Guice v. Burrage, 11579-11582.

• Decision Date: 29 July 1946
• Docket Number: No. 11579-11582.,11579-11582.
• Citation: 156 F.2d 304
• Parties: GUICE v. BURRAGE et al. DAVIS et al. v. SAME. JAMES v. SAME. HERRING v. SAME.
• Court: U.S. Court of Appeals — Fifth Circuit

156 F.2d 304 (1946)

GUICE v. BURRAGE et al. DAVIS et al. v. SAME. JAMES v. SAME. HERRING v. SAME.

Nos. 11579-11582.

Circuit Court of Appeals, Fifth Circuit.

June 27, 1946.

Rehearing Denied July 29, 1946.

Luther A. Whittington and G. H. Brandon, both of Natchez, Miss., for appellants.

M. E. Ward, of Vicksburg, Miss., and Thos. B. Ramey, of Tyler, Tex., and Alfred McKnight, of Fort Worth, Tex., for appellees.

Before McCORD, WALLER, and LEE, Circuit Judges.

LEE, Circuit Judge.

Appellants, plaintiffs below, brought separate suits to cancel certain deeds purportedly conveying mineral interests in their property to one W. G. Burrage. W. G. Burrage acquired an oil, gas and mineral lease from each of appellants: from Elizabeth Guice, plaintiff in the first action, and her husband, S. L. Guice,¹ on December 7, 1938; from Finus Herring and Cordelia Herring, plaintiffs in the second action, on December 2, 1938; from Monroe Davis and Hattie Davis, plaintiffs in the third action, on December 2, 1938; and from Foster James, plaintiff in the fourth action, on December 15, 1938. Finus Herring, Cordelia Herring, Monroe Davis, Hattie Davis, and Foster James are Negroes, illiterate and inexperienced in business affairs. At the time of the execution of each of the four oil and gas leases, Burrage induced each lessor to sign a second instrument which purportedly conveyed to Burrage one-half of the oil, gas and other minerals under the leased land. Burrage in each instance fraudulently represented that this instrument, which was placed beneath the lease, was a copy of the oil and gas lease the fee owner was then executing. Burrage never made an offer to the plaintiffs to buy their mineral rights, and they never intended to sell any mineral rights. No consideration for mineral rights was paid. After their execution, the mineral leases and the mineral deeds were duly recorded.

While each plaintiff signed what appears now to be a mineral deed, there is no evidence that the instrument when signed was anything other than a blank sheet of paper. The mineral deed in each instance is on a printed form headed "Royalty Conveyance," and all the language thereof except the date, the consideration, the parties, and the description of the property is in print. Plaintiffs never acknowledged the signing and delivery of the instruments. The alleged deeds are copies of a standard form and differ only in respect to the date, the consideration, the parties, and the description of the property. Each deed states that the land concerned was at that time under an oil and gas lease executed in favor of W. G. Burrage, and that the royalty conveyance was made subject to the terms of said lease. Each deed conveyed, in addition to one-half of the minerals, one-half of the royalty under each of said leases and entitled the grantee to one-half of the renewal rentals.

The signature of J. E. Spalding appears on each deed as the signature of a witness to the conveyance, and it also appears as the subscribing witness to an acknowledgment under each of the instruments. In these acknowledgments J. E. Spalding swore that he saw the fee owner sign and deliver each deed to W. G. Burrage, and that he signed his name as a witness thereto in the presence of each grantor and in the presence of the other subscribing witness. J. E. Spalding was not present at the execution of these alleged mineral deeds but at a later date added his signature as a witness.

On December 15, 1938, Burrage conveyed to C. J. Davidson 1/8 of the oil, gas and other minerals under the above-mentioned tracts of land. On January 25, 1939, Burrage conveyed to R. R. Wortham a 1/8 interest in the same minerals. On January 9, 1939, Burrage conveyed to W. B. Powell a 1/8 interest in the minerals (later inherited by his widow, Vivian Elbert Powell). On February 21, 1939, Burrage conveyed to Horace Mills a 1/16 interest in the same minerals. On March 29, 1939, Horace Mills conveyed this 1/16 interest to Standard Accident Insurance Company of Detroit, Michigan. On February 21, 1939, Burrage conveyed the remaining 1/16 of the minerals to J. M. Shimer.

The acreage in the Monroe Davis lease was 170 acres, in the Foster James lease 200 acres, in the Finus Herring lease 170 acres, and in the Elizabeth Guice lease 250 acres. Each lease was for a term of ten years. In these leases the annual rentals for deferred drilling were respectively $17, $20, $17, and $25. The Monroe Davis mineral deed recited a consideration of $1.00; the other mineral deeds recited a consideration of $10; no other consideration was recited. None of the defendants acquiring from Burrage saw the mineral deeds from the fee owner to Burrage, and only W. B. Powell saw photostatic copies thereof. None of the defendants examined the records as to the title on the property. Burrage, although made a party defendant, filed no answer and was not a witness. While there is no testimony as to what the market value was in 1939 or 1940, George Mitchell, a broker, testified that he had paid Burrage 50¢ per acre when he bought for his customers and that he had received, when he sold, $1.75 to $2.00 per acre.

Monroe Davis discovered in October of 1941 that a deed conveying one-half of the minerals on his property stood on the records; a week prior thereto he and his wife received a check in payment of two delay rentals on one-half interest in the minerals under their property. Finus Herring discovered in 1940 that a deed conveying one-half of the minerals on his property stood on the records; Finus Herring and Cordelia Herring accepted in 1941 and again in 1942 payments representing delay rentals on one-half interest in the minerals under their property. Elizabeth Guice and her husband knew in 1940 that Burrage or other parties were getting one-half of the deferred rental payments on their property; Elizabeth Guice and her husband accepted in 1941 and 1942 payments representing delay rentals on one-half interest in the minerals under their property. Foster James in the fall of 1943, learned that he was entitled to only $10 deferred rentals instead of the $20 he had expected under the lease he had given Burrage; Foster James accepted on December 13, 1943, a payment representing delay rentals on one-half interest in the minerals under his property.

Plaintiffs, residents of Mississippi, brought their suits in Chancery Court of Franklin County, Mississippi, against W. G. Burrage, R. R. Wortham, C. J. Davidson, W. B. Powell, J. M. Shimer, Horace Mills, and John C. Robbins, Jr., all residents of Texas, and the Standard Accident Insurance Company of Detroit, Michigan, a Michigan corporation.² On the ground that a diversity of citizenship existed between the parties and that the amount in controversy exceeded $3,000, the defendants removed the causes to the court below, where they were consolidated and tried without a jury.

The court found: that W. G. Burrage perpetrated a fraud upon each of the plaintiffs; that the evidence...