Opinion
No. 3370.
Decided January 5, 1943.
On a bill in equity by the conservator of a vendee to obtain a return of the purchase price of a sale made prior to the conservatorship and allegedly made when the purchaser was mentally incompetent, a finding of incompetency having been made, the further finding that the defendant-seller in ordinary care would have been aware of such incompetency is immaterial. Though equity will order restoration when a contract with a mental incompetent has been executed, even if the consideration is fair and even if the other party has acted in good faith, the contract will not be voided unless restoration is possible. Hence in such case it is unnecessary to rule upon the sufficiency of the evidence to sustain a finding of the seller's due care, if the finding implied by the decree that restoration is possible can be upheld. A finding of a person's mental incompetence is a finding of fact; a state of mind is a fact as a matter of reality as much as any physical condition. An interpreter acts as agent for both parties in an interview between them and his translations are not excluded by the rule against hearsay. The appointment of a conservator demands no application of the statutory rules (R. L., c. 392, ss. 25, 26) excluding the surviving party from testifying and excluding testimony of the opposite party where the guardian of an insane person is a party. Conservatorship determines the status of the person under it as of its date, not as a mental incompetent but as "being unfitted by reason of infirmities of age or any other mental or physical disability" to manage his affairs prudently and understandingly; and such appointment implies no incapacity of such person to testify. Unwise and imprudent undertakings are relevant to show mental incapacity, for the greater the improvidence the nearer is the approach to incapacity. A finding of mental incapacity was reasonably made on the testimony of a person's personal physician, the finding being also based upon the excessive purchase price. The ability of the seller-defendant in such case to return the purchase price cannot be inferred merely from the fact that three months prior to the trial he received a money payment of nine-elevenths of the purchase price, in the absence of all evidence that his general resources are sufficient to perform the decree. In such suit though no evidence appeared of the defendant's ability to return the purchase price the failure of the plaintiff to establish that issue does not compel dismissal of the bill. Justice requires that upon the defendant's request a decree for the plaintiff be entered for the difference between the price paid for the property and its value as found, with credit for the mortgage debt if the defendant has not assigned it. The statute (R. L., c. 370, s. 13) requiring that where all issues are tried by the court it shall on request of a party make its decisions in writing and shall state the facts found and rulings of law, requires in respect to facts a report of only essential findings supporting the decision; and it is the facts that are to be reported and not the evidence.
BILL IN EQUITY, for the return of the purchase price of real estate in Nashua conveyed to the plaintiff prior to the appointment of the conservator.
The court (Blandin, J.) found that she was "not mentally competent" to make the purchase, that the purchase price was $2,000 above its "real value" of $3,500, and that the defendant in the exercise of ordinary care would have learned that she was thus incompetent. He owed her no fiduciary duty, exercised no undue influence over her, and was put on no "special inquiry regarding her mental condition." A decree was entered that the purchase price be returned by the defendant upon the reconveyance to him of the property.
The defendant excepted to the denial of his motions for a dismissal of the bill, and took other exceptions stated, so far as material, in the opinion, which also states further facts.
Edward J. Lampron, for the plaintiff.
Karl E. Dowd and Hamblett Hamblett (Mr. Robert B. Hamblett orally), for the defendant.
I. The statute (R. L., c. 370, s. 13) requiring that in a case in which the Superior Court tries all issues, the decisions, on request of either party, shall be in writing and shall state the facts found and rulings of law, demands, in respect to facts, only essential findings supporting the decision, ". . . it is the facts that are to be reported and not the evidence" (Burnham v. McQuesten, 48 N.H. 446, 451), and no summary or statement of the evidence on which the findings are based is directed. If the conclusions on the issues of fact on which the decision is based are reported, it is enough. These conclusions have been found or are necessarily implied by the decree. No question of requests for special findings is here presented.
The defendant's position that the finding of the plaintiff's mental incompetence was "a mere statement of a conclusion" and "not a finding of fact" has no merit and deserves scant notice. A state of mind is a fact as a matter of reality, as much as any other physical feature. If it is the "announcement of a standard," it is a finding of fact that the standard has been attained.
He also presents, in support of this branch of the case, the court's failure to be specific in striking out a portion of a witness' testimony. Granting the obscurity of the ruling in showing division between the testimony retained and that stricken out, the issue is not one of fact but of the effect of a ruling. The evidence retained depends upon the construction to be given the ruling, to be later considered.
II. The plaintiff's mental incompetence having been found, the finding that in ordinary care the defendant would have been aware of it is immaterial. Equity will order restoration when a contract with a mental incompetent has been executed, even if the consideration is fair, and even if the other party has acted in good faith. As usually stated, the contract will not be voided unless restoration is possible (Young v. Stevens, 48 N.H. 133, 137; 46 A.L.R. 416, and 95 A.L.R. 1440, Anno's. and cases cited; Pomeroy, Eq. Juris., s. 946), but if restoration can be made, equity does not have occasion to restrict the application of the common-law rule requiring that competent minds must agree in the formation of a valid contract. It, therefore, becomes unnecessary to rule upon the sufficiency of the evidence to sustain the finding of the defendant's care. If the findings of mental incompetence and value, and the finding necessarily implied by the decree that restoration is possible, may be upheld, the decree is valid.
III. Upon the issue of the sufficiency of the evidence to prove the plaintiff's mental incompetence, a preliminary question arises of what part of the testimony of the specialist who examined the plaintiff was stricken out. The order seems unfortunate, as based upon an apparent misunderstanding of the rule against hearsay evidence in application to conversations carried on through an interpreter. Since the interpreter acts as agent for both parties in an interview between them, his translations are not objectionable under the hearsay rule (Commonwealth v. Vose, 157 Mass. 393; 116 A.L.R. Anno. 800, IV 803). In construction of the order, taking into account the apparent reason for it, whatever the plaintiff told the specialist through the interpreter was rejected, as well as what he learned from any source of the history of the plaintiff's condition. Since his opinion was in substantial measure based upon these features of his examination, it also is considered to have been stricken out. The testimony of "his personal observation" of the plaintiff alone remains.
It also seems unfortunate that the court did not have the benefit of the testimony of the parties. They were both present at the trial and so far as appears both might have testified. The appointment of a conservator over the plaintiff's estate was no ground for invocation of the statute (R. L., c. 392, ss. 25, 26) relating to testimony of a party when the other party is a representative of an estate or a guardian of an insane person. The appointment determined the plaintiff's status as of its date, not as a mental incompetent, but as being "unfitted by reason of infirmities of age, or by other mental or physical disability," to manage her affairs "with prudence and understanding," R. L., c. 343, s. 16. The conservator has no custody or control of her person, but only is in charge of her estate, Ib., s. 17. The appointment assumed no incapacity of the plaintiff to testify.
The result is a record mainly confined to the testimony of the plaintiff's regular physician. In passing upon the question whether the evidence warrants a reasonable conclusion of incompetency to engage in the transaction, the problem is the frequent one of a narrowly drawn application of a simple test, which here is that of capacity to transact business "like that in question" (Upton v. Company, 81 N.H. 489, 490, and cases cited; Harvey v. Provandie, 83 N.H. 236, 239, 240).
The record permits a view of a widow of about sixty and living alone. Her husband died nearly two years before the transaction here in question. She is suffering from an early and progressive old age breakdown physically and mentally, the impairment of her mental faculties being largely the result of her physical troubles. She is neurotic, emotional, worrying, has frequent dizzy spells and her memory is affected. She has been under her physician's care since a time about six months prior to the transaction in question, and has had some hospital treatment when specially upset, as well as sedatives from her physician. After she bought the property she did not recall how she happened to do so. What her business experience had been did not appear, nor was there any evidence of the circumstances of the purchase. Her physician considered her incapable of doing business at a time six months prior to the transaction, and in effect that her condition underwent no improvement. The appointment of a conservator soon after the transaction threw no light upon her capacity to engage in the transaction, and there is no presumption that the court gave it any weight in that respect.
The defendant urges that the excessive price she paid for the property is no evidence of incompetency. With due allowance for the wide range of opinion on an issue of value, the court's finding, as a final fact rather than as a final opinion, justified its consideration on the issue of competency. The relevancy of unwise and imprudent undertakings in their bearing on one's mental state is not doubtful. The greater the improvidence, the nearer is the approach to incapacity. If alone indecisive, it may be taken into account with other evidence.
The character of the transaction on the plaintiff's part as one of improvidence or incompetence is not clearly shown and the line between folly and incapacity is not sharply defined. Broad scope to a finding based upon opinion must be allowed, short of entrance into surmise and speculation. General knowledge may aid to make reasonable forecasts (Vallee v. Company, 89 N.H. 285, 289), and likewise it may assist in a reasonable conclusion of mental state. If in the process of weighing the evidence in a case like this the scales must be less accurate than in cases where the evidence is more concrete, the reading may yet be one of probabilities. Inferences from subjective tests are not unreasonable because less positive than those of objective assays. It is thought that the finding of incapacity could reasonably be made.
IV. On the issue of the defendant's ability to repay the purchase price, the defendant must prevail. No evidence to support the finding is found. The fact that the trial took place about three months after he received money payment of nine-elevenths of the purchase price is not enough to show that he retained it, and there is no evidence of his general resources sufficient to enable him to perform the decree.
But the failure of the plaintiff to establish this issue does not entitle the defendant to a dismissal of the bill. Equity having general jurisdiction of the proceeding, and the transaction having been set aside, the plaintiff is entitled to relief "upon such terms as justice to both parties requires" (Newton v. Tolles, 66 N.H. 136, 139) "down to the close of the litigation between the parties" (Manchester c. Co. v. Conn, 80 N.H. 455, 461). The decree may be modified upon the defendant's request by substitution of a judgment for the plaintiff for the amount of the difference between the price paid for the property and its value as found, with credit for the mortgage debt if the defendant has not assigned it.
V. Whether, in view of the errors of law herein pointed out, on motion of either party a new trial might in justice be granted, or whether the law of the trial adopting the errors is a bar to such a motion, is an inquiry upon which no views are expressed.
Case discharged.
All concurred.