Johnson v. Umsted, 9539.

• Decision Date: 01 March 1933
• Docket Number: No. 9539.,9539.
• Parties: JOHNSON v. UMSTED et al.
• Court: U.S. Court of Appeals — Eighth Circuit

64 F.2d 316 (1933)

JOHNSON v. UMSTED et al.

No. 9539.

Circuit Court of Appeals, Eighth Circuit.

March 1, 1933.

Forrest B. Jackson, of Jackson, Miss., Henry Stevens, of Magnolia, Ark., Price, Cassidy & McLain, of McComb, Miss., and Green, Green & Jackson, of Jackson, Miss., on the brief), for appellant.

T. J. Gaughan, of Camden, Ark. (E. E. Godwin and J. E. Gaughan, both of Camden, Ark., on the brief), for appellees.

Before KENYON, GARDNER, and SANBORN, Circuit Judges.

SANBORN, Circuit Judge.

The appellant will be referred to as plaintiff, and the appellees as defendants, as in the court below. The plaintiff is an illiterate colored woman about 60 years of age. The defendants are the administratrix of the estate and the heirs of Sid Umsted, a white man, who died November 3, 1925. The suit is brought in equity to recover an undivided one-quarter interest in 80 acres of land in Ouachita county, Ark., upon which there are eight producing oil wells, and for an accounting of the royalties collected therefrom by Sid Umsted during his lifetime and by his estate since his death. In her complaint, the plaintiff asserts that Umsted procured the property and royalties through fraud and under such circumstances that in equity they were impressed with a trust in her favor. Her assertions are denied by the defendants. In addition, the defendants claim that the plaintiff's suit is barred by laches and limitations. A decree of dismissal was entered in the court below, and from that decree the plaintiff has appealed.

Many of the facts are not in dispute, and the record contains all of the evidence offered upon the trial. The ultimate question which we are called upon to determine is whether, upon the facts conceded and those established by competent and relevant testimony, the decree below was justified, or whether such facts require a different decree.

An appeal in an equity suit invokes a new hearing and decision of the case upon its merits upon the lawful evidence. Anderson v. Hultberg (C. C. A. 8), 247 F. 273, 279; Dowagiac Mfg. Co. v. Lochren (C. C. A. 8) 143 F. 211, 214, 6 Ann. Cas. 573; Unkle v. Wills (C. C. A. 8) 281 F. 29, 34; Westermann v. Dispatch Printing Co. (C. C. A. 6) 233 F. 609, 611 (reversed on other grounds 249 U. S. 100, 39 S. Ct. 194, 63 L. Ed. 499); Presidio Mining Co. v. Overton (C. C. A. 9) 270 F. 388, 390; American Central Ins. Co. v. Harmon Knitting Mills (C. C. A. 7) 39 F.(2d) 21, 24; Jonah v. Armstrong (C. C. A. 10) 52 F.(2d) 343, 345. The reviewing court will, if possible, dispose finally of an equity suit upon the record on appeal and not remand it for further trial in the District Court. Harrison v. Clarke (C. C. A. 8) 182 F. 765, 767; Unkle v. Wills (C. C. A. 8) 281 F. 29, supra.

Since the rulings of the lower court upon the admissibility of evidence in an equity suit are in no way binding upon us and if wrong do not constitute reversible error (Unkle v. Wills, supra), it is unnecessary to discuss the assignments of error based upon them.

In determining what the facts are from the evidence which we regard as relevant and competent, we have not lost sight of the established rule that the findings of the trial court in suits in equity are presumptively correct, and, unless clearly against the weight of the evidence or induced by an erroneous view of the law, will not be disturbed. United States v. United Shoe Machinery Co. of New Jersey, 247 U. S. 32, 41, 38 S. Ct. 473, 62 L. Ed. 968; Butte & Superior Copper Co., Ltd., v. Clark-Montana Realty Co., 249 U. S. 12, 30, 39 S. Ct. 231, 63 L. Ed. 447; Unkle v. Wills (C. C. A. 8) 281 F. 29, 36, supra; Lion Oil Refining Co. v. Albritton (C. C. A. 8) 21 F.(2d) 280, 282; Nave-McCord Merc. Co. v. Ranney (C. C. A. 8) 29 F.(2d) 383, 389; Karn v. Andresen (C. C. A. 8) 60 F.(2d) 427, 429. Neither are we unmindful that it requires clear and convincing evidence to establish an implied or resulting trust in land by parol. Streeter v. Gamble, 298 Ill. 332, 131 N. E. 589, 23 A. L. R. 1485; Lefkowitz v. Silver, 182 N. C. 339, 109 S. E. 56, 23 A. L. R. 1491 and note; Howland v. Blake, 97 U. S. 624, 626, 24 L. Ed. 1027; Hopkins v. Grimshaw, 165 U. S. 342, 352, 17 S. Ct. 401, 41 L. Ed. 739; Levis v. Kengla, 169 U. S. 234, 236, 18 S. Ct. 309, 42 L. Ed. 728; Reed v. Munn (C. C. A. 8) 148 F. 737, 744 (certiorari denied 207 U. S. 588, 28 S. Ct. 255, 52 L. Ed. 353).

We shall state the facts as we find them to be from the admissions of the parties and from the lawful evidence:

The plaintiff is the widow of Sam L. Johnson, also a negro, who died October 22, 1919. Johnson had been employed by Sid Umsted, who operated a sawmill upon the 80 acres, an undivided interest in which is the subject of this suit. Sid Umsted had acted as his business and financial adviser. Sam Johnson, at the time of his death, owned this 80 acres. This land was his homestead. It was subject to a mortgage in favor of M. P. Watts & Bro. for approximately $1,000, and was also subject to an oil and gas lease to E. P. Edwards, trustee, dated May 19, 1919, under which lease Sam L. Johnson had reserved a one-eighth royalty in all oil produced from the land. This lease was subsequently assigned by the lessee to the Standard Oil Company and the Gulf Refining Company, which developed the land for oil and gas. Sam Johnson left surviving him his wife, the plaintiff, his half-brother, Jesse Johnson, and his sister, Jane Warren. Upon the death of Sam Johnson, the plaintiff acquired a homestead right in the land and became the owner in fee of an undivided one-half; Jesse Johnson and Jane Warren became the owners of the other undivided one-half, subject to the homestead right of the plaintiff. So long as the plaintiff did not abandon this land as her homestead, she was entitled to all rents, profits, and royalties therefrom. If she abandoned her homestead, Jesse Johnson and Jane Warren would become entitled to the rents and royalties from their undivided one-half. The plaintiff continued to live on the homestead after her husband's death. Sid Umsted was her business and financial adviser, and she relied upon him for advice and assistance in dealing with her land. Oil was discovered about one mile from this land in July, 1922. C. M. Martin attempted to buy her interest in the oil upon her land, but she refused to deal with him and referred him to Umsted, stating that she had turned over everything to Umsted to attend to for her. On July 26, 1922, C. M. Martin, acting for himself, procured from Jane Warren a deed conveying her interest in this land to the plaintiff. On July 27, 1922, Sid Umsted, acting for the plaintiff, procured from her a deed conveying to C. M. Martin sixty-three sixty-fourths of all oil, gas, and mineral in the land, subject to the lease to Edwards, trustee. The expressed consideration in this deed was $2,000. As the result of this transaction, the mortgage to Watts Bros. was paid and the plaintiff received $500. At the time she signed this deed, she did not understand its nature or effect, nor was it explained to her. She did not intend to convey sixty-three sixty-fourths of her oil nor to abandon her homestead rights. She signed the instrument at the request and upon the advice of Sid Umsted. Jane Warren brought suit on August 11, 1922, in the state court to set aside her deed to Mandy Johnson, joining her with Martin and Jesse Johnson as defendants. In the first complaint filed, Sid Umsted was named as a defendant, but a substituted complaint was later filed in which his name was omitted, and he was not a party to the action. It later appearing that Jesse Johnson had conveyed a part of his interest to L. J. Cook, who was his attorney, Cook was brought in as a defendant. In the Jane Warren suit, Mandy Johnson was represented by counsel procured for her by Sid Umsted. In procuring counsel to represent her, Sid Umsted acted for her and with respect to her homestead and for the purpose of protecting her rights therein. While that suit was pending and on September 7, 1923, Sid Umsted purchased from Jesse Johnson and L. J. Cook the Jesse Johnson undivided one-quarter of this land, including all oil and gas rights, paying $7,000 therefor. He did not advise the plaintiff of this purchase, and she has never consented to it. She first learned of it subsequent to October 17, 1923. On October 17, 1923, Martin procured a deed from Mandy Johnson conveying the entire 80 acres to him and all oil and gas that should be produced therefrom in the future. The case of Jane Warren against Mandy Johnson and others was decided by the Supreme Court of Arkansas on April 20, 1925. See Warren v. Martin, 168 Ark. 682, 272 S. W. 367. It was determined that the mineral deed given by Mandy Johnson to Martin constituted an abandonment of her homestead, and that the deed from Jane Warren to her was void. After the decision of the Supreme Court of Arkansas, Mandy Johnson was without any right, title, or interest in this land if her deeds to Martin were valid, Jane Warren was the owner of an undivided one-quarter of the land and royalties, Sid Umsted had an undivided one-quarter, and Martin was the owner of record of an undivided one-half.

In January, 1926, Mandy Johnson, who had become a citizen of Louisiana, brought a suit in the federal court against Martin to cancel the two deeds which Martin had obtained from her. The court found that the deeds had been obtained by fraud and should be canceled, and a decree was entered to that effect on March 21, 1927. This decree, of course, did not and could not affect the rights of grantees, under deeds from C. M. Martin, Jane Warren, and Jesse Johnson, who were not parties to the suit. The present suit was commenced July 6, 1927.

The royalties which have been received by Sid Umsted during his lifetime and by his estate since his death from the Jesse Johnson interest exceed $7,000, the amount which he paid for such interest.

The controverted questions of fact in the court...