Case Name: OMEGA INV. CO. v. WOOLLEY et al. (COWLEY et al., Interveners)
Court: Utah Supreme Court
Jurisdiction: Utah
Decision Date: 1928-05-21
Citations: 72 Utah 474
Docket Number: No. 4509
Parties: OMEGA INV. CO. v. WOOLLEY et al. (COWLEY et al., Interveners).
Judges: THURMAN, C. J., and CHERRY and GIDEON, JJ., concur.
Reporter: Utah Reports
Volume: 72
Pages: 474–535

Head Matter:
OMEGA INV. CO. v. WOOLLEY et al. (COWLEY et al., Interveners).
No. 4509.
Decided May 21, 1928.
(271 P. 797.)
On Motion for Rehearing November 20, 1928.
Arthur Woolley, of Ogden, and H. S. Tanner and J. Louis Brown, both of Salt Lake City, for appellants.
Wilson & Barnes and E. A. Walton, all of Salt Lake City, for respondent.

Opinion:
BATES, District Judge.
This action -was brought to recover 465,701 shares of the capital stock of the Nathaniel Baldwin Incorporated, a corporation hereafter referred to as the Incorporated. The respondents claim that the stock in question belonged to the plaintiff, Omega Investment Company, and that it was transferred to the other defendants by the defendant, the Incorporated, by virtue of fraudulent practices and undue influence exercised by said defendants upon Nathaniel Baldwin, who was the principal stockholder of the plaintiff corporation and of the Incorporated.
It is admitted by the defendants that the stock in question was transferred to them as alleged, but they deny that the transfer was because of fraud or undue influence, and affirmatively allege that the transfer of the stock was supported by a valuable consideration after careful deliberation by Baldwin, who acted in said transaction upon the advice of other disinterested persons.
Pleadings on the part of the plaintiff and Nathaniel Baldwin, as intervener, set out in detail the facts and circumstances constituting the confidential relations, fraudulent practices, and undue influence claimed to have induced the transfer of the stock, but it is unnecessary to recite the allegations in detail in this opinion. The findings of the court are full, and, in general, conform to the allegations of the complaint. Judgment was rendered directing the return of the stock to the plaintiff, and should be sustained, if the proof offered can be said to establish the facts pleaded and found by the court.
The doctrine has been frequently announced by this court that in equity cases, unless we are convinced that the trial court was clearly wrong in his findings, the judgment must stand. Hoggan v. Price River Irrigation Co., 61 Utah. 547, 216 P. 238. For several weeks the trial court listened to the witnesses in this case, observed their demeanor, their frankness and candor, or the want of it, and was undoubtedly influenced by the observations so made and the impressions so gained in arriving at a conclusion as to what the findings of fact should be.
The following facts offered in support of, and tending to prove, the allegations of the plaintiff's complaint and the complaint in intervention of Nathaniel Baldwin, are fairly established by the evidence in the record:
Nathaniel Baldwin was, at the time of the trial, about 47 years of age, fairly intelligent, being a mechanical genius, and having spent most of his life along electrical inventive lines. About the year 1914 he invented, and in a small way began the manufacture of, telephonic and radio equipment. His business grew and increased until the year 1922. At that time he was making about 150 sets per day, having a value of several hundred dollars. In 1922 he caused the Nathaniel Baldwin Incorporated to be organized, and conveyed and transferred to it the manufacturing plant, equipment, and other property used by him in connection with the manufacturing business. This was the only property of which the company became the owner of.
Defendants Lorin C. Woolley, Clyde Nielson, John T. Clark and H. S. Tanner had been associated with Baldwin for some time prior to that, and, as a result of their associations and labor with him, he had placed confidence in them, consulted with them, employed them, and depended upon them as ad-visors and agents in the carrying on and development of his business. To these men he caused to be issued small blocks of stock in the Incorporated, made them directors, and consulted and advised with them relative to the management of his affairs.
Almost immediately after the Incorporated was organized, Baldwin also organized the Omega Investment Company. He transferred to it the greater portion of his stock in the Incorporated, and issued to Nielson, Clark, Tanner, Lorin C. Woolley, and a few others, small blocks of stock in the plaintiff company. They advised and consulted with Baldwin as to the management of its affairs, and he undoubtedly relied upon, and placed confidence in, their advice and judgment. Nothing was' paid by any of these parties for their stock in either of the corporations. The record is clear that they held it subject to the will of Baldwin, and in most cases, if not all, executed options authorizing him to repurchase at half its value at any time he desired.
During the year 1923 financial difficulties developed. A contract had been entered into and assigned to the Baldwin Radio Company out of which litigation had developed, involving a great many thousands of dollars. Baldwin was greatly concerned because of this litigation and other financial troubles. Lorin C. Woolley, a cousin of the defendant, Ernest Woolley, in the early part of 1924, told Baldwin of Ernest Woolley; that Ernest Woolley had great ability as a lawyer, and that he could manage law matters; that he was able to cope with almost any kind of opposition; and that in his way in legal matters he was superior to anybody in the West. Baldwin became convinced that Woolley would be of great assistance to the company, and went to see him. Woolley evinced a great interest in Baldwin's business, spoke of the amount that could be made if it were handled right, expressed a desire to get to sell the goods, and his interest in the litigation pending. From that time on Woolley and Baldwin were in frequent consultation with reference to the Baldwin business. The place of transacting business was transferred to the offices of Ernest Woolley, where Baldwin and the directors met almost daily and consulted with each other and with Ernest Woolley with reference to the business affairs of the Baldwin companies.
In January or February of 1924 Baldwin employed Woolley to secure a settlement of the pending litigation with the Baldwin Radio Company, paying him therefor the sum of $1,500. At that time, Woolley said he could help materially; that he would he glad to do so, and guaranteed that Baldwin would be satisfied with the results. Baldwin permitted Woolley to proceed to an adjustment of that litigation without consulting with, and without the knowledge of, counsel of recognized ability who were representing Baldwin in court. An agreement of settlement was reached in the month of September, 1924, and the action finally dismissed on the 24th day of December of that year.
In the month of August, meetings between Woolley, the directors, and Baldwin became more frequent. The Baldwin companies were in need of money, and Woolley proffered to secure it in various sums ranging from $20,000 to $50,-000. He was constantly giving Baldwin advice and instructions, and Baldwin relied upon Woolley as an advisor and adjuster. Baldwin's testimony as to his confidence in Wool-ley is illustrated by the following quotation from the abstract :
"I learned to look upon him as a master mind that could comprehend great things easily, take them all in, understand them, a master mind in matters of business and law. My confidence in Ernest Woolley as master in these matters and also as a good man, which I was led to believe that he was, and an honest man, continued until some time in the spring of 1925. Then doubts began to creep in because of things that happened, and my confidence in him as an honest man failed."
It is fairly apparent from the record that Woolley continued to act as the confidential advisor of Baldwin, at least until the 24th of December, 1925, at which time the proposal for the transfer of the stock in question was made. On that date Woolley proposed to him that he cease acting merely as an advisor and that he be made an equal owner in the business.
On the 24th of September, 1924, Woolley secured from the Incorporated what is known as the infringement contract, which, on its face gave him full power to bring suits upon, and adjust, under such conditions as he desired, all cases of infringements upon Baldwin patents, and to retain 75 per cent of all moneys received in making such adjustments by suit or otherwise. On the 27th of September another agreement, known as the sales agency agreement, was entered into whereby Woolley was given exclusive right to sell all the products manufactured by the Incorporated. The instrument provided that Woolley pay 44 per cent of retail prices when the goods were delivered to him. About the 2d of October, Woolley made demand that all the finished products be turned over to him. He told Baldwin that he would be able to raise the money to meet the pay roll immediately when he got the goods. Baldwin directed the delivery of the goods, valued at $100,000, and Woolley took control, but without the payment of the price as agreed upon, either upon delivery or at all. On the 7th of October Woolley secured a modification of the sales agency agreement providing that payments be made at list price, less trade discount of 60 per cent, 2 per cent 10 days, net 60 days. At that time several thousand dollars were due from the company to employees and others. Payment was being demanded, under threat that, unless payment was made, the business would be thrown into the hands of a receiver. Woolley promised that he would pay within four days, but this he did not do. On the 8th of October, 1924, a receiver was appointed, and took possession of the property of the Incorporated. On November 14th Woolley secured another contract wherein it was provided that the entire plant, equipment, materials on hand and manufactured products should be sold to him for the inventory prices of the receiver. Woolley agreed to pay that amount within 30 days, but did not do so.
The receiver, in .making up the inventory, listed it from the viewpoint of what it would turn under forced sale as an insolvent concern. The real estate and machinery was inventoried at $40,000. At the time of the trial, the receiver valued the same property at $124,000, or 70' per cent of the book value. Instead of disposing of the property at forced sale, the plant was operated by the receiver successfully and profitably, and, as a liquidating concern, he says the value materially increased.
During the latter part of November and the month of December, until just prior to the 24th, Ernest Woolley was in the East, attempting to secure money with which to take the property out of the hands of the receiver and refinance it. On the 24th Woolley told Baldwin he was unable to have the proper influence with people with whom he was trying to raise money because he could not speak with authority, and said that, if he could have an equal interest in the business, and be appointed vice president, he would be in a position where he could say "yes" or "no" instead of being a go-between, and that he would get something done. He proposed that he be made an equal owner in the Baldwin companies. The defendant directors favored giving him the stock, Tanner saying he thought it was the best thing to do under the circumstances ; that he knew it was a sacrifice, but he did not believe Ernest would take it under other conditions. The directors told Baldwin they thought it was the only thing to do. They spoke of the great danger the company was in, and said Woolley was the only man who could get it out. Under this continued pressure, Baldwin yielded to the proposition. Baldwin testifies that he was carried by the influence of others to make the move, but consented to it because all the other directors that were present were urgently in favor of it. Baldwin testified the conditons for which the stock was divided was that the business would be successfully handled, debts paid, receivership terminated, and adversaries overcome; that the contracts referred to should be surrendered so that they would stand as if there were no contracts; that Woolley said he would surrender them all.
The contract of September 27th with its modifications and the agreement for the sale of the property dated No vember 14th were delivered to John T. Clark, one of the directors, to be held until the termination of the receivership and then delivered to the Incorporated. The contract of September 24th, known as the infringement contract, was not delivered, Woolley insisting that it was not part of the agreement or consideration for the transfer and assignment of the stock, but the court specifically found against him on that point, holding that the contract was included in the agreement, and that Woolley failed to surrender it.
It is insisted by counsel for the defendants, and we think rightly, that this action is in effect a suit by Nathaniel Baldwin against Ernest R. Woolley. The Nathaniel Baldwin Incorporated was organized by Nathaniel Baldwin for the purpose of carrying on his business in a corporate name. He is the only person who contributed to its assets. Some stock was issued by the corporations to a few other persons, but they paid nothing for it, and in all but one or two cases gave Baldwin a right of repurchase for considerably less than its face value. The directors of the company all felt it their duty in the performance of their official duties to consult the will of Nathaniel Baldwin, and did it. Baldwin intentionally retained such control that, if any person did not concede to his wishes, he could remove him and appoint another. No stockholder has appeared in this action, excepting those who are either concededly with Baldwin and acting for his interests, or have associated themselves with Ernest R. Woolley, and who insist that their interests are his interests. The same conditions exist with reference to the plaintiff corporation. It is Baldwin's corporation, organized under his direction for his own benefit. The directors thereof, until the final breach, acted under his direction. They voted according to his wishes. Their stock was held under option to repurchase by Baldwin, and, if they did not act agreeably to his wishes, he held the power to demand their resignation, and did not hesitate to use it.
The Nathaniel Baldwin Sales Company was organized under the direction of Ernest R. Woolley with 10,000 shares of capital stock, having no par value. Woolley took 1,000 shares, three others one share each, and Royal B. Young 8,997 shares. It was organized three days after the contract known as the sales agreement was entered into by Woolley with Baldwin. On the 11th of October, 1924, only eleven days after the organization, Woolley stated to the directors that he had received no compensation for securing the contract with Nathaniel Baldwin Incorporated, and that large obligations had been incurred, and requested that they assign the contracts to him in consideration of his releasing the company from liability for personal services, organizing a Delaware corporation, assigning the contract to it, and holding the stock as his personal property. The assignment was promptly made by the directors without other consideration, and the Delaware corporation was formed. Woolley insists that he immediately thereafter, in violation of his promise, transferred or had issued to William Hudson the greater part of the stock of the Delaware company, but the preponderance of the evidence is to the effect that Woolley was in absolute control of the defendant Nathaniel Baldwin Sales 'Company of Delaware.
The corporations are all one-man corporations, and Baldwin and Woolley were undoubtedly doing business with each other personally under corporate screens. It was in effect their business, and this lawsuit is in effect between them personally.
There can be no question but that the trial court was justified in drawing the conclusion that a fiduciary relation existed between Baldwin and Woolley at the time the stock in question in this case was transferred. In fact, no other conclusion can reasonably be drawn. Woolley came into the employ of Baldwin as an agent to settle important litigation that was not finally and completely settled until the day the negotiations for the transfer of the stock began. From the time of Baldwin's acquaintance with him in January of 1924, he constantly manifested an interest in Baldwin's welfare, permitting his office to become the center of discussions with reference to the Baldwin interests. He proffered and endeavored to secure moneys to overcome the financial necessities, advised and conferred with him, and in every action so conducted himself as to induce Baldwin to believe that Woolley was constantly working for Baldwin's welfare.
"A confidential relation exists when confidence is reposed by one party and a trust accepted by the other, when a confidence has been imposed and betrayed, or when influence has been acquired and abused. It embraces both technical and fiduciary relations and those informal relations where one man trusts in and relies on another." Dale v. Jennings, 90 Fla. 234, 107 So. 175.
It is true that Baldwin cannot be considered mentally weak. He was at the age of life when men are usually best able to protect themselves, and had had some experience as a business man in the world. But that is not controlling in determining whether a confidential relation exists or whether undue influence is used. The question in all cases is whether influence is acquired and abused or confidence is reposed and betrayed.
"Where there is no coercion amounting to duress, but a transaction is the result of a moral, social, or domestic force exerted upon a party, controlling the free action of his will and preventing any true consent, equity may relieve against the transaction, on the ground of undue influence, even though there may be no invalidity at law. In the vast majority of instances, undue influence naturally has a field to work upon in the condition or circumstances of the person influenced, which render him peculiarly susceptible and yielding, — his dependent or fiduciary relation towards the one exerting the influence, his mental or physical weakness, his pecuniary necessities, his ignorance, lack of advice, and the like. All these circumstances, however, are incidental, and not essential. Where an antecedent fiduciary relation exists, a court of equity will presume confidence placed and influence exerted; where there is no such fiduciary relation, the confidence and influence must be proved by satisfactory extrinsic evidence; the rules of equity and the remedies which it bestows are exactly the same in each of these two cases.
"The doctrine of equity concerning undue influence is very broad, and is based upon principles of the highest morality. It reaches every case, and grants relief 'where influence is acquired and abused, or where confidence is reposed and betrayed.' It is especially active and searching in dealing with gifts, but is applied, when necessary, to conveyances, contracts, executory, executed, and wills." 2 Pomeroy, Equity Jurisprudence, § 951.
The confidential relation being- shown to exist, the burden devolved upon Woolley to show that, in the making of the transaction, the fullest and fairest explanation and communication was made to Baldwin of every particular in Woolley's breast; that the transaction itself was fair, and the consideration paid therefor adequate, before a court is justified in permitting the transaction to stand.
While equity does not deny the possibility of valid transactions between the two parties, yet because every fiduciary relation implies a condition of superiority held by one of the parties over the other, in every transaction between them by which the superior party obtains a possible benefit, equity raises a presumption against its validity, and casts upon that party the burden of proving affirmatively its compliance with equitable requisites, and of thereby overcoming the presumption.
"Wherever two persons stand in such a relation that, while it continues, confidence is necessarily reposed by one, and the influence which naturally grows out of that confidence is possessed by the other, and this confidence is abused, or the influence is exerted to obtain an advantage at the expense of the confiding party, the person so availing himself of his position will not be permitted to retain the advantage, although the transaction could not have been impeached if no such confidential relation had existed. Courts of equity have carefully refrained from defining the particular instances of fiduciary relations in such a manner that other and perhaps new cases might be excluded. It is settled by an overwhelming weight of authority that the principle extends to every possible case in which a fiduciary relation exists as a fact, in which there is confidence reposed on one side, and the resulting superiority and influence on the other. The relation and the duties involved in it need not be legal; it may be moral, social, domestic, or merely personal." 2 Pomeroy, Equity Jurisprudence, § 956.
We do not think the record in this case shows a compliance with these requirements. That Woolley believed he gained an advantage by the transfer of the stock in question is perhaps best evidenced by the earnestness with which he has endeavored in this litigation to retain the results of the transaction. In fact, his counsel recognize that it was advantageous to Woolley, and attempt to justify on the ground that no confidential relation existed, and that Baldwin cannot complain merely because he was outtraded.
There is evidence in the record to show the value of the property as an insolvent concern on the 8th of October, 1924, but there is nothing to show its condition or value on the 27th of December when the transaction complained of was completed. Neither does the record disclose the value on November 14th when the agreement of sale was entered into. The receiver valued it only as an insolvent concern, without consideration of its value as an operating business, and without consideration of the patent rights which would necessarily enhance the value of the plant. Woolley induced Baldwin to enter into the agreement of sale on the 14th of November on the basis of the inventory prices. And then, on the 27th of December, under his theory of the case, surrendered that agreement and the sales agency agreement, and its modifications, as a consideration, and the only consideration for the transfer of the stock.
The receiver, instead of selling the plant and equipment, operated it so successfully that at the trial of the case in the latter part of 1925 he estimated its value with the patent rights at approximately $1,000,000. To what extent the concern had become solvent, paid its debts, or increased its value, November 14th or December 27th, the record is wholly silent. Whether Woolley had information at that time, that Baldwin did not have, of facts that tended to enhance the value of the property, cannot be told. The burden under the authorities was upon Woolley to show that he made a full and fair disclosure of all facts within his knowledge to Baldwin and that Baldwin entered into the agreement freely and fully advised.
The rule as applied between attorney and client is well stated 'by the Supreme Court of California in Cooley v. Miller & Lux, 156 Cal. 510, 105 P. 981, as follows:
"The presumption always arises against the validity of a purchase or sale between the client and attorney made during the existence of the relation. The attorney must remove that presumption by showing affirmatively the most perfect good faith, the absence of undue influence, a fair price, knowledge, intention, and freedom of action by the client, and also that he gave his client full information and disinterested advice."
Not only was the burden placed upon Woolley to show a full and fair disclosure of all facts within his knowledge, but it was also his duty to show that the transaction was fair and equitable, and that the consideration paid was adequate.
The rule is well stated in a Utah case, as follows:
"Thus, in transactions between persons occupying such relations, in which the stronger or superior party obtains a benefit or advantage, fraud is presumed, and the burden is cast upon the superior party to show fairness, adequacy, and equity in the transaction." Peterson v. Budge, 35 Utah 596, 102 P. 211.
In Feeney v. Runyan, 316 Ill. 246, 147 N. E. 114, the court says:
"The burden was on Williams to show that the transaction was fair and equitable and that the price paid was adequate."
All of the instruments relied on by the defendant as the consideration for the transfer of the stock were executed while the relation of confidence existed between the parties, and are burdened with the presumption that they were executed as a result of undue influence and fraud without full disclosure of all facts known by Woolley, and without an adequate consideration. The same thing is true with reference to the infringement contract and all other transactions between these parties during the year 1924. No attempt was made to overcome the presumption.
The transfer of the stock on the 27th of December was the culmination of a series of transactions, all of them entered into with a fiduciary, and burdened with a suspicion of fraud and undue influence, to sustain which Woolley was bound to show fairness, full disclosure, and adequate consideration. This he did not do. The effect of these transactions was to assign to Woolley more than one-half of whatever the properties were worth on the 27th of December, 1924, as an established business in control of valuable patent rights and having a heavy demand for the manufactured product, without the contribution of one dollar in money or one dollar's worth of property, either directly or indirectly. In fact, Woolley, during the trial, made no claim of any consideration passing for the transfer of the stock, except the surrender of the purported contracts.
These transactions are not separate and distinct, but are so woven together by the ties of confidence that they must be considered as a connected whole. Each of the purported agreements was more advantageous to Woolley than its predecessor, and each of them as they were executed had the direct effect of more securely tying Baldwin's hands and making it more impossible for him to move independently. Each move gave Woolley a more dominant position, and made Baldwin more dependent on his advisor. The task of raising the money with which to get the business out of the hands of the receivership had been undertaken by Woolley, and he was looked to for this purpose almost exclusively. When he told Baldwin on the 24th that he did not have the proper influence because he could not speak with authority, but that, if he could have half the business and be made vice president, he would put the thing over big, Baldwin was in his power. He was the victim of a series of circumstances contributed to, if not created by, Woolley. It is true that Baldwin might have secured competent legal advice, and in that way have avoided the pitfalls. But the reason for his not doing so is apparent. His confidence in Woolley was so great that he accepted his advice on legal matters in preference to his regularly employed counsel. A contract entered into under such conditions between persons in a fiduciary relation should be set aside by a court of equity when it appears that the fiduciary has secured a contract advantageous to him.
The defendant urges that Baldwin talked with the directors of the plaintiff company, and they told him they thought that under the conditions it was the best thing to do, although it was a sacrifice. But that cannot save the transaction from the suspicion of fraud. From the beginning they had been associated with Baldwin and Woolley. Some of them recommended that Woolley be induced to give assistance. His influence undoubtedly reached and affected them. They were beneficiaries of the transfer of more than 30,000 shares of the stock, at least to the extent of holding the same in trust for Woolley, and from the day of the transfer have stood solidly with him. They were interested and not disinterested advisors, as equity requires. The rule of law in such cases is well stated in Hogan v. Leeper, 37 Okl. 655, 133 P. 190, 47 L. R. A. (N. S.) 475, as follows:
"Whenever there exists between parties confidence on the one hand and influence on the other, from whatever cause they may spring-, equity requires in all dealings between them the highest degree of good faith on the part of him in whom the confidence is reposed. If a conveyance is executed by the other in his favor, the burden rests upon him to prove that it was not procured by means of such confidence and influence. It is his duty, before accepting the conveyance, to see that the grantor has disinterested advice and full information."
See, also, In re Spann, 51 Okl. 309, 152 P. 68.
It is suggested 'by counsel for the defense in argument that, in addition to the surrender of the contracts and the rights acquired under them, the understanding was that, becoming interested in the business, Woolley would devote his time and efforts to it, particularly in looking after the business and financing matters, and that, under plaintiff's theory of this case, would be an advantage to Baldwin and the Incorporated of importance. Counsel says that Baldwin regarded that as the most important part of the consideration. Counsel's position so taken is squarely contrary to defendant's theory, as set out in his pleadings, but, if it should be looked upon as part of the consideration for the transfer of the stock, it furnishes only an additional reason why the transaction should be set aside. The testimony shows that Woolley Was to remove the business from the hands of the receiver. He did not do it. Neither does the record show that he did anything to aid in any way in reaching a solution of the difficulties from the time the stock was transferred to him. There is no question in the writer's mind but that the profuse promises made by Woolley induced Baldwin to think that, if Woolley became a part owner so as to have power to speak with authority, as Woolley told him, he would then be able to secure the money, get the property out of the hands of the receiver, and establish the business on a sound basis. For five months Baldwin waited. Nothing was done by Woolley.
These representations were in harmony with the whole scheme. Woolley promised to pay for the $100,000 worth of the manufactured products at the time of delivery to him, but got them without making the payment, and the undoubted result was that the business went into the hands of the receiver. He said he would raise large sums of money to pay the pressing debts with, but in each instance failed. The agreement of November 14th provided that he should pay for the plant within 30 days, but he did not do it. Then he used these former agreements, all broken and breached by him, as the basis of the stock transfer on the 27th of De cember. As additional inducement to Baldwin, be promised that, if the stock were transferred, he would put the thing over big; he would get the business out of the receivership; and that Baldwin would make more out of the half than he could out of the whole. It was a series of broken promises, each one in its turn operating to make Baldwin feel more dependent on Woolley. The final result was that Woolley held the control of the properties and patents subject to the receiver. The receiver was financing and operating the business; the debts were being paid, and the results demonstrate that the potential value of the property was great. Whatever profits were realized, Woolley would share in. If there were losses, he took no risk. Such were the advantages he hoped to gain as the results of his dealings with Baldwin in a fiduciary capacity. These are the advantages his counsel claim for him on the theory that he merely outtraded Baldwin. There was no trade; there was no exchange. Wool-ley took all for nothing from a person whom he knew had placed implicit confidence in him as a man of integrity, learned in the law, trained in the arts of finance, and loyal.
The following language of the Supreme Court of Washington in Stone v. Moody, 41 Wash. 680, 84 P. 617, 85 P. 346, 5 L. R. A. (N. S.) 799, is applicable to the facts in this case:
"Where it is to the court perfectly plain that one party has overreached the other and has gained an unjust and undeserved advantage which it would be inequitable and unrighteous to permit him to enforce, we do not believe that a court of equity should hesitate to interfere, even though the victimized parties owe their predicament largely to their own stupidity and carelessness. It is well known that many good people and people of average or greater intelligence are sometimes duped and misled by the skill, cleverness, and artifices of those who are adepts in the matter of deceiving their fellow men; and courts should not throw about schemers of this kind a protection that will tend to encourage the practice of their arts. Such people should not find encouragement in the thought that, by keeping their machinations within the letter of the law, they may find sanction for their practices and reap the reward of their craftiness. To the victim it is of little import whether his property is taken from him by a bold and forcible robbery or by an ingenious and unsuspected de ception. The injury to him is the same; and the evil effect of court decisions which permit the wrongdoer to enjoy the fruits of his chicanery is of no small import when viewed" in the light "of public policy."
The judgment should be, and it is affirmed.
THURMAN, C. J., and CHERRY and GIDEON, JJ., concur.
STRAUP, J., being disqualified, did not participate herein.