Court Opinion

ID: 9453000
Source: CourtListenerOpinion
Date Created: 2023-08-04 17:59:09.682864+00
Date Added: 2024-06-11T17:33:27.198172
License: Public Domain

HILL, Circuit Judge
(dissenting):
I am compelled to disagree with my distinguished associates. A careful review of the entire record before us leaves me with a firm and definite conviction that not only has a mistake been made by the very able trial judge but it is my feeling that a gross miscarriage of justice has taken place.
The evidence relied upon by the trial court and by the majority is actually trivial and inconsequential as compared with the undisputed medical testimony in the record as to the mental competency of Cundiek to comprehend and understand the nature of the transactions in which he was involved.
Viewing all of the evidence adduced by appellee in a light most favorable to him, I cannot say that it meets the test of substantial evidence and I must conclude that it actually has little or no probative value. Much of this evidence pertains to the “mouthing” or separating of sheep by Cundiek in the consummation of the deal. Five witnesses testified about this matter. One such witness admitted he did not have an opportunity to observe Cundick’s ability to handle detailed business transactions. Another testified about mistakes made by Cundiek in performing this simple “mouthing” operation. To me, none of this evidence even vaguely approaches the crucial issue of mental competency. Another Broadbent witness, an 89 year old lawyer from Evanston, Wyoming, admitted he “didn’t have any occasion to make any observation about Cundick’s ability to conduct his own business.” The concluding evidence on behalf of Broadbent came from the deposition of lawyer Mark, who had prepared the legal documents' in connection with the transaction in question. The fact that Mark testified only by deposition precludes the application of the rule that because of the trial judge’s opportunity to observe and hear a witness personally testify, he is in a much better position to evaluate such testimony than is an appellate court. In this case, so far as the testimony of Mark is concerned, we are on an equal footing with the trial court and free to make our own independent evaluation. Mark was not asked to express his opinion as to the mental competency of Cundiek. From all four corners of Mark’s deposition it *165is plain that Mrs. Cundick, not Mr. Cundick, was the one actively participating in the conferences with Mark, and the one who was actually handling the consummation of the sale to Broadbent. What little participation is shown by Mr. Cundick was only through the guiding hand of Mrs. Cundick or Mark. This conclusion goes also to every act shown by the evidence to have been performed by Cundick in furtherance of the sale.
The one page longhand written agreement between Cundick and Broadbent was undisputedly written by Broadbent with only the two contracting parties present. It is significant to me that after every event that transpired in performance of the contract to sell, Cundick was relying upon another person for directions as to what he should do.
Both the trial court and my brothers seem to put some stress upon Mrs. Cundick’s participation in the transaction. To me, what she did or said is immaterial. She is actually a stranger to the transaction and her mental competency and understanding of the import of what was taking place cannot be a substitute for the required mental competency and understanding on the part of Mr. Cundick. The same may be said as to the materiality and importance of the testimony of lawyer Mark.
The trial court made no specific finding as to the mental competency of Cundick as of the date of the contract but did find generally “The acts and conduct of Cundick between September 2, 1963, and the middle of February, 1964, were the acts, conduct and behavior of a person competent to manage his affairs and cognizant of the effect of his actions.” To me, there is no evidence in the record to support this sweeping finding. The evidence, as I have pointed out, shows without contradiction that during the above period of time every pertinent act by Cundick was performed under the guiding hand of either his wife, his lawyer or some other person.
The opinion of the majority accurately reflects the expert testimony adduced by appellant on the issue of the mental competency of Cundick to make the questioned contract. It was positive, convincing and undisputed. Under the law of this Circuit the trial judge was compelled to honor it.1 Upon his failure to follow these cases, we should reverse.
Finally, on the question of whether Broadbent, in a legal sense, overreached Cundick, the evidence is uncontradicted that he did.
The evidence as to the true value of the property covered by the contract is uncontroverted. The 2252 acres of land involved sold for $39,510.00. A qualified expert on land values in the vicinity fixed the value at $86,189.00. Cundick’s interest in Uinta Development Company sold for $46,750.00. Witness Spaulding for appellee testified this interest had a value of $73,743.45 and the three witnesses for appellant valued it at $184,-358.63, $105,491.38 and $184,358.63. It is noteworthy that within a year after the date of the contract a dividend of $20,000.00 became payable upon Cundick’s interest in the company and that Broadbent was one of the directors of Uinta on the date of the contract of sale and was in a position to have special knowledge about the company affairs and the value of its stocks.
It is well recognized by the authorities that transactions by a person of weak understanding are subject to close scrutiny. This principle recognizes the fact that advantage could quite easily be taken of such people. Therefore, evidence of weakness of mind and circumstances showing unfair dealing and inadequacy of consideration may present a situation *166where transactions taken should be rescinded. Williston, Contracts, § 256; 23 Am.Jur., Fraud and Deceit, § 15; 17 C.J.S. Contracts § 133(1). The majority recognizes this principle but does not, I feel, apply it to this case. It has been clearly established here that even if Cundick was not incompetent he was in a weakened mental condition. The gross inadequacy of the consideration was set out above. These factors clearly establish the basis for the application of the above principle. A strikingly similar case occurred in Colorado where an elderly rancher was persuaded by a person with whom he had had frequent livestock transactions to sell his ranch and cattle, having a worth of approximately $20,-000.00, for about $8,000.00. Although the trial court found, on the basis of psychiatric evidence taken after the sale, that the rancher was incompetent, an alternative basis for the decision was: “Even though a mental condition may not amount to legal insanity, it may be sufficient to result in an inequality between the parties properly to be considered in connection with circumstances of unfair dealing and inadequacy of the consideration in determining whether a transaction vitiated by fraud, either actual or constructive.” Ruffini v. Avara, 121 Colo. 567, 220 P.2d 355 at 358. It is significant to note that no mention was made of whether the purchasers had any knowledge of the seller’s lack of capacity. The court felt that “the circumstances [of the sale] in themselves would seem to indicate a lack of capacity to manage property # * Ibid. I believe the instant case fits within the above quoted principle.
It is inconceivable to me that any mentally competent person, with a lifetime of experience as a successful and substantial rancher and stockman, would dispose of his ranch interests at a price equal to less than one-half of the actual value. I would reverse and direct the entry of judgment in favor of appellant as prayed for.

. Stafos v. Missouri Pacific Ry. Co., 10 Cir., 367 F.2d 314; Browning v. Crouse, 10 Cir., 356 F.2d 178, cert. denied, 384 U.S. 973, 86 S.Ct. 1864, 16 L.Ed.2d 683; Potucek v. Cordeleria Lourdes, 10 Cir., 310 F.2d 527, cert. denied, 372 U.S. 930, 83 S.Ct. 875, 9 L.Ed.2d 734; Nicholas v. Davis, 10 Cir., 204 F.2d 200.