Highland Park Mfg. Co. v. Steele

• Decision Date: 04 March 1916
• Docket Number: 1276.
• Citation: 232 F. 10
• Parties: HIGHLAND PARK MFG. CO. v. STEELE et al.
• Court: U.S. Court of Appeals — Fourth Circuit

232 F. 10

HIGHLAND PARK MFG. CO. v. STEELE et al.

No. 1276.

United States Court of Appeals, Fourth Circuit.

March 4, 1916

[Copyrighted Material Omitted]

Charles W. Tillett, of Charlotte, N.C., and C. E. Spencer, of Rock Hill, S.C. (Tillett & Guthrie, of Charlotte, N.C., on the brief), for appellant

J. A Marion and D. E. Finley, both of Yorkville, S.C., and E. M Blythe, of Greenville, S.C., for appellees.

Before PRITCHARD and KNAPP, Circuit Judges, and CONNOR, District Judge.

CONNOR District Judge.

For the purpose of presenting the questions raised by the assignments of error, the transcript discloses the following facts:

On November 16, 1860, John Steele, of the county of York, in South Carolina, executed a deed whereby he conveyed to his son, Joseph A. Steele, in consideration of love and affection, a tract of land in York county, containing 494 acres, to have and to hold to Joseph A. Steele, his heirs and assigns:

'In trust, as to the one-half of the said piece, parcel or tract of land, to stand seised and possessed of the same for the use and benefit of my grandson the above named John G. Steele, for, and during, the term of his natural life, and at his death, to transfer and convey the same to such person, or persons, as he, the said John G. Steele, may by his will direct, or in default of such will and direction to the heirs at law of the said John G. Steele, in fee.' Joseph A. Steele died intestate, leaving as his heirs at law his widow, Eliza Jane Steele, his son, John G. Steele, and five daughters.

On August 3, 1868, and after the death of his father, John G. Steele executed a deed of statutory form, sufficient to convey in fee, with general warranty, the entire tract to James Pagan. Appellant, Highland Park Manufacturing Company, by successive conveyances, acquired all of the title which passed to, and vested in, Pagan by virtue of the deed of John G. Steele, to that portion of the original tract described in the pleadings herein. Appellant, and those under whom it claims, have been in possession of the land in controversy, since October 13, 1884. Improvements, alleged to have cost $250,000, have been placed upon the land, by appellant and its immediate grantor. John G. Steele died July 5, 1905, without having published a last will. Plaintiffs are his widow and children, and, under the canons of descent of South Carolina, his heirs at law. This proceeding was instituted on June 6, 1910, in the court of common pleas of York county, for the purpose of having partition of the portion of the land, described in the bill, and removed into the District Court of the United States for the Western District of South Carolina, upon petition of appellant, a North Carolina corporation. Appellant denies that appellees have any title to, or interest in, the land, and avers that it is sole seised thereof, in fee. Other facts, pertinent to other phases of the controversy, will be noted later. The cause was referred to Hon. Ernest Moore, special master, who, after hearing the testimony, reported as his conclusion of fact and law that the appellant and appellees were seised of the land in controversy as tenants in common-- each being entitled to one-half undivided interest therein. He also passed upon, and made report in regard to, the claim for betterments and rents and profits, with his conclusion as to the value of the interests of the respective parties, and the equitable method of making partition. Upon the coming in of the report, appellant filed exceptions thereto, which were heard and, after argument and consideration, overruled, and a decree entered, by the District Judge, to which appellants assigned error and appealed.

We are confronted, at the threshold, with the contention that the questions presented upon appellant's assignments of error, are not open to an exercise, or expression, of the independent judgment of this court, for that the same questions have been litigated in, and decided by, the Supreme Court of South Carolina; that by the decisions of that court, a rule of property has been established in the jurisprudence of that state, in accordance with the contention of appellees and the decision of the District Court. Our attention is called to the decision rendered in the case of Steele v. Smith (on November 30, 1909) 84 S.C. 464, 66 S.E. 200, 29 L.R.A. (N.S.) 939, and the cases cited by the court in the opinion therein.

Before proceeding to an examination of the decision made by the court in that case, we pause to ascertain the principle, or rule, by which this court should be governed in disposing of this contention. The question, in different phases, and under different aspects, has been frequently before the Supreme Court. In Kuhn v. Fairmount Coal Co., 215 U.S. 349, 30 Sup.Ct. 140, 54 L.Ed. 228, Mr. Justice Harlan reviewed the decisions and, writing for the majority of the court, said:

'We take it, then, that it is no longer to be questioned that the federal courts, in determining cases before them, are to be guided by the following rules: (1) When administering state laws and determining rights accruing under those laws, the jurisdiction of the federal courts is an independent one, not subordinate to, but co-ordinate and concurrent with, the jurisdiction of the state courts. (2) Where, before the rights of the parties accrued, certain rules relating to real estate have been so established by state decisions as to become rules of property and action in the state, those rules are accepted by the federal courts as authoritative declarations of the law of the state. (3) But where the law of the state has not been thus settled, it is not only the right, but the duty of the federal court to exercise its own judgment, as it also always does, * * * upon the doctrine of commercial law and general jurisprudence. (4) So, when contracts and transactions are entered into and rights have accrued under a particular state of the local decisions, or when there has been no decision by the state court on the particular question involved, then the federal courts properly claim the right to give effect to their own judgment as to what is the law of the state, applicable to the case, even where a different view has been expressed by the state court after the rights of parties accrued. But even in such cases, for the sake of comity and to avoid confusion, the federal court should always lean to an agreement with the state court, if the question is balanced with doubt.'

The doctrine is discussed, and applied, in Burgess v. Seligman, 107 U.S. 20, 2 Sup.Ct. 10, 27 L.Ed. 359, and numerous other cases cited in the opinion.

In Swift v. Tyson, 16 Pet. 1, 10 L.Ed. 865, Mr. Justice Story, construing the thirty-fourth section of the Judiciary Act (Act Sept. 24, 1789, c. 20, 1 Stat. 92 (Comp. St. 1913, Sec. 1538)), says that:

It is limited in 'its application to state laws, strictly local, that is to say, to the positive statutes of the state, and the construction thereof adopted by the local tribunals, and to rights and titles to things having a permanent locality, such as the rights and titles to real estate, and other matters immovable and intraterritorial in their nature and character.'

So, in McGoon v. Scales, 9 Wall. 23, 19 L.Ed. 545, Mr. Justice Miller said:

'It is a principle too firmly established to admit of dispute at this day that to the law of the state in which land is situated must we look for the rules which govern its descent, alienation, and transfer, and for the effect and construction of conveyances.'

The same learned justice in Brine v. Insurance Co., 96 U.S. 627, 24 L.Ed. 858, discussing the suggestion that the federal court should exercise its independent judgment upon a question affecting the title to real property, there an equity of redemption, in regard to which there was in force a state statute, said:

'To do so is at once to introduce into the jurisprudence of the state of Illinois the discordant elements of a substantial right which is protected in one set of courts and denied in the other, with no superior to decide which is right.'

While we do not deem it of importance, we note the fact, pressed upon our attention, that the statute of uses, 27 Henry VIII, is in force in South Carolina, by virtue of an enactment of the Legislature of that state. Code 1912, vol. 1, Sec. 3673. It is manifest, therefore, that we must endeavor to ascertain and declare the law of the state of South Carolina in regard to the determinative question involved.

In Steele v. Smith, 84 S.C. 464, 66 S.E. 200, 29 L.R.A. (N.S.) 939, it appears that plaintiffs were the same persons as appellees in this case, and claimed title to a portion of the same tract of land conveyed by John Steele to Joseph A. Steele, in the same right as they claim in this record. Defendants, in that case, claimed under the same right as appellant does here, and had such title as was conveyed by John G. Steele to Pagan. The case so far is, therefore, on all fours with that presented in this record. The opinion of the court was written by Chief Justice Jones. Several of the counsel appearing here were of counsel in that case and many of the authorities cited and relied upon in this court were cited upon the argument of that case. The Chief Justice states the contention made by the parties:

'Plaintiffs claim that John G. Steele had only a life estate, and having died without executing the power * * * by will, they are entitled to partition * * * as heirs of John G. Steele, and remaindermen under the deed of John Steele, Sr. The court sustained this contention. The defendants appellants contend that under the rule in Shelley's Case John G. Steele had a fee-simple estate, * * * which they acquired.'

The Chief Justice,...