Emery v. First National Bank

156 N.W. 105 | N.D. | 1916

Bruce, J.

(after stating the facts as above). According to the brief of appellant, his discussion is limited to the following points:

1. Had the trial court the right upon the record in this case to discharge the jury and make the findings of fact and the order dismissing the action?

2. The insufficiency of the evidence to sustain the three vital findings ■of fact; namely, the second, fourth, and fifth.

3. The error of the court in refusing the plaintiff’s application to amend his complaint.

The first question that presents itself is whether an equitable action to set aside a deed, and in which a jury is summoned, comes within the provisions of the Newman act so that a trial de novo can be had in this court.

In passing upon this question this court in the case of Peckham v. Van Bergen, 8 N. D. 595—597, 80 N. W. 759, said: “The question is this, whether § 5630 of the Bevised Codes, § 6193, Comp. Laws 1913 [being the Newman act] as amended by chapter 5 of the Laws of 1897 governs the procedure in the district court and in this court in an equity case wherein the trial court calls a jury to its aid for advisory purposes. It is our opinion that said statutes do not govern in such cases. That the district court may, at its discretion, call in a jury for an advisory verdict in an equity case is entirely clear. This is the old and well-established practice in courts of equity, and this practice is clearly recognized in the Code of Civil Procedure, Bevised Codes, § 5420. But when this course is adopted in the trial of equity cases, the practice which regulates such trials — the same not being governed by statutory provisions — must be sought for in elementary treatises, and in the decisions of the courts. In the absence of controlling statutory provisions, the ordinary rules of evidence worild be applicable in such cases, and would govern in the elicitation of the evidence; and upon appeal this court would not try the case anew, but would sit as a court of review for the correction of errors, as was the practice here in all cases prior to the enactment of the statute found in chapter 83 of the Laws of 1893, popularly known as the ‘Newman Law.’ ” This case seems to be conclusive upon the matter before us, and to limit our investigation to errors of law and to errors of law alone.

The next point is whether a jury having been summoned and questions submitted to it, it was within the power of the court to discharge that jury and to withdraw the questions from it, and this point is presented in two ways by counsel for appellant. He first contends that .the verdict of the jury upon the questions of fact submitted would, if rendered, have been as conclusive upon the court as a finding of fact of a jury in a common-law action, and that it was therefore error not to wait for and to listen to them. He then states that, even if this is not so and the jury in such cases merely acts in an advisory capacity, the court cannot pass upon the questions of fact himself without having first listened to and had the advice of the jury, and that the advice of the jury is, as it were, in the nature of expert evidence in the case.

These propositions seem also to have been considered in the ease of Peckham v. Van Bergen, supra. On page 599 the court says: “Nor does the fact that a jury in this case was called in an advisory capacity, militate against the construction we have given this statute. The terms of the statute confine its operation to all cases tried in the district court ‘without a1 jury.’ It is true that the verdict of a jury is not binding upon the court in equity cases. The trial court is vested with a discretion to vacate such verdict in whole or in part, but this does not alter the fact that such verdicts are entitled to receive-grave consideration at the hands of trial courts. Juries are not called, even in equity cases, as a mere formality; and their findings are seldom disregarded by courts of chancery, unless the same are clearly wrong. Experience has shown that, for the trial of many questions of fact, an average jury is the best of all tribunals. It is for this reason that courts of equity have always been clothed with a discretion to call a jury to their aid in determining mere questions of fact; and, in our judgment, it is quite as important in an equity case as in a law case to exclude from- the consideration of juries composed of laymen all evidence which is inadmissible under the established rules of evidence.”

This case seems to establish two propositions: One, that the verdict of the jury is merely advisory, and the other, that the verdict of the jury. should be listened to and given its weight. We do not infer that this court meant to state that such verdicts should always be controlling. In fact, nowhere in the authorities do we find any such rule except in cases which were handed down under the ancient practice. The most extreme limit of the rule that we can find being that if, after the receipt of the verdict, the chancellor was still in doubt, or his mind still oscillated as to the question so submitted, his doubt should be resolved in favor of the verdict. See McDaniel v. Marygold, 2 Iowa, 500, 65 Am. Dec. 786. The cases, indeed, are innumerable which hold that in an equity case, and even where questions of fact are submitted to the jury, the mind to be convinced is, after all, the mind, not of the jury, but of the chancellor, and that the suits none the less partake of the nature of suits in equity. Re Hudson, — Minn. —, 155 N. W. 393; Bethany Hospital Co. v. Philippi, 82 Kan. 64, 30 L.R.A.(N.S.) 194, 107 Pac. 530; 38 Cyc. 1936; Watson v. Borah, 37 Okla. 357, 132 Pac. 347; Re Peck, 87 Vt. 194, 88 Atl. 568; Avery Mfg. Co. v. Crumb, 14 N. D. 57, 63, 103 N. W. 410.

Although, too, there is a conflict of authority as to whether, after issues have once been submitted to a jury, that submission may be withdrawn and the cause thereafter be tried by the court alone; that is to say, whether the court may withdraw these issues and questions, and pass upon the questions submitted, without first listening to and having his conscience made acquainted with that verdict; and this court has held that where a verdict is actually received it should be duly considered, and that, after it has been received, the court has no power to order further evidence, or to have his conscience affected by evidence which was not presented to the jury upon the questions submitted to them. Peckham v. Van Bergen, 8 N. D. 595, 80 N. W. 759. There can be no dispute that in a suit in equity to cancel or set aside a deed, the conscience or the mind that is ultimately to be affected and to which the proof must appear clear and convincing is the mind of the chancellor. It follows, therefore, that if, during the course of the trial, it becomes evident to the chancellor that the questions submitted are outside of the real issues of the case or are not controlling, he may withdraw the submission of the same, and can decide the case on the issues, retained exclusively by him and which are controlling. He, under the established principles of equity practice and under the provisions of our Code, has the ultimate power to set aside or modify the verdict, when once received, even though he should carefully consider it. He must, therefore, have the power to refuse to consider it at all when its determination would have no effect, one way or another, on the final issues in tire case. Kohn v. McNulta, 147 U. S. 238, 37 L. ed. 150, 13 Sup. Ct. Rep. 298; Perege v. Dodge, 163 U. S. 160, 41 L. ed. 113, 16 Sup. Ct. Rep. 971, 18 Mor. Min. Rep. 364; 7 Enc. U. S. Sup. Ct. Rep. 756.

Section 7608 of the Compiled Laws of 1913 provides that “an issue of fact in an action for the recovery of money only, or of specific real or personal property, must be tried by a jury, unless a jury trial is waived as provided in § 7637, or a reference is ordered as provided in §§ 7615 and 7616. Every other issue is triable by the court, which, however, may order the whole issue or any specific question of fact involved therein to be tried by a jury or by a referee as provided in §§ 7615 and 7616.” Section 7615 provides: “All or any of the issues in an action whether of fact or law or both may be referred by the court or judge thereof upon the written consent of the parties,” etc., and this section relates merely to references and to referees. Section 7616 provides: “When the parties do not consent to the reference the court may upon the application of either party or of its own motion direct a reference in the following cases: [1 and 2, generally in cases where an accounting is necessary]. 3. When a question of fact other than upon the pleadings shall arise upon motion or otherwise in any stage of the action.”

One cannot read § 7608 in conjunction with §§ 7615 and 7616, to which it refers, without being firmly convinced that a reference, whether to a jury or to a referee, is, in North Dakota, a matter which is entirely within the discretion of the trial judge. It is worthy of notice, indeed, that in § 7608 the statute expressly states that an issue of fact in an action for the recovery of money only, or of specific real or personal property, must be tried by a jury unless a jury trial is waived, but when it comes to other issues it expressly provides that “every other issue is triable by the court, which, howeyer, may order the whole issue, or any specific question of fact involved therein, to be tried by a jury or by a referee, as provided in §§ 7615 and 7616.” The words “must” and “may” are antithesized. They must be held to have been advisedly used, and it is perfectly clear to us that the statute in equitable actions merely intended to re-enact the well-established law which allowed the chancellor in such a case, if he saw fit, but only if he saw fit, and in the exercise of his sound discretion, to submit any or all of the issues to a jury for an advisory verdict thereon. In the states where the procedure is unaffected by statute and is such as prevails under the ancient law, there has never been any pretense that a reference to a jury of an issue in an equitable case was a matter of constitutional right. Thomas v. Ryan, 24 S. D. 71, 123 N. W. 68; De Graff v. Manz, 251 Ill. 531, 96 N. E. 516; 38 Cyc. 1936, and cases cited; Hogan v. Leeper, 37 Okda. 655, 47 L.R.A.(N.S.) 475, 133 Pac. 190; Bethany Hospital Co. v. Philippi, 82 Kan. 64, 30 L.R.A. (N.S.) 194, 107 Pac. 530.

There is nothing in our Constitution which leads us to any such inference, and the statute (Comp. Laws 1913, § 7608) clearly leaves the matter within the discretion of the trial judge.

It is perfectly true that we have held that where an issue is once referred to a jury, the verdict of the jury is entitled to receive grave consideration at the hands of the trial court. Peckham v. Van Bergen, 8 N. D. 595, 80 N. W. 759. We have never held, however, that where, during the course of a trial, it becomes apparent that an issue of fact which has not been submitted to the jury and a request for the submission of which has not even been made, in controlling in the case, the mere fact that other facts or issues have been submitted, takes away from the chancellor his inherent powers, and that he cannot decide the case on this issue without waiting for and considering the verdict of the jury and when that verdict would not have affected that issue, no matter in whose favor it had been rendered. Sanders v. Simcich, 65 Cal. 50, 2 Pac. 741.

Such is the state of the issues and of the record in the case at bar. The questions which were submitted to the jury relate purely to the execution of the deed and bill of sale on ihe day of December, 1911, and are illustrated by the first question, which reads: “Was the plaintiff induced by the defendants or either of them to execute and deliver the deed and bill of sale referred to in ¶ 6 of the complaint, by the deceit or misrepresentation of facts by the defendants or either of them, and on which the plaintiff relied ?” and the fourth, which reads: “Did the defendants or either of them malee use of their confidential relations with the plaintiff or take oppressive or unfair advantage of the plaintiff’s necessities or distress to induce him to execute and deliver such deed and bill of sale?” and the sixth, which reads: “Was the plaintiff induced to execute and deliver such deed and bill of sale by threats of the defendants or either of them, of injury to the person or property of the plaintiff ?” Even the additional question subsequently requested, the submission of which was refused as it did not appear to the court to be covered by the pleadings, was to the same'effect, and covered the same point and the same transaction. It was: “9. At the time of the making and execution and delivery of the deed and hill of sale whereby the plaintiff conveyed to the defendant Wiper the real and personal property described in the complaint, was his mental capacity such as to make him incompetent to transact the business involving the execution and delivery of such instruments?”

If this later question proposed to amend the pleadings, and was intended to raise the new contention that the plaintiff was insane or generally feeble-minded so as to be generally incapable of executing contracts, there was, of course, no error committed in refusing its submission, as well as the requested amendment to the pleadings on which it was sought to be based. The amendment to the pleadings was not asked until after the trial had proceeded for several days, and after the conclusion of the plaintiff’s case, and it can hardly be said that it was an abuse of discretion to refuse to allow such an amendment at such a time.

The plaintiff, however, does not pretend any such thing, and the record before us negatives any such intention. We have no evidence of the appointment of a guardian or conservator, and the suit at bar is not even brought by a guardian ad litem or by a next friend. It is brought by the plaintiff himself, and by attorneys employed by him, and the deed is sought to he set aside almost entirely upon his own testimony. If he is mentally incompetent to make any contract, it is difficult to see how he could make any valid contract of employment even with his attorney.. The case, indeed* is brought on the theory and on the theory alone (and we are now quoting from the language of counsel himself, in his brief on the rehearing), “that is to say, on the theory that the plaintiff, though not insane or generally contractually incompetent, was a weals: man and liable to be easily influenced, and that the defendant Wiper on the 14-th day of December, 1911, overpowered his will be inducing him to sign a deed and bill of sale in the absence of his counsel, when he was harassed by the fact that the bank has seized his personal property under its chattel mortgage and was threatening to foreclose and sell the same, and by fraudulent concealment of his actual indebtedness and the actual state of his account.” “The proof shows,” says counsel in his petition for a rehearing, “that the plaintiff was weak-minded and easily influenced, and was in dire distress; he was persuaded that his financial condition was hopeless. He says Wiper told him that if he did not give him the deed and bill of sale he (Wiper) would follow him. He was possessed of a farm, but without means of tilling it, and he faced the necessity of supporting his family of little children. The jury saw the two men, and under all of these circumstance can this court say, from the cold record before us, that there was no overmastering influence on one side and mental weakness, necessity, and distress on the other ? Can it so determine that such weakness, supplemented by the necessity and distress, was not the cause of plaintiff’s yielding to the overmastering influence of the successful banker, who seems to have had his hand on everything and was disposed to yield nothing.”

We very much doubt if these facts are as conclusively proved as counsel maintains, but rather the folly of a weak, but not insane, man who, for fear of incurring a lawyer’s bill, chooses to go ahead with a business transaction without sufficient legal advice. Even if all that counsel maintains, however, is true, and was supported by the proof, that fact would have no effect on the real and controlling issue in the case and which is ratification.

Counsel for plaintiff and appellant do not pretend that there is any proof of actual fraud, or that there is any proof of any false statements, and he ignores entirely, in his petition for a rehearing and in his brief on such rehearing, the plaintiff’s subsequent ratification of the deed and bill of sale, and which was evidenced by the giving* of orders to his creditors on the money which he was to get out of the transaction, and the taking of certain cows which were to be given to him under the agreement, in place of a hundred dollars of the purchase price, and accepting as a gift machinery and horses which were covered by the chattel mortgage, and by stating to several persons that he was thoroughly satisfied with the transaction. That these acts were done plaintiff himself does not seriously dispute. In fact, as to his giving the orders for the payments and the receipt of the stock and machinery, he enters no denial whatever, and three of these orders were, according to his own testimony, given at least eight days after the principal transaction. One of these orders, indeed, he attempted to have dated back and prior to the time of the giving of the deed, and in this transaction he clearly shows not merely cunning, but a lack of honesty, which entitles him to but little credit or consideration in a court of equity.

This question of ratification was not one of the questions which were submitted to the jury. It was a matter which, even after the submission to the jury of the specific questions, was reserved for the consideration of the chancellor, and of the chancellor alone. It was controlling’ in the case. 6 Pom. Eq. Jur. 687. No matter if the plaintiff’s will was overcome at the time of the making of the deed, it cannot be claimed that it was overcome at the time of the making of these orders and of receiving these benefits under the contract. This was a matter for the chancellor alone to pass upon. The jury was not involved in it in any manner. Even if all of the questions propounded to the jury had been answered in favor of the defendant, the answers would not have affected the real issues in the case at all, and even though the submission of certain facts or certain issues in an equitable action to a jury may make the action partake of the nature of a law action, in so far as these issues are concerned, it cannot be contended that as to the issues not” submitted the power of the chancellor is in any way limited or controlled. It was for him ultimately to say whether the proof was so clear and convincing that the deed should be set aside. Thomas v. Ryan, 24 S. D. 71, 123 N. W. 68; Hogan v. Leeper, 37 Okla. 655, 47 L.R.A. (N.S.) 475, 133 Pac. 190; Bethany Hospital Co. v. Philippi, 82 Kan. 64, 30 L.R.A. (N.S.) 194, 107 Pac. 530. And this in view, not merely of the evidence on which specific questions had been .submitted to the jury, but of that the consideration of which had been reserved to him alone.

Even if we were reviewing this case under the latitude of the Newman act, we would hesitate in holding that the proof was clear and convincing of undue influence in the first transaction. On the other hand, we are sure that it conclusively proved a ratification of the transaction, and under circumstances where no pressure was brought by the defendants, -and after every opportunity was afforded for deliberation, and even after counsel had been consulted.

The plaintiff himself testified on cross-examination: I am acquainted with John Norlin. He ran the blacksmith shop there. I might have had a talk with him just before I made this settlement, telling him that I was figuring on making a settlement, and that, if I made it, he could get his money. After I had made the statement, I told him I had settled with the defendants, and that, if he would go. to the defendants’ bank, he could get his money. I also told him that I had transferred my property to the bank, and received for my interest a thousand dollars in cash, farm implements, and horses sufficient to start farming, etc., getting all of my debts paid. I think he went to the bank and got his money. He never asked me for it any more. I cannot say that he told me that he had gotten it. I should say he had, probably. We talked different times on this proposition afterwards.

Q. Did you tell him that you had made the deal; that you were well pleased with the settlement; that you had made a better settlement than you had expected to be able to make, and that you intended to go to Montana and take a homestead and start farming anew without debts ?

A. It would not surprise me if I told him that the day after.

On this point the witness John Norlin testified:

I am a blacksmith at Bowbells.

Q. Did you see Emery up there at that date after he had made settlement with the bank and with Wiper ?

A. Yes, he said he had made settlement. It was the next morning —the next day. He did not appear to be intoxicated. He did not have the appearance of a man that had been drinking. I have never seen him take a drink. At that time he owed me some money. At that time I dunned him for it. He said I could go up to the bank and get my money any time I wanted to, because he had made settlement, and Wiper was going to pay it.' I did not go just then.

Q. Did you go any time ?

A. Yes, I got my money, you bet. The conversation was by Wiper’s . bam. Mr. Robins was there. Emery said he felt better. He told me about what he had got. Some of the stuff he had got. He said he made settlement and felt better.

The plaintiff Emery again testified: I am acquainted with Mr. Moore, of the Moore Implement Company. In December, 1911, I was owing the Moore Implement Company a bill of something like $25 or $40. I remember telling Mr. Moore I was about to make a deal with Mr. Wiper for the property, and that if that went through I would pay him.

Q. Do you remember telling him that on about the 22d day of December — telling him that you had made a settlement with Wiper and the bank?

A. I met Mr. Moore— ,

Q. Answer!

A. No.

Q. You don’t remember that? Do you remember that on or about the 22d day of December you gave Mr. Moore an order on the First National Bank, the defendant in this action, and A. C. Wiper, wherein you told them to pay M. B. Moore Implement Company $34.75 and charge to my account and signed your name to it ?

A. Yes, sir.

• Q. That was one of the deals that the bank and Wiper was to pay for you in this settlement ?

A. Yes, I gave him an order.

Q. That was on the 22d day of December, wasn’t it? Some eight days after you had made the deal with the bank ?

A. Sometime after — yes.

Q. At the time of giving the -order, didn’t you tell him you had made the settlement with the bank.

A. I told him I calculated to break that settlement. At the time I gave him the order I asked him to let me date it back.

Q. And at that time he told you he could not date it back, and even if he did, and were afterwards asked as to the date it was signed, he would have to say on the 22d day of December ?

A. I could not say “yes” to that, but possibly so.

Q. You asked Mr. Moore to date this order back ?

A. Probably — I think so. I did not give him asa reason for wanting it done that I might have some difficulty with Wiper over the real.

Q. At that time you gave him as a reason for wanting it done that you might have some difficulty with Wiper over the deal, as you thought you might be able to recover some more property from them ?

A. No, sir.

On this point the witness Moore testified:

I am manager of the M. B. Moore Implement Company. On December 22d, 1911, Mr. Emery owed us something. At about that time he gave me or the M. B. Moore Implement Company an order on the defendant for the money. At that time he made a request as to whether it was to be dated back. He said he would like to date it back some time, gad I asked him how much, and he said he would like to date it back to about the 13th, if I remember right. He said that he was informed that he could get more money out of this deal, and he thought if he would sign the order now it would kind of hurt him from getting any more money. It would show that he had made settlement.

Q. Would you agree to having the order dated back?

A. No, I would not. I told him even though it was dated back, if I was questioned I would not go different from the date.

Q. Is that the same order Mr. Emery admitted on the witness stand the other day ?

A. It . must be. It was the only order he ever gave me. I do not know whether he had been drinking or not at the time he gave me this order.

Q. Did he say anything to you at any time about having made the deal with the defendants ?

A. Yes, sir. He called at my office shortly after he had made the deal. I do not know what day he made the deal, but he said it was yesterday. He expressed himself as being well pleased. He said that certainly was a great load off his mind. I believe that is the words he used, — something to that effect.

Again the plaintiff Emery testified on cross-examination:

I am acquainted with Jens Pederson, of Bowhells. He was engaged in running a mercantile store.

Q. Do you remember going into his store and telling him that you had sold your place to Wiper and made settlement with the bank ?

A. Yes, I think I did. About that time I was owing him about $60.

Q. Do you remember telling him that the defendant had agreed to pay your indebtedness and your outstanding indebtedness around Bow-bells, and that if he would go to the bank he could get his money ?

A. I don’t recollect that part about his going to the bank and that he would get his money.

Q. Did you tell him that he would get his money?

A. I would not say. I would not be surprised.

Q. Did he get it ?

A. I believe he told me afterwards he got part of it.

Q. Do you remember telling Mr. Pederson that you had transferred your property to Mr. Wiper and had received certain horses and a thousand dollars, and was to have all debts paid, — do you remember of telling him that ?

A. I do not recollect, exactly, but I do not dispute it.

Q. Do you remember telling him that you were well satisfied with the deal?

A. I do not remember that.

On this point the witness Jens Pederson testified:

I remember about the time Emery made a deal and deeded this property to Mr. Wiper. At that time he owed me about $60. I had talked with him a number of times about paying us before that. I talked to him after the deal, on the 15th of December. He came into my store in the evening, and he started to tell me about a deal he made with the bank, so I said to him, “I suppose, then, you will have some money.” He said, “That is in the deal. Mr. Wiper agreed to pay your bill.”

Q. Did he tell you to go to the bank and get your money ?

A. No, he did not tell me to go to the bank because I took that. That was quite enough when Mr. Wiper agreed to pay it. He told me that Wiper had agreed to pay it, I did not go to Mr. Wiper for the money the same day.

Q. Did you at any time?

A. Yes, I did. Yes, sir, Mr. Wiper paid it. Emery said he was well pleased with the deal, and he told me he was to get a thousand dollars and enough to start in farming, a team and some machinery and that the best he could do was to go and get him a new home now.

In addition to this the plaintiff himself testified that he had given similar orders to at least three other persons for payments out of the same fund. It is absurd, in the face of all of this evidence, to contend that there was not merely proof of ratification, but that the ratification was not overwhelmingly proved. Three of these transactions, at least, took place on the 22d of December, and nine days after the signing of the deed and bill of sale. The defendants were not present on any of these occasions, and there was no duress, undue influence, or any other pressure exercised. The question of ratification was not submitted to the jury in any way, and their verdict, even if it had been received, would have had no weight or influence. The trial court, therefore, did not err in making his findings for the defendant and dismissing the action. 6 Pom. Eq. Jur. 687; 1 Mod. Am. Law, 415; note to Miller v. Sterringer, 25 L.R.A.(N.S.) 601.

The judgment of the District Court is affirmed.