Fingerhut v. Kralun Enterprises, Inc.

337 N.Y.S.2d 394 (Sup. Ct. 1971)

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Nature of the Case

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Facts

P and his attorney informed the Bel Aire Golf & Country Club that P wanted to purchase the club. The majority stockholder of the club sent for their lawyer. Negotiations took place between the parties and their lawyers, and the price of $3,075,000 was agreed upon. The binder was written in longhand. The parties executed it, in the presence of their respective lawyers. P gave a check for $25,000 to D. On September 25, 1968, the parties met at the offices of P's lawyers to discuss the making of a formal contract and after six hours of strenuous negotiating a contract was made. On September 26, 1968, that contract was executed and P paid a further sum of $200,000. The balance of $2,850,000, was to be paid upon the closing of title scheduled on November 15, 1968. On November 19, 1968, P's attorneys wrote that P suffers from a manic-depressive psychosis, a condition for which he has received medical treatment for the past years. They claimed that P was wholly incompetent and totally incapable of managing his own affairs during the time they made the contract. P wanted to rescind the contract and demanded his $225,000 returned. D tendered a deed and demanded payment of $ 2,850,000. P sued D for recission. D sought $500,000 as damages and demanded specific performance. P presented expert witnesses who testified that he was psychotic. D presented an expert witness who said P was not psychotic. P also had others testify that his behavior was irrational and “bizarre” during the contract execution. It was stipulated that D and its attorneys, during the crucial period involved herein, were unaware of the mental condition of P; nor did they have any reason to believe that such condition existed; P's attorneys were also unaware of such condition, and similarly had no reason to believe such condition existed.