Johnson v. Studley

The administratrix of the estate of Ola Bent-son, deceased, the plaintiff, brought this action to have set aside and canceled a certain written contract, by the terms of which the deceased executed and delivered to defendants a

The cause was tried by the court, sitting without a jury, and judgment for the full relief prayed for was awarded plaintiff.

The defendants appeal from the judgment upon a record prepared in accord with the so-called alternative method.

The following is the agreement:

“This Agreement, made and entered into this twentieth day of February, 1923, by and between F. D. Studley and Ola Bentson.

“Witnesseth that the said Ola Bentson, on his part and for valuable consideration herein as mentioned, does agree to give clear deed to the following described real estate:

“House and three lots, described as lots 17-18-19. Frames resubdivision of block 27 original townsite of Elsinore.

“He also agrees to make a proper assignment of a note and mortgage for three thousand dollars ($3,000) which said note and mortgage is dated April 1st, 1919, and due in five years with interest at six per cent; said note and mortgage are executed by Thomas O. and May R Boothby; and one note of said F. D. Studley in favor of Ola Bentson for three hundred dollars ($300) and assignment of mortgage and deeds are hereby acknowledged by said F. D. Studley and for the above and other valuable considerations which partly consists of six bonds of the Nevada California Electric Company for one hundred dollars ($100) each, total six hundred dollars ($600) receipt of which is also acknowledged for the above considerations. The said F. D. Studley agrees on his part that he will care for and provide a good and confortable home in the town of Elsinore for the said Ola Bentson and that he will- care for him in sickness and in health in a good and proper manner, paying all expenses of living, clothing, doctor’s bills and any other expenses that might be necessary for the comfortable care and protection for the said Ola Bentson so long as he may live and give him a reasonably fair burial at the time of his death, at his own proper cost and expense and these transfers assignments, etc., of the deeds and bonds and notes shall also pay the said F. D.

Studley for all past services that he has already rendered to the said Ola Bentson. It is understood that all interest and rent accruing from the above property is to belong to Mr. Bentson during Ms Ufe for his own personal use.

“Given under our hands and seals the day first above written.

“F. D. Studley “Ola Bentson

“Witness to the signatures of the said F. D. Studley and Ola Bentson.

“R. J. Horton “G. R. Gough”

On the day of the execution of said agreement (February 20, 1923), the deceased executed and delivered a deed, duly acknowledged, quitclaiming to the defendants lots 17, 18 and 19 in “Frames resubdivision of the original townsite of Elsinore.” This deed was filed for record and recorded in the office of the county recorder of Riverside County on the second day of April, 1923.

On the same day the deceased in writing assigned to the defendants a certain mortgage executed by Thomas 0. Boothby and his wife on certain real property situated in Riverside County and given to secure a promissory note for the sum of $4,000. This mortgage was executed on April 1, 1919, and the note to secure which it was given was made payable five years from date. At the same time the deceased canceled a promissory note for the sum of $300, executed and delivered by the defendants to deceased.

The complaint charges that the above-mentioned documents were procured from the deceased by the defendants through fraud and the exercise of undue influence. It is alleged, among other things, that at the time of the execution of said instruments the deceased was afflicted with Bright's disease of the kidneys and “so weakened mentally and physically thereby that his death could be expected within a few weeks or months and which did actually take effect shortly thereafter and that under such conditions his will and mind were easily susceptible to the undue influence of the will and mind of said defendants”; that said deceased was under the exclusive care, charge, and control of said defendants, and that by reason of his “extreme old age,” his mental and physical weakness and infirmity, due to the disease men

The answer admits the execution of the agreement, the deed, and the assignments, but specifically denies that the same were procured by fraud or undue influence on the part of the defendants. The finding just referred to reads as follows:

“With respect to the allegations contained in Paragraph Number XIII of plaintiff’s Complaint, the Court finds: That at all the time immediately preceding the making and execution of said purported contract and said purported deed, the said Ola Bentson, had a home and house of his own sufficiently furnished to keep him in the station and condition of life that he then had been previously enjoying, and sufficient money and financial means to pay these defendants herein for any services in taking care of and nursing him, and for any food and clothing furnished by them or necessary for his then immediate care and comfort, and to pay these defendants well for such services and for the furnishing of any food and clothing necessary for the then immediate care and comfort of himself; that said Ola Bentson during all of such time was fully cognizant of his ability to so financially pay and otherwise provide himself with such care, comfort and food and clothing as aforesaid, and having knowledge of his financial ability to so pay for such services, care, food and clothing as aforesaid, did then and there, and on many divers occasions previous thereto, offer and propose to said defendant F. D. Studley, that if he, said F. D. Studley and wife, would so take care of and nurse him, and provide him him with the necessary food and clothing, he, Ola Bentson, would pay them, and pay them well for it, and for him, Studley, to name the price; but, said F. D. Studley and wife having as hereinbefore found in these findings conceived the plan of obtaining title and possession to the whole of the valuable real and personal property of said Ola Bentson, and knowing that to accept said Ola Bentson’s offer and proposal as

aforesaid would prevent the consummation of their said plan, did then and there, and on many diverse occasions previous thereto, refuse and decline said offer and proposal, and did then and there, with the intent and purpose of carrying out said consummation of said preconceived plan as herein-before found in these findings, and having then the opportunity to take advantage of the fact that said Ola Bentson was under their exclusive care, charge and control and of his old age, fatal illness, mental weakness, distress and necessities as hereinbefore in these findings found, and having, then and there and therefore sought and gained legal advice and counsel for themselves, and sought and gained the advice and counsel of the physicians then in attendance upon said Ola Bentson as to the probable length and duration of his life, and having, then and there, and on diverse occasions previous thereto, sought and had a Notary Public come to their home for the purpose of drawing, preparing and acknowledging said purported contract and said purported deed, the said defendant, F. D. Studley, did then and there, and at the time of the making and execution of said purported contract and said purported deed prevail upon and importune the said Ola Bentson, to make and execute said contract and said deed against his will and without his consent, and said Ola Bentson was caused to so do by the previous threats, coercion and undue influence of said F. D. Studley and to the continuance thereof at the very time he made said purported contract and said purported deed used to and upon him by said Studley who did then and there, state and threaten that, unless he, said Ola Bentson, so made and executed said purported contract and said purported deed, that he, Studley and wife would immediately cease taking care of him, nursing and providing him with food and clothing, and said Ola Bentson thus put in fear that said defendant Studley would carry out said threats as aforesaid and he and his wife would desert and abandon him, and no longer administer to his immediate wants and necessities, and sick and unable to move or walk about unless assisted, and in such distress of body and mind as herein-before alleged and as in these findings found, and under the exclusive care, charge and control of said defendants and no immediate opportunity available to him to seek or hire others to perform such services for him, submitted tó said threats, coercion and undue influence of said defendant

Studley as aforesaid, and did make and execute said purported contract and said purported deed, which said contract and said deed so made and executed as aforesaid, was and were so made wholly without adequate or any consideration whatsoever, and the act of making said purported contract, and the act of making said purported deed, was, and were not the free and voluntary act or acts or deed or deeds of said Ola Bentson, but was and were the result and consummation of the acts and deeds of said defendant, F. D. Studley, and his said undue influence exercised by him to and upon the will and mind of said Ola Bentson, who then on account of his mental weakness, old age, infirmity, sickness, distress and necessities as aforesaid, and of his then relation and association with said defendants, was unable to resist the desires and importunities of the dominant mind and will of said defendant, F. D. Studley.”

The court also found that the property, real and personal, turned over to the defendants by the deceased as indicated above was of no greater value than $12,000.

The contention of the defendants is that the findings as to fraud and undue influence and the foregoing finding are wholly without any support from the evidence. We think the contention must be sustained.

The facts as we shall state them are gleaned from the uncontradicted testimony in the case. The plaintiff’s intestate, at the time of the execution of the transactions sought to be annulled by this action, resided in the town of Elsinore, in Riverside County, and was of the age of seventy-nine years. He was an unmarried man. It is not made to appear, except in a general and indefinite way, that he had any relatives in Elsinore or elsewhere. The petition by the plaintiff for letters of administration of the estate of the deceased or the other proceedings in connection therewith are not in the record, and we are hence without information as to the relationship, if any, of the plaintiff to the deceased.

The plaintiff’s intestate, who hereinafter, for brevity, will be referred to as “the deceased,” or “Bentson,” and the defendants were near, neighbors in the town of Elsinore for about four years prior to the date of the execution of the contract and other instruments above mentioned, their respective homes being separated by a small lot. The deceased owned several lots in Elsinore—those named in the

In the latter part of the year 1922 the health of the deceased began to fail. In November of that year, realizing the necessity for medical aid, he called in Dr. Parker, a local physician, who diagnosed and pronounced his physical ailment as that of Bright’s disease of the kidneys. Down to that time the deceased, as thus he had done for the whole of the period of four years during which Studleys were his neighbors, as indicated, did his own cooking and in other respects attended to his household affairs. On one of his professional visits to the deceased in the month of November or December, 1922, Dr. Parker advised Bentson that his food, as he (Bentson) prepared it, was without sufficient nourishment, and that in his condition he should have some capable person to prepare his meals and take care of him generally.

In the month of November, 1922, one James H. Mills, with whom the deceased had been acquainted for about eight years, was employed by the latter to construct a cement walk around his three lots described in the deed from deceased to the Studleys. After starting the work of building the walks, Mills, on one occasion, found the deceased “in bed sick.” The deceased then said to Mills that “he would like to have me hunt up someone that would look after him. So I took him up some broth a couple of nights,” Mills proceeded to testify, “and I went down and saw "Mr. Studley, and they agreed to look after him.” F.

Kuhns the following day was again called to the Bentson home for the purpose of preparing an agreement. He stated that the deceased said, “We haven’t gotten along any further than we were last night. We haven’t come to a decision yet.”

An agreement was finally reached between the deceased and P. D. Studley, whereby the deceased agreed to convey to the Studleys all his estate upon condition that they would provide for and take care of him during the balance of his life. Bentson thereupon (in the first part of January, 1923), and in pursuance of the said agreement, walked over to the home of the Studleys and there remained and was there taken care of by the defendants' until he passed away on the tenth day of May, 1923.

R. J. Horton, president of the First National Bank of Elsinore, with which the deceased had always transacted his banking business, had on several occasions been present, both at the home of the deceased and the home of the Stud

Before the agreement, • the deed and the assignments were signed by the deceased, Horton held a conversation with Bent-son relative to the proposed transactions. “I told Mr. Bent-son,” Horton testified, “as plainly as I could just exactly what he was signing; that he was signing away til his property, and I told him he didn’t want to do that without careful consideration.” Bentson stated to Horton that he

G. R. Gough corroborated the testimony of Horton as to the conversation between the last named and the deceased on the occasion just adverted to and as to the warning Horton gave Bentson relative to the effect of the execution by the latter of the agreement, deed, etc.

At the time of the execution of the above-mentioned instruments the deceased had on deposit in the bank of which Horton was president approximately the sum of $500. He also then had in his safe deposit box in said bank Liberty bonds amounting to $900, Nevada-California Electric bonds of the value of $600 and the note and mortgage of Boothby, originally for $4000; but subsequently reduced by payments on the principal. These securities were convertd into cash through Horton’s bank and the proceeds credited to the deposit account of the deceased. At the time the contract and other instruments were signed, Bentson instructed Horton to make a change in his account in the bank so that the Studleys, as well as himself, could draw on the account in his lifetime and “to make it so as to create a joint tenancy” in the account, to the end that “Mr. Stud

“For Checking o/o of

Ola Bentson. Term Account No.............

“First National Bank of Elsinore.

“Elsinore, Cal.

“Find below duly authorized signature which you will please recognize in payment of funds or the transaction of other business on my, or our account:

“Ola Bentson “F. D. Studley “Estelle T. Studley

“Sign here.

“Address.......... Introduced by............”

The instructions were not strictly followed by Horton, but, as to this, he testified that the card on which the instructions were written “was the only signature card we had. We were out of regular joint tenancy cards at the time.” He stated that he did not at the time or at any other time tell Bentson that he had not made it appear in the records or books of the bank that the account was a joint tenancy account, but that he, as well as the deceased and Studley, treated it as such in accord with the specific instruction of Bentson to that effect. Prior to and subsequent to the death of Bentson the Studleys checked on the account, appropriating much if not all the money to the payment of the expenses incurred in taking care of the deceased, and upon his death in payment of funeral expenses. These considerations, however, are of no special consequence in the decision of this ease. The sole questions here are, as has been shown, whether the defendants procured the transfer of the property of the deceased, including the money in the bank and the securities referred to, through misrepresentations or fraud or the exercise of undue influence upon the deceased on .the part of the Studleys, or either of them, and whether the deceased was mentally incompetent to transact ■ the business. If under such circumstances the execution of the agreement and the transfer of the property of the deceased were accomplished the plaintiff would be entitled to recover all the property so transferred, regardless of the form in which the

It should here be stated that Dr. Parker, who, as seen, professionally attended and prescribed treatment for the deceased, testified that he advised F. D. Studley, while the latter was waiting on Bentson at his (Bentson’s) home as to the physical condition of the deceased “and what to expect. ... I told them (the Studleys) that he (deceased) had chronic Bright’s disease and could not get well; that he might live a few months or a few years. It was an uncertain condition.” In this connection it may also be stated that P. D. Studley testified that he did not understand Dr. Parker to say the deceased “might live a few months or a few years,” but understood the doctor to say that he might live for years. However, it is clear from Studley’s testimony that he knew and realized that the deceased, at the time the transactions involved herein were under negotiation, was a very sick man and the disease from which he was suffering would probably sooner or later result in his death.

[1] The foregoing embraces a statement in substance of all the testimony revealing the circumstances attending and eventuating in the execution of the agreement and the other written instruments in question. It is perfectly clear therefrom that the testimony does not justify the conclusion that the defendants practiced deceit or resorted to misrepresentation or other fraudulent conduct to induce the execution by the deceased of the agreement and other papers. Indeed, the court below, in its decision, recognized this proposition, since it made no specific finding that the transactions were brought about through fraudulent representations or conduct on the part of the defendants. The fraud in thg transaction, if any, is to be implied from the findings that the defendants, taking advantage of the physical and mental condition of the deceased, by threats, coerced the latter into the execution of the agreements, etc., and that, by reason of his advanced age and serious physical illness, the deceased, at the time the transactions were in process of negotiation and finally consummated, was mentally incapable of exercising volition or intelligently transacting business. [2] The finding, however, that the defendants by threats coerced the

[3, 4] The trial court, in its decision, as do counsel for the respondent in their brief, stresses the proposition that the deceased, in carrying out the transactions, was without independent advice as to the nature and consequences to him of the proposed agreement. The undisputed evidence shows, as has been pointed out above, that Mr. Horton, president of the bank with which the deceased had for many years deposited his money, explicitly explained to the deceased, before the agreement was consummated and prior to its being reduced to writing, that the effect of the agreement, if executed by him, would be to transfer his entire estate to the defendants, and advised him to consider the proposition well before accepting it. If, therefore, this were a case where the relation of the parties was of a fiduciary or confidential character, the advice or caution thus given deceased by Mr. Horton, in whom we may assume the deceased had full confidence, since he had extensive dealings with him as a banker, would entirely measure up -to the rule as to independent advice in such cases. The situation here, however, is not one to which the rule of independent advice is applicable. There was not, prior to the making of the agreement, a fiduciary or other confidential relation existing between the deceased and the defendants. (See Robins v. Hope, 57 Cal. 493 , 497; Hemenway v. Abbott, 8 Cal. App. 450 , 463 [ 97 Pac. 190 ]; 1 Story’s Equity Jurisprudence, sec. 218; Scattergood v. Kirk, 192 Pa. 263 [ 43 Atl. 1030 , 1032].) They were friends, it is true, and had been for several years, and no doubt the deceased had confidence in the integrity of the Studleys and believed that they, above all others with whom he was acquainted, would give him that care- and attention ■which his physical condition demanded. This, however, did not constitute a confidential relation within the meaning of that doctrine as it is known to the law. The entire transaction, from its inception to its consummation involved a matter of contract only—no different in its general nature or the circumstances under which it was made from any other contract whereby one party agrees to perform certain

[5] The foregoing observations have proceeded upon the assumption that the deceased was mentally capable of transacting the business involving the transactions in controversy. But, as has been shown, the theory of the plaintiff, as is that of the decision below, is that, when the transactions in question were under consideration and finally executed, the mind of the deceased had become so impaired or weakened from the disease with which he was afflicted that he was mentally incapable of fully appreciating the seriousness of said transactions or their effect upon his property rights; or, in other words (and this is as far as the findings really go), that his weakened and mental condition rendered him easily and readily susceptible to pressure or the exercise upon him in the transactions of sinister influence by those in whom he had a high degree of confidence ; that defendants, knowing of -his impaired mental condition, took advantage thereof and, as to the deceased, thus succeeded in bringing about an unfair or unreasonable bargain. As we have already stated, however, there is no evidence in the record which warrants any such eonclusion. To the contrary, the uncontradicted evidence clearly shows that during all the times that the transactions were under discussion between the deceased and F. D. Studley and at the time that they were executed, Bentson was mentally sound and fully realized and appreciated the nature of the transactions and the effect thereof, so far as they affected him. Some five or six witnesses testified that they were acquainted with the deceased in his lifetime, met him before and after he went to the Studley home, conversed with him and from their acquaintance with him and the character of the conversations held with him they were of the opinion that there was nothing the matter with his mentality; that he carried on his conversations intelligently and seemed to understand everything that was said to him, and was able to discuss the subjects to which the conversations related understandingly. We will not undertake to state herein in detail all this testimony, although some of it may be briefly referred to. Henry S. Drake and his wife met the

There were several other witnesses who knew and had met and tallted with the deceased prior and subsequent to the date of the execution of the transactions in dispute and who testified that they were of the opinion that the deceased was mentally sound and capable of carrying on business in an intelligent way during the period of time covered by the negotiations and the consummation of said transactions.

But, it seems to us, more convincing evidence of the mental competency of the deceased and his ability to take good care of his own interests in the transactions could hardly be thought of than the fact that he deliberated and “bargained” several days before he came to the terms of the Studleys and finally signed the agreement and the other papers, and refused or, rather, as the witness Horton expressed it, “showed reluctance,” to sign the papers until there was inserted in the agreement upon his suggestion and insistence a provision to the effect that he was to receive the rents, issues, and profits derived from his estate during his lifetime, and that when Horton inserted a provision in the agreement to that effect, the mind of Bentson appeared to be at “ease.” Manifestly, a man of weak mind or who was unable, by reason of a debilitated mind, to protect well his own interests or to express his real wish or intention in a transaction of such importance, would not have carried on the affairs involved herein with the degree of deliberation exhibited by the deceasd therein.

[6] An investigation of the record will force the conclusion that the court below planted its decision entirely upon these propositions, to wit: That, by reason of the fact that, at the times the transactions in question were under negotiation and ultimately completed as indicated, the age and serious illness of the deceased had so broken down or impaired his mentality that he was, at said times, mentally incapable of transacting business understandingly or with the ability to fully appreciate the nature thereof and its consequences to him, or at least easily influenced. That the Studleys had the confidence of the deceased and could, therefor,

[8] The matter of the consideration for a grant or the assignment of property is, in conceivable cases, of controlling importance, particularly where the consideration appears to be grossly inadequate. This declaration has peculiar application to suits in equity for the enforcement of executory agreements for the sale of real property. But in such cases, as in actions like the one .before us, “the sufficiency of the purported or claimed consideration for a contract of the character under discussion (practically for the specific enforcement of an agreement to convey to plaintiff certain property) must be determined from the facts of the transaction as they existed when the contract was made, rather than by subsequent developments. ’ ’ (Parsons v. Cashman, 23 Cal. App. 298 , 302 [ 137 Pac. 1109 , 1111].) [9] Applying that rule to the facts of the instant case, it is clear that the consideration for the conveyances moving from defendants to Bentson cannot justly be declared to be so inadequate as to constitute it a sufficient ground for vitiating the conveyances, or, of itself, or when considered in connection with the facts of Bentson’s advanced age and' serious illness, to be regarded (in view of the uncontradicted evidence disclosing all the circumstances leading to and attending the consummation of the transactions) as of sufficient probative significance to justify the conclusion that the agreement and the instruments thereupon following were procured to be executed by the deceased through fraud or the exercise of undue influence, or that deceased, when signing the instruments, was mentally incompetent to transact the business intelligently and freely. F. D. Studley, as we have seen, was a carpenter by trade, capable of earning eight dollars per day when engaged in work at the trade, and at the time the transactions herein involved occurred had open to him employment at said trade. The doctor attending the deceased, while stating to said Studley that Bentson was suffering from an incurable disease—a disease which would cause his death— also in effect stated to him (F. D. Studley) that the nature of the disease was such that Bentson might live a few months only or he might linger for years. Under those circumstances, the Studleys could not know or determine how long they would be required to devote themselves to the care of

We think, as the foregoing discussion indicates, that the decision of the trial court is without evidentiary support. The judgment is reversed.

Plummer, J., and Finch, P. J., concurred.

A petition by respondent to have the cause heard in the supreme court, after judgment in the district court of appeal, was denied by the supreme court on February 28, 1927.