GREY, V. C.
(Syllabus by the Court.)
Bill by Lewis P. Hammell against Sallie H. Hyatt and others to set aside a deed. Decree for complainant.
The bill in this case is filed by Lewis P. Hammell, of Philadelphia, the son of Elizabeth A. Hammell, deceased, who departed this life April 8, 1898, at the age of 83, testate, by a will dated the 10th day of January, 1894. The bill seeks to set aside a deed made by Mrs. Hammell, conveying the only land she owned to her niece, Mrs. Hyatt, because it is alleged. Mrs. Hammell was mentally incompetent to make a deed, and was induced to make it by fraud and undue influence on the part of Mr. and Mrs. Hyatt. At the time of her death, in April, 1898, Mrs. Hammell had living a daughter, Mrs. Cominsky, who resided in Baltimore, and her son, the complain ant, Lewis. F. Hammell. These were her children, her next of kin and heirs at law. By the terms of her duly-executed will, she gave all her real and personal property to her son, the complainant, Lewis F. Hammell.by some competent person, Mrs. Hammell could not be trusted to go about On December 13, 1897, the deed in dispute was made by Mrs. Hammell to Mrs. Hyatt, and the acknowledgment was taken by the attorney in Mrs. Hyatt's presence. The consideration expressed is "the natural love and affection which she has unto the said Sallie H. Hyatt, and of one dollar lawful money of the United States of America, and other valuable consideration, well and truly paid by the said party of the second part to the said party of the first part at and before the ensealing and delivery of these presents," etc. The deed makes no specification of any other valuable consideration than the one dollar to be paid. Nor does it in any way indicate that a separate written agreement, obliging Mrs. Hyatt to support Mrs. Hammell during her life, was an inducement to the making of the deed. The separate written agreement is dated the same day as the deed, and refers to it as made. It is signed and sealed by both Mrs. Hyatt and Mrs. Hammell, but is neither witnessed nor acknowledged by any one, and, of course, was not recorded. The deed was recorded on the day of its date, but the fact that it had been made was not communicated by Mrs. Hyatt in any way to the complainant Mrs. Hammell's son, with whom she lived in Philadelphia. On the 8th day of April, 1898, Mrs. Hammell died, while still at Mrs. Hyatt's house. Her son was notified of her serious illness the day before her death, but got to Mrs. Hyatt's house only after his mother was dead. He took her body home, and buried her from there.
Alfred Hugg, for complainant.
F. M. Archer, for defendant.
GREY, V. C. (after stating the facts). The deed from Mrs. Hammell to Mrs. Hyatt is attacked upon three grounds: First, because it is alleged Mrs. Hammell was, on December 13, 1897, the day of its date, incompetent to make a deed; second, because it is claimed that Mrs. Hyatt obtained that deed to be made by fraud; and, third, because it is alleged she exerted an undue influence over Mrs. Hammell to induce her to make the deed. The first contention is that Mrs. Hammell was incompetent to make the deed now in dispute. The proofs show that Mrs. Hammell was 83 years of age. She was quite feeble in strength, but appears to have been physically able to go about from place to place. Her mental powers had for several years been very seriously impaired because of the breaking down of her memory almost to the point of delusion. This infirmity had increased upon her to such a degree that it is difficult to recognize her capacity to conduct a business transaction. Mere lapse of memory, as indicated by inability to recall past events at will, is, of course, no ground upon which to deny capacity to contract. The proofs as to the condition of Mrs. Hammell go much further than this. She could not keep in mind the locality of her own home, or her room in the house where she was staying, or the bed in which she slept. She forgot that she had eaten her meals. She was under the belief that her daughter, who had been dead some time, was still living, and when told she was dead would again speak of her as alive. At the very time of the execution of the deed now in dispute she did not comprehend of what her estate consisted, for she spoke of her government bond, drawing interest at $50 every six months, when in fact the only bond she had was a railroad bond drawing but 7.3 per cent. interest. She appears, when she made the deed, to have forgotten that she previously made a will, in the presence of witnesses, by full publication. She then actually believed that her son was defrauding her of her interest, when in fact he had been maintaining her for six years without charge; and she could get her interest at her own choice, her son in no wise preventing her. She believed that her son was, against her wish, collecting the rents of the property conveyed by the deed in dispute, and that this conveyance was necessary to be made in order to prevent him from continuing to collect these rents; while the truth was that she was herself, unhindered by her son, personally collecting these very rents. These failures of memory on the part of Mrs. Hammell left her in such a frame of mind that she was unable to have before her that consciousness of the property with which she was dealing, and of her relation to, disposition of, and control over it, which were necessary to make her action in regard to it competent. The court of appeals, discussing the extent to which the destruction of the memory may impair the capacity of a contract, has declared that "a person who is oblivious of a former disposition of his property is as unfit to make a subsequent disposition thereof as if he was under an insane delusion as to its extent and character." Haydock v. Haydock, 34 N. J. Eq. 573. Mrs. Hammell's condition of mind at the time she made the deed was that of a person who is incapable of recognizing and appreciating the elementary incidents necessary to the conduct of business, though they are directly within her own knowledge and observation. Her condition of mind was that of a person acting under actual delusion, for she believed things to exist against her own knowledge and observation that they did not exist. Such a person cannot be held to be competent to make a contract.
The second ground of contention against the validity of the deed (that Mrs. Hyatt fraudulently induced Mrs. Hammell to make it) and the third point (that Mrs. Hyatt exerted an undue influence to secure the deed) may be considered together. Of that sort of undue influence which is exerted by forceful assumption of a dominating control there is no evidence in this case, but of that kind whereby the weaker party is misled into action by betrayal of confidence on the part ofhouse, where Mrs. Hammell made her home; but Mrs. Hammell had never asked for their delivery to her, and her son had no reason to suppose she wanted them. He had never denied her right to them. As to all these supposed wrongdoings of the son, of which Mrs. Hyatt had such detailed knowledge, not one of them appears ever to have been made the subject of complaint to him, either by his mother or by Mrs. Hyatt. It was perfectly reasonable and natural that her only son, with whom this old lady had freely lived for six years, should care for her property, and wait upon her, until notified by her that he should treat her as a stranger. It is obvious that, if the truth had been made known to the lawyer, he would have had no occasion to advise Mrs. Hammell to make a deed. Mrs. Hyatt knew the truth. She did not tell the lawyer that Mrs. Hammell could collect the interest on her bond whenever she desired to do so, nor that she had for four months collected the rents without hindrance, and that she had never asked for possession of her household goods. If she had, the lawyer would probably have advised her that a notice to the party paying the interest not to pay it, and to the tenant not to pay the rent, except to Mrs. Hammell, or her order, would have abundantly protected Mrs. Hammell from the imaginary dangers which she feared. But, if this had been done, there would have been no deed made by Mrs. Hammell to Mrs. Hyatt. The lawyer accepted Mrs. Hammell's statements as true. He advised her at the interview of December 4, 1897, that, in order to be relieved, she might make a deed of trust conveying her property. She disapproved of this. He then told her she might make a will of her property, or give a deed or bill of sale for it at once. She told him she wanted her daughter, Mrs. Cominsky, to have the $1,000 bond when she died, and her niece, Mrs. Hyatt, to have the Locust street house. He told her she might sue in replevin or trover for the bond and household goods, and "that another way of keeping her son from collecting this rent was to make a deed at once to her niece, Mrs. Hyatt." She said she would like to do that, but that she wanted the rents as long as she lived. The lawyer says he then suggested that she make the deed in consideration of her niece giving her the rents, and providing her with a home as long as she lived. Mrs. Hyatt assented to this, and Mrs. Hammell said she would think it over, and come to the lawyer's office, and let him know. Subsequently, in Mrs. Hyatt's presence, she told the lawyer that she had decided to go ahead with the deed, and at interviews, at which either Mr. or Mrs. Hyatt was always present, Mrs. Hammell made to Mrs. Hyatt the deed now in dispute. It was executed at the lawyer's office on December 13, 1897, and acknowledged and recorded the same day. From the above reference to the lawyer's testimony, it plainly appears that the matter which Mrs. Hammell believed it was desirable and necessary to accomplish was not a disposition or conveyance of her property to any one, but the recovery of the possession of her personalty, and especially the stopping her son from collecting the interest on her bond and the rents from her house, and that the subject of a deed to Mrs. Hyatt, so far as Mrs. Hammell and the lawyer were concerned, was not the business which occasioned the interview. The lawyer appears to have advised Mrs. Hammell to make the deed to Mrs. Hyatt, because he was told the son was collecting the rents of the property conveyed by the deed, and as a means of preventing it. Mrs. Hyatt, the grantee in the deed, stood by, and accepted it, though she knew it was obtained by making Mrs. Hammell believe a falsehood, for, as above stated, Mrs. Hyatt had herself aided Mrs. Hammell in collecting these rents for the past four months. Mrs. Hyatt knew Mrs. Hammell's weakness of mind, and her utter dependence upon those who had her in charge. With this knowledge Mrs. Hyatt took Mrs. Hammell from her home at her son's house, and brought her over to Camden on a visit. She thus voluntarily placed herself in the position of a care taker or guardian of Mrs. Hammell, and will be charged by the law with the duties which attend upon such a relation, and will not be allowed to take a benefit obtained by inducing or permitting the dependent party to act under beliefs known by the beneficiary to be false.
The elementary question in cases of this character is whether the party who stands in the position of care taker has, by fraudulent contrivance or conduct, induced the weaker party to make the contract. Mere inadequacy of price, unless it were so gross as to be unconscionable, would not, of itself, be evidence of fraud. But leading the weaker party to believe that property, while standing in her name, is in danger, when in fact it is not, and standing by, knowing, but not disclosing, the truth, when this false belief is made the basis or excuse for the conveyance of the property by the weaker party to the care taker, is conduct on the part of the taker which savors of fraud. When such a contract is thus obtained, the fact that there may have been, to some extent, a valuable consideration paid or promised, does not relieve the contract from the fraudulent taint; else fraud doers might readily protect their enjoyment of the fruits of their fraud by the payment of an actual and valuable, though to them profitable, consideration. They are not entitled to the reasonable profit which induces all contracts, when the contract is procured to be made by falsehood.
The counsel for the defendants insist that the deed to Mrs. Hyatt was not a gift, and that it must not be tested by the rules applied to gifts; that a valuable consideration was in fact given for the deed, and that it was a matter of commercial contract for anadequate consideration between Mrs. Hammell and Mrs. Hyatt. But the whole trend of the proof is to the contrary. Mrs., Hyatt swears that so early as August 8, 1897, Mrs. Hammell told her, "I am going to give you that house,"—not sell it to secure a living, reserving rents. Other witnesses state Mrs. Hammell's declaration of an intent to give; all made while she was under Mrs. Hyatt's care. None refer to any mention of a sale. Again, there was no pretense of observance of the ordinary Inquiries which attend a sale of real estate. No searches were made to ascertain whether there were any mortgages or judgments against the land. Mrs. Hyatt was well content to take a deed, and, with it, the chances of unlimited prior liens. No inquiry even appears to have been made on the subject. The contract to support Mrs. Hammell was in no way indicated on the face of the deed, was executed without witnesses, or acknowledgment by Mrs. Hyatt, and, if it ever was delivered to Mrs. Hammell, the delivery, considering Mrs. Hammell's utter dependence upon Mrs. Hyatt, was no more than a delivery to the latter. Nothing prevented Mrs. Hyatt from at any time suppressing the contract, and Mrs. Hammell's enfeebled mind and impaired memory would have been useless in support of any attempt to assert rights under it. Had the contract for support been bona fide, it should have been so referred to in the deed that the grantee could have been bound by it. But this agreement to support, which was wholly executory, was not only omitted from the deed, but it is doubtful if it ever was delivered. Mrs. Hyatt, in her answer, alleges that she has possession of it, and tenders its production. She did produce it at the hearing. She had it always in her power to have suppressed it. Such a retention was. in Mott v. Mott, 49 N. J. Eq. 209, 22 Atl. 997, held to be a fraud, and it was declared that the omission of such a contract from the deed is of itself a badge of fraud, upon the broadly equitable ground that it is the duty of one occupying the position of a care taker, who makes a contract with one dependent upon him for protection, to see that the consideration which is to proceed to the weaker party is secured as fully and as perfectly as that which passes to the care taker.
That there was an attempt to give to the transaction now in dispute a commercial character is shown by the actual payment of the nominal consideration of one dollar. But this unusual payment is of itself an indication of a purpose to give color to the matter, which, it was felt by those conducting the business, it would not otherwise have. That the alleged bargain was greatly to Mrs. Hammell's disadvantage is plainly apparent. At the time the arrangement was made, Mrs. Hammell had support and maintenance from her son, without charge, and Mrs. Hyatt knew this, because an inquiry was made in her presence, before the attorney, whether the son might not make a claim for supporting his mother. I am constrained to believe that Mrs. Hyatt knew that Mrs. Hammell had lived happily with her son. She knew that Mrs. Hammell, at the time the deed was made, was utterly dependent upon her for care and protection. Yet Mrs. Hyatt accepted from Mrs. Hammell a deed, by which she conveyed to Mrs. Hyatt the fee of all the land she had, ostensibly in payment for a support, which she was getting for nothing from her son.
Another indication that it was Mrs. Hyatt's, and not Mrs. Hammell's, purpose which controlled the situation, is given when the events subsequent to the lawyer's interviews with Mrs. Hammell are considered. Mrs. Hammell, in that interview, is reported to have declared, when asked what she wanted done with her property,—whom she wanted to have it,—that "she wanted her daughter, Mrs. Cominsky, of Baltimore, to have the $1,000 bond when she died, and she wanted her niece, Mrs. Hyatt, to have the property on Locust street." Mrs. Hyatt got the deed for the Locust street house, but no provision was ever made to give the bond to Mrs. Cominsky.
There was some inquiry as to legal steps to recover the personalty, which was directed by Mrs. Hyatt (in Mrs. Hammell's name) to be stopped, on the excuse that she had no money. But the lawyer testified that he offered to negotiate a mortgage on the property to raise the necessary money for prosecuting the case, but this Mrs. Hammell, Mrs. Hyatt being present, declined to do. No demand was ever made upon the son to deliver over the bond or the personal property, or that he stop collecting the rents. In short, the situation opened to the lawyer as a consultation about Mrs. Hammell's property resulted solely in securing to Mrs. Hyatt her deed for the Locust street house. Before consultation and the making of the deed, Mrs. Hammell got the rents, though she believed her son was getting them. After the deed was made, Mrs. Hyatt (though very unwillingly) herself testifies that Mrs. Hammell continued to collect them. This was directly in the face of the effects of both the deed and the agreement, for the deed gave the rents to Mrs. Hyatt, and the agreement only provided that Mrs. Hammell should have the net income after payment of taxes, etc. Before the consultation the son had custody of the bond, and, if his mother did not collect the interest, he drew it for her. After the consultation he continued to do just as he had done before. Nothing was done to relieve Mrs. Hammell from the injuries she was supposed to be suffering by reason of the grievances opened to the lawyer. She, in her inability to comprehend the situation of affairs, went on happily collecting her rents, the same as if she had made no deed. Her consciousness was unaffected by the transaction, which made no outward and visible change in her ownership of the property. Mrs. Hyatt went with Mrs. Hammell when the latter collectedthe rents, after the deed was made, when she knew Mrs. Hammell was not entitled to take them, but made no effort to explain to Mrs. Hammell that since making the deed she had no right to the rents. The weight of the evidence shows that Mrs. Hammell, in her enfeebled condition of mind, was wholly dependent upon Mrs. Hyatt, who was bound to care for and protect her, and that the latter obtained the deed in question by a fraudulent assent to Mrs. Hammell's action while under a false belief, and for a consideration executory in its character, which Mrs. Hyatt retained the power to avoid. The action of Mrs. Hyatt was a fraud and an imposition upon Mrs. Hammell, which makes void the deed so obtained. I will advise a decree in conformity with the views above expressed.