Court Opinion

ID: 9673956
Source: CourtListenerOpinion
Date Created: 2023-08-24 04:21:10.58465+00
Date Added: 2024-06-11T18:16:24.991604
License: Public Domain

BOND, Chief Justice.
This is a suit in equity, brought by plaintiffs (appellees) Ted C. O’Connor and Orval M. O’Connor by next friend T. J. O’Connor in a district court of Dallas County against L. W. Klindworth, Jose Rodriquez and Rosemond Rodriquez (husband and wife), W. L. Sterrell, Sixto Espi-nosa, Geo. V. Basham, W. W. Fair, Jr., W. M. Holland, Mary Fuller and Roy Fuller (husband and wife), J. Oran Carter, Wm. T. Sargent, Guardian Federal Savings & Loan Association of Dallas, Hexter Title & Abstract Company, Stewart Title Company, and Porter Lindsley, individually and trading and doing business as J. W. Lindsley & Company. In limine pretrial, the trial court held that the plaintiff Orval M. O’Connor was mentally competent to prosecute his suit in his own name rather than by next friend; whereupon Orval M. O’Connor for himself personally and individually, intervened by amended petition as a party-plaintiff.
In plaintiffs’ petition as amended they allege ownership (with their sister Mary Fuller, wife of Roy Fuller) of the property known in the record as the “Carlisle Street property,” hereinafter more fully described; that on or about August 2, 1946 their signatures and acknowledgments were obtained to a deed to L. W. Klindworth to said property by fraud, misrepresentation of material fact, false premise and duress, and for a “disgraceful, unconscionable, and grossly inadequate price”; and that at the time of and prior to, and at all times since the execution of the deed, the plaintiffs were and are now imbeciles, weak in mind, ignorant, illiterate and uneducated, uncouth and unreliable, with minds of small children, associating with children rather than with grown people. That plaintiffs’ minds are so deficient that they have no discretion or ability to know and realize the consequences of their act, and are unable to transact any business; that on the occasion in question they did not know and were unable to comprehend the effect of the conveyance of their Carlisle Street property, or the effect of any of the transactions in relation thereto.
The plaintiffs further allege that the defendants Jose and Rosemond Rodriquez and L. W. Klindworth, well knowing the mental status of Ted C. and Orval M. O’Connor, maliciously and fraudulently caused them to execute the deed to the Carlisle Street property, which was of the approximate value of $10,000, for the pitiful sum of $3,000; and as a part of the scheme and fraudulent transaction and in connection with said sale, sold to the plaintiffs other property, on McCoy Street in a colored section of the City of Dallas, of the approximate value of $1,500 for $6,400. That in carrying out said plan and scheme, the defendants withheld from the plaintiffs the cash consideration that would have come to. them out of the purported sale of the Car-lisle Street property, and thereafter applied: such sum to the purchase price of the McCoy Street property.
The plaintiffs further allege that the defendants, the Rodriquezs and Klindworth,. in their malicious scheme and plan to obtain the deed and possession of said property at the inadequate price, represented to. them, that the City and County of Dallas had a large judgment against their father and a lien against the Carlisle Street property amounting to more that $1,000 and, unless, they sold said property to their friend Klindworth, the City and County of Dallas would take said property away from them and they would not realize anything out of it; and, further, that if and when they sold to Klindworth, he would pay all indebtedness against the property and they would get the $3,000 net as their part.
*473The plaintiffs’ petition is lengthy, quite verbose, relating fraudulent and malicious representations chargeable to the defendants, Rodriquezs and Klindworth, which induced plaintiffs to execute the deed to' the Carlisle Street property and enter into the further agreement to purchase the McCoy Street property, and to execute notes and deeds of trust, involving all of the defendants, incident to such transactions. We pretermit further recitations from plaintiffs’ petition.
The plaintiffs prayed for cancellation and revocation of all the deeds, notes, and deeds of trust owned or held by'the defendants, and alternatively, for damages, actual and exemplary, against the defendants,' — • the Rodriquezs and Klindworth. As to the other named defendants, supra, they were vouched into the suit by the plaintiffs to enable full relief of cancellation of all purported obligations, notes, deeds, deeds of trust, claims, or interests, which they or either of them may have and hold against the plaintiffs and the Carlisle Street property.
The defendant Klindworth in answer to plaintiffs’ petition urged numerous special exceptions which seem not to have been presented to, or acted upon, by the trial court, — thus waived; and, answering jointly to the merits with the other defendants, denied the unsoundness of mind and other incompetency of the plaintiffs to enter into the transactions as alleged in plaintiffs’ petition; and, in the alternative, that if the plaintiffs were insane or otherwise incompetent to enter into said transactions or to execute the contracts and conveyances as alleged, such mental status was unknown to them; that they acted in good faith in all of the transactions which they severally or jointly had with the plaintiffs, without fraud or imposition and for a valuable consideration, — without notice of such mental infirmities; that such contracts and conveyances should not be set aside without equitably restoring the defendants to their original position.
The record here shows that the defendants, W. L. Sterrett, W. W. Fair, Jr., W. M. Holland, Mary and Roy Fuller, J. Oran Carter, Wm. T. Sargent, Guardian Loan Association and Stewart Title Company made no appearance by answer or otherwise to the suit.
The roll of the transactions involved shows that on August 2, 1946 Ted C. O’Con-nor and Orval M. O’Connor and their sister Mary Fuller were joint owners of a Lot or tract of land located on Carlisle Street in the City of Dallas, Texas; being 40 ft., Lot 2, and 10 ft., Lot 3, B’ock 16,966 of Bowser & Lemmon Oak Lawn Addition to said City, and designated in the record as the “Carlisle Street property.” The plaintiffs and their sister inherited this property from their father, J. A. O’Connor who, the record shows, died in 1940 intestate, in Dallas County. No administration was taken out on his estate, and it seems there was no necessity therefor.
On June 26, 1946, the appellants Jose Rodriquez and Rosemond Rodriquez (husband and wife) were real estate agents and, as such, obtained from the O’Connor brothers and their sister (Mrs. Fuller) a listing of the Carlisle Street property for sale and in course of advertising, secured L. W. Klindworth as a purchaser at the sum of $3,000, and on August 2, 1946 effected the sale by having the O’Connors and Mary Fuller (joined by her husband Roy Fuller) to execute a general warranty deed to L. W. Klindworth. The deed and the closing disbursement of the sale were handled by Hexter Title & Abstract Company; and after deducting $725 City Taxes, $228.13 State and County taxes, and $229.13 for real estate commission, title policy, recording fees, etc., from the $3,000 cash consideration recited in the deed, there was left due to the three grantors the sum of $1,817.74, or $605.91 to each of the O’Con-nor children. In accordance therewith, Hexter Title & Abstract Company issued checks on its account at Republic National Bank at Dallas, Texas to' Orval and Ted O’Connor; — however, endorsing thereon as of date September 14, 1946 “For deposit only” to Stewart Title Company, to whom the checks were delivered.
On September 11, 1946 L. W. Klindworth executed a warranty deed to Ted C. O’Con-nor and Orval M. O’Connor to a lot or tract of land in the City of Dallas, — designated *474in the record here as the “McCoy Street property,” being 41 ft. by 91⅜ ft. The consideration therefor recited to be the sum of $5,750, of which $1,100 was cash, and two notes executed by Ted and Orval O’Connor, one in the sum of $2,500 payable to the Guardian Federal Savings & Loan Association of Dallas, and the other, a second lien note in the sum of $2,150, payable to L. W. Klindworth. The $1,100 cash seems to have been paid by the Stewart Title Company out of plaintiffs’ deposits, or escrow fund held by it, evidenced by the checks of Hexter Title & Abstract Company. The deed further recites that the $2,500 note payable to Guardian Federal Savings & Loan Association was for cash paid by L. W. Klindworth. Photographs accompany the record, — depicting the houses on the two aforesaid lots.
On October 30, 1946 Klindworth conveyed the Carlisle Street property to Sixto Espinosa for a purported consideration of $6,950, of which $1,350 was cash, one note in the sum of $3,000 payable to Geo. V. Basham, secured by vendor’s and deed of trust liens, and one note in the sum of $2,600 payable to L. W. Klindworth, secured 'by a secondary vendor’s and deed of trust lien. On November 4, 1947, perforce of a judgement entered in the Justice Court of Dallas County (over which the Honorable W. L. Sterrett was Justice of the Peace) in favor of L. W. Klindworth against Ted C. and Orval M. O’Connor in forcible entry and detainer suit; the plaintiff in the judgment (Klindworth) was decreed possession of the McCoy Street property; — possession stayed by injunction in the present suit.
This cause was tried to a jury on special issues, the jury finding: (1) That Ted C. O’Connor did not have sufficient mind and memory to understand the nature and effect of his act in executing the deed in question to L. W. Klindworth; (2) that Rosemond Rodriquez acted with malice in making the representation to Orval M. O’Connor that the Carlisle Street property would be taken away from plaintiffs for taxes; (3) that Rosemond Rodriquez knew that Ted C. O’Connor did not have mental capacity to execute the deed to the Carlisle Street property at the time the deed was executed; (4) that L. W. Klindworth in purchasing the property from Ted C. O’Connor acted with malice, — “malice” being defined by the court: “Ill-will or bad or evil motive, or such gross indifference to the rights of another as will amount to a willful or wanton act, done intentionally and without just cause or excuse”; (5) that the reasonable cash market value on August 2, 1946 of the Carlisle Street property was $4,500; (6) that Rosemond Rodriquez knew on August 2, 1946 that Ted C. O’Connor did not have mental capacity to execute the deed to Klindworth; (7) that Rosemond Rodriquez acted with malice in the transaction; (8) that Ted C. O’Connor should be paid exemplary damages in the sum of $1,000 by Rosemond Rodriquez; (9) that L. W. Klindworth knew on August 2, 1946 that Ted. C. O’Connor did not have mental capacity to execute the deed in question to him; (10) that Klindworth acted with malice in the transaction; and (11) that Ted C. O’Connor should be paid exemplary damages by Klindworth in the sum of $5,000.
On motion for judgment upon the findings of the jury, the court entered judgment as to Orval M. O’Connor against Jose Rodriquez and Rosemond Rodriquez, jointly and severally, for actual damages in the sum of $500, and against Rosemond Rodriquez for exemplary damages in the sum of $1,000. In the case of Ted C. O’Connor, the court entered judgment in his favor against L. W. Klindworth, Jose Rodriquez and wife Rosemond Rodriquez, jointly and severally, for actual damages in the sum of $500, and against Rosemond Rodriguez for exemplary damages in the sum of $1,000, and against L. W. Klindworth for exemplary damages in the sum of $5,000. As to the other named defendants, the court entered judgment in their favor, in that, the plaintiffs take nothing as to them and that they be discharged with their costs.
To all of which judgment the defendants Jose and Rosemond Rodriquez and L. W. Klindworth perfected separate appeals,— the Rodriquezs prosecuting their appeal by cost bond, Klindworth by cost and super-sedeas bond payable to Ted C. O’Connor. *475’The plaintiffs counter-assigned error to the action of the court in not revoking the •deeds in question and equalizing the equities among all the parties, and duly perfected their appeal as against all defend- . ants.
It will be observed that the award to Orval M. O’Connor against Jose and Rose--mond Rodriquez for actual and exemplary damages is based upon actionable fraud in procuring the real estate involved in this suit, — controlled by Art. 4004, Vernon’s Ann.Civ.St.; and in the case of Ted C. O’Connor for damages actual and exemplary against L. W. Klindworth, Jose Rodriquez and Rosemond Rodriquez in tort action wherein the said defendants are shown to have acted willfully and maliciously in ■dealing with Ted C. O’Connor in the real estate transactions,- — knowing him to be mentally incompetent to transact such business.
Summarizing the evidence favorable to ■the findings of the jury and judgment of the trial court: Numerous witnesses gave testimony of probative effect that Ted C. and ■Orval M. O’Connor have minds of children .and continuously play with small children rather than associate with grown people; that they are incompetents without sufficient mental ability to understand the nature of their acts, and incapable since birth to enter into any substantial business transaction. Ted and Orval were bachelors, more than forty years of age, their reasoning and judgment impaired, easily influenced and imposed upon; weré imbeciles, incapable of judging the fairness of business transactions.
While imbecility or weakness of mind, in itself, does not necessarily incapacitate one from conveying his property, yet when there is evidence tending to show imposition or fraudulent misrepresentation of a material fact, as here, it is not to be doubted that weak understanding of the transaction in which such person is engaged may be considered by the trier of facts in -estimating the fairness of the transaction. The mental incapacity must be shown to "have existed at the time of the transaction, "but evidence as to -the person’s mind before and for a reasonable time after the transaction is admissible as a fact tending to prove that incapacity existed on the date inquired about. Beville v. Jones, 74 Tex. 148, 11 S.W. 1128; Armstrong v. Burt, Tex.Civ.App., 138 S.W. 172; Cardinal v. Cardinal, Tex.Civ.App., 138 S.W.2d 1005; Self v. Becker, Tex.Civ.App., 195 S.W.2d 701, error refused. The capacity of a grantor is usually a question of fact. White v. White, 141 Tex. 328, 172 S.W.2d 295. A person may be quite capable of performing certain functions of the mind, yet incapable as to others. “The general definition of the term ‘mental capacity’ seems to contemplare the ability to understand the nature and effect of the act in which a person is engaged and the business he is transacting.” Gray v. Allen, Tex.Civ.App., 243 S.W. 684, 686.
In the case of Ted C. O’Connor, the trial court in the charge, gave the meaning of the term “mental capacity” to be': “That at the time of executing the instrument in question the person executing such instrument must ¡have had sufficient mind and memory to understand the nature and effect of his act in executing the instrument in question.” Thus, based upon, such definition, the court submitted to the jury: “Special Issue No. 1: On August 2, 1946 at the time Ted C. O’Connor executed the deed to the Carlisle Street property, did he have mental capacity? If you find from a preponderance of the evidence that he did not have mental capacity, you will answer this issue ‘No.’ If you have not so found and so stated, you will answer it ‘Yes.’ ” The jury answered “No.” We are of the opinion that the issue and definition given to the term “mental capacity,” clearly submitted the primary issue as to Ted C. O’Connor’s incompetency, and that the finding of the jury is supported by the evidence.
 “Compensation for injury, loss or prejudice is the end which ordinarily is sought to be accomplished by an awarding of damages, whether for breach of a contract or for a tort. The recovery is not limited to compensatory damages, however, where in a tort action the defendant is shown to have acted wilfully, maliciously *476or fraudulently; the plaintiff in addition to compensation is entitled to recover exemplary or punitive damages. Accordingly, it is held that damages of this character may be awarded in actions arising out of personal injuries, assaults, the wrongful taking of personal property, trespass to realty, and many other torts which may be characterized by malice or wilful wrongdoing.” 13 Tex.Jur. p. 236, § 129.
The evidence further shows that at the time of the transaction in question there was due and owing to the City and County of Dallas delinquent taxes against the Car-lisle Street property of approximately $1,000, for which suit had been filed by the City against the elder O’Connor. Mr. Cul-lom, Tax Assessor and Collector of the City of Dallas, testified that the taxes had not been paid, but that “Before we would foreclose on anybody’s taxes we like to know the circumstances, and as I recall it, Mr. Douglas (deputy) did go out and talk possibly to Mr. O’Connor, at least to the boys, * * * and made a written report to me on it, * * *. Q. Now, in that report and in the investigation made on J. A. O’Connor, do you recall what you found out as to his condition? A. Only in a vague way. It was rather, as I called it, a pathetic situation, and it seemed that there were no earnings going on among any of the family, and those very fapts had a lot to do with the City holding off and not foreclosing on the property for the years that they didn’t, — when those taxes were due.”
The evidence further shows that Orval O’Connor knew about the taxes not having been paid but did not know anything about foreclosure of lien; and when Mrs. Rodriquez first called upon him to sell the Car-lisle Street property, he had not theretofore discussed the matter with her. He testified:
“Mrs. Rodriquez came down to see me about selling it * * *.
“Q. Can you recall the first time she came down to talk with you with reference to this property? A. Well, she just came down to my house, just drove by and came up to my house and told me she had heard that my house was going to be taken away from me for taxes, and that she knew a man that would buy the house from me.
“Q. Did she tell you the man’s name at that time? A. Not at that time.
“Q. As a result of that conversation did you since find out who that man was? A. I did.
“Q. Who was it? A. A Mr. Klind-worth. * * *
“Q. What did the Rodriquezs tell you with reference to having to sell this property? A. They told me the City was going to take it away from me for taxes and I had better sell the place for anything I could get out of it, or I would be sitting out in the middle of the street, and no property or no nothing.”
Orval further testified that he believed the statement made by the Rodriquezs to be true, and that he had a like conversation with Mr. Klindworth before signing the deed to Klindworth.
In submitting the issues in the case of Orval M. O’Connor, the trial court gave in the charge that: “By the term ‘malice’ ■as used in this charge, is meant ill-will, or bad or evil motive, or such gross indifference to the rights of another as will amount to a willful or wanton act, done intentionally, and without just cause or excuse”; thus submitted to the jury: “Special issue No. 2: Do you find from a preponderance of the evidence that before the signing of the deed to the Carlisle Street property, Mrs. Rodriquez represented to Orval O’Connor that the Carlisle Street property would be taken away from the O’Connors for taxes?” The jury answered “Yes”; and to accentuate the issues, the trial court submitted and the jury found that such representation was a material matter, that same was false, that Orval believed same was true, and that he relied upon same to his injury. We are of the opinion that the issues submitted were pertinent inquiries and the findings of the jury are fully supported by evidence.
Actionable fraud exists where one makes a false representation of a material fact knowing it to be false, or as of his own knowledge when he does not know whether it is true or false, with the intention to induce the person to whom it is made, in reliance thereon, to do, or to re*477frain from doing something to his pecuniary hurt, when such person is thereby deceived and induced to do, or refrain, to his damage. Panhandle & Santa Fe R. G>. v. O’Neal, Tex.Civ.App., 119 S.W.2d 1077, error refused. It has been said that “ * * fraud is so multiform as to admit of no rules or definitions, and hence equity leaves the way open to punish frauds and redress wrongs perpetrated by means of them in whatever form they may appear.” Varner v. Carson, 59 Tex. 303, quoting Bigelow on Frauds. Judge Simpkins, Contracts of Sale, defines fraud: “Fraud is an act or concealment involving a breach of legal duty, trust or confidence justly reposed, and from which injury results to another, or by reason of which an undue and unconscien-tious advantage is taken of another.” See, Russell v. Industrial Transportation Co., 113 Tex. 441, 251 S.W. 1034, 258 S.W. 462, 51 A.L.R. 1; 20 Tex.Jur. p. 6, secs. 1, 2. False affirmation of material fact, made for the purpose of inducing a bargain which actually accomplishes the purpose intended, will give ground for an action in damages. United States Pipe & Foundry Co. v. City of Waco, Tex.Civ.App., 100 S.W.2d 1099, affirmed 130 Tex. 126, 108 S.W.2d 432. Ordinarily mere expression of opinion is not a representation upon which a contracting party is entitled to rely, since he is assumed to be equally able to form his own opinion; but, where the opinion is made in bad faith, made for the purpose of inducing a bargain, with evil motive or gross indifference to the rights of the other party, such expressed opinion becomes a material fact issue, where the other party acts thereon and is deceived thereby to his injury. Misrepresentation of law may be treated as misrepresentation of fact where the representer had superior knowledge and the representee regarded the representation as being one of fact. Bankers Life & Loan Ass’n v. Pitman, Tex.Civ.App., 115 SW.2d 1008. A malicious act is close'y related to fraud and partakes of the same elements of ill-will, mischief and indifference to the rights of others, wantonly and intentionally done to deceive. Such, we think, is forcibly brought forward here, due to the mental condition of the O’Connor boys.
So applying “malice” as here defined by the court, and the O’Connor boys, as the evidence discloses, being imbeciles, incapable of judging the fairness 'of business, with minds of children, it could hardly be doubted that when the Rodriquezs approached Orval for the listing of the O’Connor property, and related to him the delinquency of the father as to the City taxes and that their Carlisle Street property would be taken away from them, they were acting in bad faith for the sole purpose of inducing the O’Connors to sell; and certainly, as disclosed by the record, with gross indifference the best interests of the O’Connor boys. What other motive could the real estate agents and the purchaser L. W. Klindworth have had, than to frighten or deceive the “boys,” — that they would be, as Orval said, “sitting out in the midd’e of the street, and no property, or no nothing” ?
We overrule appellants’ various assignments of error to the action of the trial court.
Appellees counter-assign error to the action of the trial court in overruling their motion for judgment revoking the real estate transactions, claims, notes, deeds of trust, and all liens on the Carlisle Street property, and adjusting equities among all parties thereto. The evidence is uncontro-verted that the defendant Sixto Espinosa purchased the Carlisle Street property from the defendant Klindworth on October 30, 1946, only a short time after its purchase by Klindworth, for a recited consideration of $1,350 cash and the execution of two notes, with vendor’s and deed of trust liens against the property, one in the sum of $3,000 payable to the defendant Geo. V. Basham, and the other of $2,500 payable to L. W. Klind-worth. The evidence is sharply controverted that Espinosa did not know the plaintiffs were incompetent to make the deeds. The jury decided the issue in favor of the defendant. And there is no evidence that the defendant Basham knew of the infirmity of the O’Connor boys at the time of the transaction in question. We overrule ap-pellees’ counter-assignments.
*478From what we have said, we are of the opinion that the judgment of the trial court should be affirmed, and that the temporary restraining order as affects possession of the McCoy Street property should be dissolved. It is so ordered; all costs taxed against appellants.
CRAMER, J., dissents.