Kuelkamp v. Hidding

DixoN, O. J. Counsel for tbe defendant are especially clever and adroit in argument, and certainly make tbe most of their side of tbe case; but we still think their demurrer go tbe complaint was correctly overruled, and that tbe order appealed from must be affirmed. Tbe authorities cited by counsel opposed are full to tbe points in all directions, that tbe complaint states a good cause of action for rescinding tbe sale and can-celling tbe conveyances on tbe ground of fraud, misrepresentation, false impressions produced, imposition, violation of trust and confidence, undue influence obtained over the mind of a weak and illiterate man, still further enfeebled by present anxiety and excitement, or undue advantage taken of tbe ignorance, necessity and distress of such a man, amounting to oppression on tbe one side with no power of resistance on the other, or whatever else, in tbe vocabulary of equity and of equity lawyers, tbe true ground for relief may be said to be. The complaint seems to reach out in all directions, and to present and satisfy all these grounds; and, besides, tbe grossest inadequacy of price is alleged. Counsel for tbe defendant argue that the misrepresentation must have related to tbe quantity, quality, situation or value of tbe property sold, or tbe pecuniary responsibility of tbe purchaser, or to something of that nature; otherwise equity will not grant relief on that ground. Such may be conceded to be tbe general rule in equity, or tbe most frequent form of misrepresentation met with in tbe books; but it does not follow that there can be no other which will constitute the basis of equitable interference and relief. Equity does not limit itself by set rules nor by precise definitions, particularly in matters of fraud. Fraud is so multiform as to admit of no such rules or definitions; and hence equity always leaves tbe way open to punish frauds, and redress wrongs perpetrated by means of them, in whatsoever new form they may appear. A misrepresentation producing confusion and terror of mind, unsettling tbe judgment and depriving tbe party of tbe reasoning faculty, [509] so that be cannot think or act deliberately or with knowledge and composure — such a misrepresentation purposely made in order to take advantage of tbe mental derangement and fear which ensues to secure a bard and unconscionable bargain, is certainly a fraudulent misrepresentation in tbe eye of a court of equity, and one against -which that court will grant relief in a proper case. Such is tbe misrepresentation complained of in tbe present case. Tbe sentiment or impulse of fear is a very overpowering one, especially in weak and uneducated minds; and to take unfair and dishonest advantage of it, whether produced by fraudulent misrepresentation or not, ought to be no less a fraud, in tbe consideration of equity, than to take such advantage of an insane person, a lunatic, or an idiot. If the conveyances in the present case bad been obtained from the plaintiff when under arrest by tbe mob, no doubt they would have been void, or could have been avoided on tbe ground of duress. If they bad been obtained under the same circumstances with tbe addition of a threat to lynch or murder him, a fortiori would tbe same consequences have followed. How much better, upon tbe facts stated in tbe complaint, was tbe actual situation of tbe plaintiff, so far as tbe use and exercise of a free will and judgment were concerned, at tbe time the conveyances in question were executed? He was harassed by tbe same tormenting fears, though less perhaps in degree and intensity. He was fleeing from the same mob, and from the terrors of tbe same lynch law, attended part of the way by the present defendant, who, under tbe guise of friendship, but in reality to accomplish bis own sinister and selfish purposes, stimulated and nursed bis fears, and urged him on in bis flight. The defendant succeeded under such circumstances in obtaining conveyances of tbe plaintiff’s farm for one-tbird its value, and yet it is said to have been no fraud on tbe part of tbe defendant. If tbe defendant, with fraudulent intent, had caused or produced intoxication of the plaintiff, and so had obtained tbe [510] conveyances on the same terms, no one would doubt that equity would relieve against them. How does mental derangement, incapacity or pressure otherwise produced for like fraudulent ends, change or vary the application of the principle? It clearly appears to us that it cannot For the rest we make some extracts from the authorities cited by counsel for the plaintiff, which seem to us peculiarly applicable to the case. The second kind of fraud mentioned by Lord Hardwicke, in Chesterfield v. Janssen, 2 Vesey, Sen., 154, is that which “ may be apparent from the intrinsic nature and subject of the bargain itself; such as no man in his senses and not under delusion would make, on the one hand, and no honest and fair man would accept, on the other ; which are inequitable and un-conscientious bargains ; and of such even the common law has taken notice ; for which, if it would not look a little ludicrous, might be cited 1 Lev., 111, James v. Morgan. A third kind of fraud is, which may be presumed from the circumstances and condition of the parties contracting; and this goes further than the rule of law, which is that it must be proved, not presumed ; but it is wisely established ia this court to prevent taking surreptitious advantage of. the weakness and necessity of another; which knowingly to do is equally against conscience as to take advantage of his ignorance; a person is equally unable to judge for himself in one as the other. ” “To make any agreement valid, ” says Judge Willard (Eq. Jur., 170), “requires the assent of the understanding of the several parties thereto. This implies freedom of action, as well as the exercise of reason, accompanied with deliberation; the mind weighing as in a balance the good and evil on either side. Every true consent supposes, first, a physical, second, a moral power; and third, a serious and free use of them. Hence it follows, that persons under duress, idiots, madmen and infants, are in general incapable of making contracts, either from a want of freedom of action, or an inability to judge of their own actions. [511] Tbis disability is not in all casés total, but sub modo only. But tbe persons laboring under it are, at all times, tbe peculiar objects of tbe paternal guardianship and protection of a court of equity. “ It is upon tbis principle that courts of equity watcb, witb extreme jealousy, all contracts made by persons, when there is any ground to suspect imposition, oppression, or undue advantage being taken by one of the parties ; or when one trusts to another with a blind and credulous confidence ; or when one of the parties, from whom an advantage has been obtained, was in circumstances of extreme necessity and distress. Undue influence can bardly ever obtain its object without some degree of fraud; but the cases show it may exist without actual moral fraud. It has a nearer affinity to duress than to fraud, and in some cases it may contain a mixture of both.” Tbe language of Judge Story is much tbe same. 1 Eq. Jur., § 192. Speaking of inadequacy of consideration, Judge Story says it is not, of itself, a distinct principle of relief in equity ; and such is undoubtedly tbe correct rule. But gross inadequacy, such as “ shocks tbe conscience,” becomes, of itself, evidence of fraud. “As to tbe unconscionable nature of tbis bargain, I bardly know bow to express it; but must express it in terras that have been used by this court before; that, if tbe terms are so extremely inadequate as to satisfy the conscience of the court, by tbe amount of tbe inadequacy, that there must have been imposition, or that species of pressure upon distress, which in tbe view of tbis court amounts to oppression, tbis court would order tbe instruments delivered up, though courts of law might bold that judgment not within tbe sphere of their powers.” Such is tbe language of Lord Eldon, in Underhill v. Horwood, 10 Vesey, 209, 219. And Mr. Maddock says it has been held that a sale for one-half of the worth would be relieved against. 1 Mad. Ch., 269. Considering all tbe facts and circumstances stated in tbe [512] complaint, therefore, the ignorance of the plaintiff of business, and of the customs and usages thereof, and his illiteracy, the disturbed and agitated condition of his mind caused by the misrepresentations which were made to him, his fears and anxiety lest he might be seized and summarily punished by the mob; and considering the secrecy of the transaction and its haste, the plaintiff having had no opportunity to seek or obtain the advice of friends or counsel; and above all considering the gross inadequacy and imposition in the price — we have no hesitation in saying the complaint states a strong case for, equitable interposition, and for relief against the conveyances, and that the demurrer was properly overruled. By the Court.— Order affirmed.