Beeson v. . Smith

HoKe, J., after stating the case: The authorities of this State are to the effect, that the deeds and contracts of insane persons, certainly when there is no formal adjudication of their insanity in force at the time, are voidable, and not necessarily void; and the same is true of deeds procured by undue influence or fraud in the treaty or bargain. In actions brought for the purpose, Courts, on established principles of equity, may set them aside altogether, or only sub modo, and administer the relief that right and justice may require. In the case of insane persons, and the relief to bo afforded under certain conditions, an instructive case will be found in Sprinkle v. Wellborn, 140 N. C., 163, and other decisions in this State are in accord with that well considered opinion. Chamblee v. Broughton, 120 N. C., 170; Odom v. Riddick, 104 N. C., 515; Riggan v. Green, 80 N C., 237; Carr v. Holliday, 21 N. C., 344. In the case of deeds procured by fraud in the treaty, or undue influence, which is held to partake of the nature of fraud (Myatt v. Myatt, at the present term) Courts are more disposed to set the instruments aside, but, even in these cases, such a decree is not always or necessarily required, but such relief will be given as the merits of the case may require. And this appropriate relief will be afforded, not only against *145 tbe principal, where he is grantee in the deed, but also against persons who were or have become beneficiaries of the fraud, when they are volunteers or purchasers with notice, or when the deeds have been procured by the fraud or undue influence of one who is acting in the transaction as agent of grantee. Squires v. Riggs, 4 N. C., 253; Derr v. Dellinger, 75 N. C., 300; Hariss v. Delamar, 38 N. C., 319 ; Huguenin v. Basely, 14 Ves., 273; Corbett v. Clute, 137 N. C., 546; Black v. Baylees, 86 N. C., 527. In Huguenin’s Case, supra, in entering a decree setting aside a deed under which third parties, to-wit, the vafe and children of the defendant, as volunteers, had acquired an interest, the Ghancellor said: “With regard to the interests of the wife and children of the defendant, there was no personal interference upon their part in the transactions, that have produced this suit. If, therefore, their estates are to be taken from them, that relief must be given with reference to the conduct of other persons; and I should regret that any doubt could be entertained, whether it is not competent to a court of equity to take away from third persons the benefits which they have derived from the fraud, imposition, ■ or undue influence of others.” And in the same opinion, he quotes with approval the words of Ghief Justice Wilmot, in a similar case, as follows: “There is no pretense, that Green’s brother or his wife was party to any imposition, or had any due= or undue influence over the plaintiff; but does it follow from thence that they must keep the money? No; whoever receives it must take it tainted and infected with the undue influence and imposition of the person procuring the gift; his partitioning and cantoning it out amongst his relations and friends will not purify the gift, and protect it against the equity of the person imposed upon. ■ Let the hand receiving it be ever so chaste, yet if it comes through a polluted channel, the obligation of restitution will follow it.” ’ *146 . And like decision was made in our own Court, Hariss v. Delamar, supra, in which it was held: “That an instrument obtained by fraud and imposition on the part of a father, in behalf of his infant children, must be set aside in equity.” And in Corbett v. Clute, 137 N. C., at p. 551, being a case where an instrument had been procured by the misconduct of an agent, the Court said: “It will not be contended that the plaintiff is not bound by the statements of his agent. Tie is here now, asserting his claims under the note and mortgage obtained for him by this transaction, and if he claims the benefits he must accept the responsibility.” Citing Hariss v. Delamar, and Black v. Baylees, supra. The correct application of these principles will show that there was error in the portion of his Honor’s charge excepted to by plaintiff, and that he should not have restricted the defendant’s liability by directing the jury, in effect, “that they could not render a verdict for plaintiff on the second and third issues, unless it was established by proper proof that the execution of the instruments in question had been procured by the fraiid or undue influence of the defendant, or that said defendant was a party to it.” For, as indicated in these decisions, if these instruments were procured by the fraud or undue influence of one acting as agent of the defendant, the grantee in the deed; or if the defendant was a volunteer or bought with notice of'the wrong done the plaintiff, if such wrong was done, or of facts sufficient to put a man of average business prudence on inquiry that would lead to knowledge, in either event, the plaintiff would be entitled to adequate and proper relief. We are of opinion that thére was error committed to plaintiff’s prejudice, and that there should ‘be a new trial on all the issues. It is so ordered. New trial.