## Facts

- In September 1963, Darwin Cundick agreed in writing to sell his ranching assets to J.R. Broadbent, including livestock, equipment, development-company stock, and base range land in Wyoming.
- The parties first executed a brief handwritten agreement, then, with the Cundicks’ attorney, replaced it with an expanded, formal written contract signed by both parties.
- In October 1963, the agreement was amended with the same attorney’s assistance on terms the trial court found favorable to Cundick, including an increased purchase price.
- The transaction was carried out over several months; the trial court found payment and performance occurred from early September 1963 through mid-February 1964.
- Cundick executed documents in the presence of his counsel and wife; the wife participated and expressed consent to the transaction.
- The trial court found that during the performance period neither Cundick nor his wife complained that he lacked capacity or did not understand the transaction.
- In March 1964, after the agreement was “practically carried out,” Cundick (through his wife as guardian ad litem) sought to rescind, alleging mental incompetence and fraudulent inducement.
- At trial, medical testimony described prior mental illness and opined that Cundick could not manage his affairs at the time of contracting; other evidence suggested the sale price was substantially below the property’s value.
- The trial court found Cundick’s conduct during the relevant period consistent with competence and found no fraud, overreaching, deception, or knowledge of incapacity by Broadbent.

## Issues

1. Whether Cundick lacked sufficient mental capacity at the time of contracting such that the transaction was voidable.
2. Whether Broadbent knew of any mental deficiency and fraudulently misrepresented the fairness of the price or otherwise overreached.
3. Whether the attempted rescission was sufficiently prompt given the extent of performance.

## Decision

- The Tenth Circuit affirmed the judgment dismissing the complaint after a bench trial.
- The court held the appellant did not carry the burden to prove Cundick was incapable of managing his affairs at the time of the transaction.
- The court upheld the finding that there was insufficient evidence of fraud, deception, overreaching, or knowledge of incapacity by Broadbent.
- The court agreed that rescission was unavailable because the election to rescind occurred only after the contract had been nearly fully performed and was not timely under equitable standards.
- The court treated mental capacity and fraud as fact-bound determinations and deferred to the trial court’s findings absent clear error.

## Legal Principles

- A contract made by a mentally deficient person who is not under guardianship is generally voidable, not void.
- Capacity to contract exists if the person has sufficient reason to understand the nature and effect of the transaction.
- In the absence of fraud or the other party’s knowledge of mental deficiency, avoidance is governed by equitable principles rather than automatic invalidity.
- Inadequacy of consideration alone does not establish fraud; proof of intentional deception, exploitation, or knowing advantage-taking is required.
- Rescission is an equitable remedy requiring reasonably prompt election once avoidance is asserted, particularly where performance is substantially complete.
- Appellate review of trial findings on capacity and fraud is deferential; findings supported by the record are not disturbed as clearly erroneous.

## Conclusion

The court refused to unwind the completed sale because the seller did not prove incapacity at the time of contracting, did not show that the buyer knowingly exploited any mental weakness or committed fraud, and sought rescission only after the agreement had been largely performed.


Cundick v. Broadbent, 383 F.2d 157 (10th Cir. 1967)