Renfeldt v. Brush-McWilliams Co.

Bronson, J. This is an action to rescind a contract, certain notes, and mortgages, upon grounds of intoxication. In the trial court, judgment was rendered dismissing the action. The plaintiff has appealed and demands a trial de novo. Substantially the facts are as follows: The defendants are corporations, somewhat closely afiiliated, engaged in business in Minot. For some four years, prior to the transaction involved herein, the plaintiff had rented and farmed a large farm near Minot, leased to him through the defendants, Brush-McWilliams Company. This defendant was his financial adviser. For some time also, anterior to the transaction herein, the plaintiff had conducted a coal and feed business at Minot. [226] Some four years before the transaction herein, one Boden and one Bustard had acquired an interest in a half section of land (the land involved herein), through the Brush-McWilliams Company. In February, 1916, the plaintiff and Boden had negotiations concerning the sale of this half section of land and the coal and feed business of the plaintiff. At the time Boden and Bustard were indebted to the defendants in an amount exceeding the consideration demanded for the land. The plaintiff, bought the land for the consideration of $14,000. The defendants financed the transaction. The plaintiff and Boden, in their testimony, claim that the transaction was to and through the Brush-McWilliams Company, as principal. The defendants claim in their testimony that they acted solely as middlemen in financing the transaction. In any event, the transaction was accomplished by the plaintiff assuming a $6,000 mortgage on the land, executing promissory notes for $8,000 secured by a second mortgage upon the land and a chattel mortgage upon the defendant’s personal property, running to the defendants, and by turning over an order for $1,000 upon Boden and Bustard to the defendants, the consideration for the sale of his coal and feed business. Boden and Bustard delivered a deed of the land to the defendants. They, with authority, as they assert, filled in the name of the plaintiff as grantee therein and recorded the same; Boden and Bustard were released, by or through the defendants, of securities and obligations held by them, to the amount of $14,000. These negotiations and transactions occurred approximately between the dates February 26, 1916, and March 3, 1916. On February 28, 1916, a written agreement was made by Boden and Bustard to transfer the land to the Brush-McWilliams Company for a consideration of $14,000 to be paid by the company assuming the mortgages and encumbrances, in that amount on the premises. On the same date, another written agreement was made by the Brush-McWilliams Company to-transfer such land to the plaintiff for a consideration of $14,000. Likewise on the same date such company made a written agreement to furnish the plaintiff, in case it should be necessary, for the season of 1916, sufficient money for seed and for living expenses. On the same date, the notes and mortgages were made. On February 29, 1916, the deed was executed. On the same date a written agreement was [227] made between Boden and Bustard and tbe plaintiff to sell tbe coal and feed business for $1,000 plus the inventory price of tbe coal .and feed stock. On this same date tbe order for $1,000 was given by tbe plaintiff. Boden and Bustard paid tbe defendants tbe amount remaining due from them on their indebtedness. Tbe plaintiff then received from Boden and Bustard $486.71 for tbe inventory price of tbe coal and feed stock. Other details of tbe settlement were then adjusted. Tbe plaintiff alleges and asserts that tbe record discloses drunkenness on bis part, existing at tbe time these negotiations and transactions took place, to such an extent as to demonstrate legally tbe inability of. tbe plaintiff to understand and comprehend tbe transactions bad; that by reason thereof rescission should be permitted through advantage and overreaching obtained on tbe part of tbe defendant; that, in any event, tbe record further discloses such undue influence and undue advantages taken of tbe plaintiff as to warrant rescission. Tbe record amply shows that the plaintiff at tbe time of tbe negotiations and for a considerable period of time, anterior thereto, was and bad been a drinking man; that both Boden and tbe plaintiff were indulging considerably in tbe use of intoxicating liquors through tbe period of negotiations. There is some testimony in tbe record that tbe plaintiff did not know what be was doing and that be was quite drunk at tbe time of these negotiations, but tbe testimony concerning tbe intoxication of tbe plaintiff, so far as it affected bis ability to understand and comprehend what be was doing, must be considered in tbe light of tbe surrounding circumstances. His wife testifies that when she signed tbe notes tbe plaintiff was there; that be was then drunk; that be bad been nothing but drunk for two years straight; that she bad not seen him very much more sober for two years than he.was that day; that be was always drunk. Tbe record does disclose that tbe plaintiff was able to get about; that be discussed these negotiations with an attorney (not bis attorney); that they proceeded for many days. In accordance with bis own testimony, during these negotiations and prior to tbe time tbe contracts and papers were signed, be went out .to see tbe land with a view to purchasing it. He says then that be was practically sober; that be talked with Boden of tbe consideration; that tbe amount was $14,000; that be went to see tbe Brush-MeWilliams [228] Company to finance it, and that they promised to finance it. These acts do not show deprivation of reasoning or understanding. Shortly after these negotiations, in accordance with the plaintiff’s testimony, he became sober or more sober; he went out to take a look at the land; he discovered that he had made a poor deal; he went to see the defendants and told them that he wanted to back out. The defendants offered then to give him another quarter section of land out in the hills, but this was not satisfactory. Later, on April 3, 1916, he caused to be served, in writing, a notice of rescission. It is deemed unnecessary to review in detail the evidence concerning the manner or extent of the plaintiff’s drinking: The sole ground for rescission, upon this record, is primarily based upon intoxication of the plaintiff, existing at the time of the negotiations. In the proof we are satisfied that there exists no ground for .a finding of unconscienable conduct, or overreaching, unless it be upon the ground of plaintiff’s intoxication. The trial court, in a memorandum letter, has, in effect, found that the grounds of rescission, on the part of the plaintiff, even though they existed, applied only to Boden and Bustard, and not to the defendants, who agreed to finance the plaintiff in this deal. We, however, are of the opinion that the grounds of intoxication are sufficient, if established, to apply to the obligations of the defendants as well as to the contract obligations, if any, with Boden and Bustard. In previous cases, this court has laid down the rule that to set aside a contract upon grounds of intoxication, it must be shown that the person was so intoxicated as to be incapable of understanding the nature and effect of the transaction. In effect, his drunkenness must be so excessive as to utterly deprive him of his reasoning and understanding, and so as to render him incapable of knowing the effect of what he was doing., Any degree of intoxication less than this affords no grounds for release in the absence of fraud on the party of the other party. Power v. King, 18 N. D. 600, 602, 138 Am. St. Rep. 784, 120 N. W. 543, 21 Ann. Cas. 1108; Spoonheim v. Spoonheim, 14 N. D. 381, 104 N. W. 845. Upon this record, reviewing the same for purposes of a new trial, we are of the opinion that the plaintiff has failed to so establish sufficient grounds of excessive drunkenness existing at the time so as to permit rescission, under the rule stated. [229] Judgment of the trial court, therefore, should be and is affirmed, with costs to the respondents. Christianson, Ch. J., and Birbzell, J., concur.