## Facts

- Robert W. Ryan, a 69-year-old retired laborer with limited education and income, owned a modest Wilmington home subject to a first mortgage.
- By spring 1984, Ryan was seriously behind on mortgage payments; foreclosure proceedings resulted in a default judgment and an impending sheriff’s sale.
- The home’s 1984 fair market value was $19,800; the mortgage balance was under $8,000, leaving Ryan about $12,000 in equity.
- Norman D. Weiner, a licensed real estate broker and investor, approached Ryan unannounced and represented that he could help Ryan keep the house.
- The next day, Weiner took Ryan to Weiner’s lawyer’s office, where Ryan signed documents without meaningful explanation and without being advised to obtain independent counsel.
- Ryan believed he was entering a loan transaction secured by the house; instead, he executed a deed conveying full title to Weiner.
- Although the deed recited $7,000 consideration, Weiner did not pay Ryan cash and did not cure the arrears or satisfy the foreclosure judgment at the time of transfer; Ryan received no financial value and remained personally liable on the mortgage.
- After the transfer, Ryan stayed in the home as Weiner’s tenant; Weiner made mortgage payments while Ryan paid rent that later increased substantially.
- In 1991, believing he had paid more in rent than any legitimate obligation, Ryan stopped paying rent; Weiner filed a summary eviction action, which was stayed pending determination of title in Chancery.

## Issues

1. Whether the deed transfer should be rescinded in equity because it was unconscionable and amounted to constructive fraud given Ryan’s distress, the parties’ inequality, and gross inadequacy of consideration.
2. Whether rescission required proof of affirmative misrepresentation, or could rest on unconscionability/constructive fraud without finding specific false statements.

## Decision

- The Court of Chancery held the transaction was shocking and oppressive and that Weiner took gross advantage of Ryan’s weakened and distressed circumstances.
- The court rescinded and canceled the deed conveying Ryan’s home to Weiner.
- The court ordered relief designed to restore the parties, as nearly as possible, to their pre-transaction positions, including equitable adjustments reflecting mortgage payments made and rents received.

## Legal Principles

- Equity may rescind an executed conveyance when the transaction is so one-sided as to be unconscionable, particularly where a sophisticated party exploits a vulnerable party facing imminent hardship.
- Gross inadequacy of consideration, combined with procedural unfairness (speed, lack of explanation, absence of independent advice), can support a finding of constructive fraud warranting rescission.
- Rescission does not require proof of affirmative misrepresentation when the circumstances and resulting bargain establish unconscionability/constructive fraud.
- Rescission is appropriate where the court can substantially restore the status quo through accounting and equitable adjustments.

## Conclusion

The court set aside the deed because a professional real estate broker obtained a distressed homeowner’s equity for no real value through a procedurally unfair process, and equity required rescission and restitutionary adjustments to return the parties as close as practicable to their original positions.


Ryan v. Weiner, 610 A.2d 1377 (Del. Ch. 1992)