Beckley Nat. Bank v. Boone, 4676.

• Citation: 115 F.2d 513
• Decision Date: 13 November 1940
• Docket Number: No. 4676.,4676.
• Parties: BECKLEY NAT. BANK et al. v. BOONE et al. (MOSELEY, Intervenor).
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

115 F.2d 513 (1940)

BECKLEY NAT. BANK et al. v. BOONE et al. (MOSELEY, Intervenor).

No. 4676.

Circuit Court of Appeals, Fourth Circuit.

November 13, 1940.

John Q. Hutchinson, of Beckley, W. Va., and Frank N. Bacon, of Fayetteville, W. Va. (Mahan, Bacon & White, of Fayetteville, W. Va., on the brief), for appellants.

Connor Hall, of Huntington, W. Va. (Samuel Biern, of Huntington, W. Va., Leo Loeb, of Charleston, W. Va., and William L. Lee and C. R. Summerfield, both of Fayetteville, W. Va., on the brief), for appellees.

Before PARKER, SOPER, and DOBIE, Circuit Judges.

SOPER, Circuit Judge.

This appeal revolves around the central contention that on and after January 1, 1929, John A. Boone, late of Beckley, West Virginia, deceased, was insane, and unable to understand the results of an ordinary business transaction. Based on the assumption that he was insane as early as 1924, equity proceedings were brought by his widow and children in the District Court on November 14, 1935 to set aside numerous judgments filed against him while incompetent, and also to set aside certain transfers of real and personal property made in execution of the judgments under the authority of the West Virginia courts. The District Court found insanity as of January 1, 1929 and issued a decree whereby the judgments were annulled and the transfers were set aside, although Boone was represented by competent counsel in the prior litigation in the state court, and no effort was made by the plaintiffs to show to the District Court that the debts upon which the judgments were based were not justly due and owing other than their contention that Boone was incompetent at the time they were incurred.

Boone died on May 30, 1935 at the age of eighty-one years. He left a will whereby he devised and bequeathed all of his property to his wife and his two sons in equal shares. Prior to 1920 he had been engaged as a coal operator, producing and shipping coal from mines in West Virginia, in which he was a large stockholder. He had been engaged in this business for more than thirty years, and as he was a man of good business ability and sound judgment, he had amassed a considerable fortune. In 1920 he retired from the active management of the mines and moved his residence to the town of Beckley in an adjoining county. He established in this town the business of a steam laundry. His other interests, in which he was engaged with four brothers, included six corporations engaged in business relating to the mining of coal in West Virginia. He was also interested in a cold storage building in Beckley.

During the years prior to 1929 Boone borrowed for his personal use, and he and his brothers borrowed for the corporations in which they were interested, large sums of money evidenced by notes made and renewed again and again, which, in 1929, they found themselves unable to pay. Consequently more than fifty judgments in addition to tax liens, aggregating $296,337.68, were filed against him and certain of his brothers. On April 19, 1929 a general creditors' suit was instituted against him in the Circuit Court of Raleigh County, West Virginia, and he retained lawyers of unquestioned standing and ability to represent him. They endeavored with some success to delay the progress of the suit in order to enable him and his brothers to liquidate their properties to advantage and pay their debts. Private sales, however, were not feasible, and the final result was that on November 15, 1930 a decree was entered whereby special commissioners were appointed by the court to sell various parcels of his real estate in Raleigh and Fayette Counties, and the sales were made and the lands were conveyed to the purchasers. Grantees of some of these purchasers filed intervening petitions in the proceedings in the District Court asking that no decree be entered which would prejudice their title to the properties.

The District Court in the pending case appointed a special master to make findings of fact and conclusions of law in regard to the controversy. The findings and conclusions reached by the special master were confirmed in all respects by the District Court on April 4, 1940, Boone v. Equitable Holding Co. et al., 32 F.Supp. 896, by a final decree wherein the following adjudications in substance were made: (1) Boone was mentally competent prior to January 1, 1929, and mentally incompetent at all times thereafter; (2) all notes made or endorsed by him, upon which the judgments against him were rendered by the state courts, were made or endorsed while he was sane; (3) all the judgments against him, except two, were set aside and the judgment creditors were enjoined from collecting the judgments from his estate; (4) all orders and decrees in the general creditors' suit in the state court and the deeds of the special commissioner therein to purchasers at the judicial sales thereunder were cancelled and set aside without prejudice, however, to the title of certain persons to whom the purchasers at these sales had conveyed portions of the land; (5) the executor of Boone's will was given judgment against certain purchasers at the judicial sales for rents and royalties collected by them after they acquired the property; (6) the right was reserved to the sons of Boone (the widow having died in the meantime) to assert their claim to rents and royalties collected from the real property of Boone subsequent to his death; and to apply for an allowance of counsel fees to be paid by the defendants; (7) the executor and distributees of Boone's estate were enjoined from pleading limitations to claims based on his notes.

The broad scope of this decree and its widespread effect in disturbing rights acquired in good faith under the proceedings of the state court are manifest, and the clear duty is imposed upon this court to examine with care the findings of fact of the District Court and the conclusions set forth in its decree.

In making this investigation, we must adhere to the rule that an appellate court will not disturb the findings of a special master, confirmed by a district judge, upon a disputed question of fact, unless a very plain mistake has been made. Warren v. Keep, 155 U.S. 265, 15 S.Ct. 83, 39 L.Ed. 144; Earle v. Myers, 207 U.S. 244, 28 S.Ct. 86, 52 L.Ed. 191; Cory Mann George Corp. v. Old, 4 Cir., 23 F.2d 803; General Finance Corp. v. Keystone Credit Corp., 4 Cir., 50 F.2d 872, certiorari denied, Adams v. Keystone Credit Corp., 284 U.S. 684, 52 S.Ct. 201, 76 L.Ed. 578; Stewart v. Wall, 4 Cir., 87 F.2d 598, certiorari denied, 302 U.S. 684, 58 S.Ct. 26, 82 L.Ed. 528. But as this court has said previously, the findings of a special master, as approved by the judge below, though entitled to weight, are persuasive only and not controlling. The review in this court is a real review and not a perfunctory approval. Crawford v. Neal, 144 U.S. 585, 12 S.Ct. 759, 36 L.Ed. 552; Furrer v. Ferris, 145 U.S. 132, 12 S.Ct. 821, 36 L.Ed. 649; National Manufacture & Store Corp. v. Whitman, 4 Cir., 93 F.2d 829; see also, Hoeltke v. C. M. Kemp Mfg. Co., 4 Cir., 80 F.2d 912, and Standard Acc. Ins. Co. v. Simpson, 4 Cir., 64 F.2d 583. See, also, 52 (a) of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c.

The testimony offered to support the charge of insanity was given by members of Boone's household and by employees, business men, political associates and friends. The testimony of members of his family and of servants in his house related to strange and peculiar actions, such as going to bed with his clothes on, putting salt in his corn flakes, carelessness in dress, making statements or complaints about alleged happenings in the household that did not take place, searching for members of his family when they were in his presence, inability to understand the presence in the home of persons who were there as employees, speaking of events in the distant past as if they were happening in the present, and a general inability to use his reasoning faculties.

Certain business men testified about queer actions of Boone and stated that he paid extravagant sums for Beckley real estate and was incompetent to do business before 1929. Cross-examination weakened much of this testimony.

Employees and friends testified that he wanted to do things in an unreasonable way; that he ran his business in a loose fashion, and that he was absent minded and would stand with his mouth open and drool; that he forgot his promises and obligations; that his memory was generally poor; that he was garrulous and lived in the past, and that he was absent minded and easily influenced; that he was confused or forgetful as to the details of his business and of the property that he acquired, and that he took little interest in his business but left it to be carried on by others, and was in fact incapable of doing it himself, and that he failed to recognize his friends when meeting them on the street.

Political associates said that Boone attended the meetings of the City Council, of which he was a member, in 1926 and 1927, and voted on the measures proposed, but never said anything or proposed anything himself; that he wandered aimlessly about the streets and denied the ownership of property that belonged to him.

There is no conflict in the testimony on one point. It is conceded that on March 14, 1933, Boone was suffering from senile dementia, an incurable disease. The dispute relates to the point of time when this undoubtedly able and successful man became unable to attend to business. No mention has been made of the established fact that Boone began to drink heavily in 1925, and that in 1928 and 1929, to which much of the testimony of the plaintiffs relates, he was frequently under the influence of intoxicating liquor. As he grew older he became more susceptible to the effects, and it may be that some of the queer actions attributed to him were caused by this fact.

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