 and 10 o'clock the night of January 14th when he left the $3,000 ² cash on the table.

The next day Shoulders asked a doctor if he would care for Helen at the hospital, and on January 16, 1969, Shoulders took her to the Hot Springs hospital where she was admitted.

Shoulders' testimony was that the cash transfer and signing of the deed occurred at night around 9 or 9:30, though Erickson said the deed was signed on his first visit that day and he brought the cash that night. Helen said Shoulders took the $3,000; ³ he said she put it in her purse. When she was admitted to the hospital on the 16th Helen's purse contained only one ten dollar bill and eight one dollar bills.

The Hot Springs hospital record prepared by her attending physician showed Helen was very confused, unable to tell her age within 10 years, and her illness from Christmas 1968 to date of admission was such that she was so acutely ill, weak and incapable of self-care that she was taken to Shoulders' home where she was cared for for a few days, but that Shoulders and his wife were incapable of giving further care and 'shouldn't be required to administer care to this woman because they have no responsibility' for her.

After describing her illness, weakness and confusion, the attending physician testified that on January 16th Helen demonstrated signs of senile arteriosclerotic or chronic brain syndrome and her illness made her to a degree incapable of understanding many things; that it was difficult for her to understand anything involving a business transaction; that there was some mental impairment, and there was a reasonable doubt that she would be capable of anything very intricate a few days before the 16th. Helen's testimony at the trial showed that this confusion or mental impairment existed to some degree.

When Helen was discharged on January 21st, it was her doctor's plan that she go to a nursing home or rest home for the balance of the winter, but she only stayed there about two weeks.

Both Shoulders and banker Erickson told of the conversations that accompanied the deed transaction. The banker testified he told Helen that he would 'hold it a few days, and if she had a change of mind, she knew my name was in the phone book and the bank number is in the phone book.' As to this Shoulders testified: 'Mr. Erickson * * * told her * * * he was going to hold it for a week or so for her to make up her mind'.

Shoulders testified:

'A * * * she wanted us to have the property. We had been nice. She was staying at our place. We had done everyting we could to help her * * * she was told repeatedly that she would be living here for the rest of her life. * * * our agreement was--yet it wasn't an agreement--it was just understood--we were going to continue to take care of her and look after her (another reference to this agreement as to Erickson appears later). * * *

Q Did you give Helen A. Walsh any actual money for the transfer of the title to her property?

A I did not. My wife did.

Q What amount did your wife give to her?

A Two $5,00 bills.' ⁴

On this subject a feed dealer testified he told Shoulders: "I heard you bought Hellen's place" and Shoulders answered: "Yes, I suppose I'll have to take care of her the rest of her life." Another witness, a Shoulders' ranch hand, testified that in February 1969 Shoulders told him he had just bought the place, that he was going to have Helen put in a nursing home as "(t)hat old woman is crazy" and "(d)on't let that old woman out of...