Suit by Mrs. Louie H. Keith, as executrix of the will of John F. Anderson, deceased, and others, against Russell A. Alger. From a decree dismissing the bill, complainants appeal. Affirmed.
The bill in this case was filed by the complainant as executrix of John F. Anderson, and by certain other persons as his devisees and heirs at law, for the purpose of setting aside, for fraud, a judgment obtained against them in the Circuit Court of the United States, sitting at Nashville.
The bill alleged that John F. Anderson died in Franklin county about January 1, 1894, the owner of certain real estate, which he devised to the complainants.
The bill further alleges that prior to January 11, 1889, the said Anderson was the owner of 14,804 acres of mountain lands, and on said date executed to Sheridan, Green & Co., a real estate firm then doing business in Chattanooga, this state, an option and title bond, in which he obligated himself, for a consideration of $500 cash paid, to make conveyance to the said firm of said mountain lands on the payment to him of $4 per acre therefor; that subsequently, on March 4, 1889, said Anderson executed to the defendant, Alger, a general warranty deed, conveying to him the lands above mentioned, for the recited consideration of $51,814 in cash, and three notes, due in one, two, and three years, aggregating $44,412, and one other note for $7,402, making altogether $103,628; that out of the consideration thus paid by Alger the said Anderson was paid by Sheridan, Green & Co. $4 per acre for all of the land conveyed, less $500 paid at the time of the execution of the option, the total amount received being less than $60,000.
It is further alleged that on August 11, 1894, the defendant, Alger, filed a bill in the United States Circuit Court for the Middle District of Tennessee against Sheridan, Green & Co. and the present complainants; that in this bill Alger alleged that previous to the 4th day of March, 1889, he had agreed to purchase the 14,804 acres of land at the price of $7 per acre, amounting in all to $103,628; that on the 4th day of March, 1889 he closed the contract, and took from Anderson and wife a warranty deed to the property; that the purchase was made through Sheridan, Green & Co., as agents of Anderson; and that the said Alger was induced to buy the land by fraud and imposition perpetrated by the said Anderson and his agents, Sheridan, Green & Co., by several means, as follows, viz.:
"That they bribed and paid a large sum to one A. J. Freer, agent and timber expert of said Alger, who was sent to examine the timber on said lands, and who, on account of that bribe, falsely reported that he found timber thereon in quantity and quality as represented, whereas, in truth, there was but little timber of any value on said lands; that they procured false surveys to be made, including a large acreage of land to which Anderson had no title; that they procured the face of certain coal veins to be painted, whereby another agent of the said Alger, who was sent to examine the lands, was induced to report that there was a valuable coal deposit on said lands.
"It was averred by complainant in said bill [defendant, Alger] that he first had his suspicions as to the false representations concerning the quality of and title to said lands aroused in December, 1893, and then caused a survey to be made to ascertain the extent of the shortage; that this survey was not finished until April, 1894, and that then for the first time was revealed the full extent of the fraud perpetrated on him, that after this discovery as to the acreage he caused a full investigation to be made, and, to his great surprise, discovered the other frauds alleged, as hereinbefore stated. By means of these frauds the said Alger claimed that he had been imposed upon and induced to pay $103,628 for lands barely worth one-tenth of the sum, or at most not exceeding $15,000, and in addition had been caused to pay out taxes on the lands amounting to $1,500. By an amendment filed to said bill it was alleged that the land was then in the same condition as when purchased, and a reconveyance thereof was tendered with the said amendment. A rescission of the sale was prayed, together with a decree in favor of the said Alger for the purchase money, with interest, and all expenses, taxes, etc., paid on account of the sale. It was also charged in said bill that John W. Gonce, one of the defendants, was a party to the sale, and had included in it a 5,000-acre tract of land which he had quitclaimed to John F. Anderson for the purpose of being included, and that this tract in fact contained but 4,000 acres. Gonce was alleged to have participated in the frauds practiced, and to have received part of the purchase money. Recovery was sought against O. J. Sheridan and W. C. Green, as members of the firm of Sheridan, Green & Co., on account of their
perpetration of the fraud alleged in the bill."
It is further alleged in the present bill that two of the defendants to the bill just referred to filed their answer to Gov. Alger's bill in the United States Circuit Court, denying that, at the time of the purchase made by Gov. Alger of the said lands, Sheridan, Green & Co. were the agents of Anderson, and averring that in fact the said firm were the vendees of Anderson under the option and title bonds already mentioned, and the vendors of the said Alger in the sale made to him, and responsible alone to him for the frauds committed by them; that John F. Anderson had no other connection with the sale, except to make conveyance, as he was bound to do by his bond for title, and that he received of the purchase money only $4 per acre, the balance being the profits made by Sheridan, Green & Co.; that all fraud, as far as he was concerned, was denied in that answer; and that it was also denied that complainant in that bill had but recently made the discoveries referred to in the bill.
It is further alleged in the present bill that O. J. Sheridan answered that bill, denying all frauds charged therein, and denying that he acted as agent for Anderson in the negotiations between his firm and Gov. Alger, and averring that under the title bond they sold the lands on their own account.
The bill in the present case then proceeds as follows, viz.:
"On the pleadings and evidence introduced thereunder the cause was heard in the Circuit Court of the United States aforesaid on February 12, 1897, and the court, being of opinion that Sheridan, Green & Co. were agents, and not vendees, of the said John F. Anderson, and because they had paid to A. J. Freer, the agent sent by the said Alger to examine and report on said lands, one-third of the profits made by them from the sale of the said lands to Alger, decreed that the sale be rescinded, set aside, and held for naught, and that the said Alger should reconvey the premises to Louie H. Keith, as executrix of the said Jno. F. Anderson, deceased, to be sold and disposed of by her as directed by the will of her testator, and that he recover of the said Louie H. Keith, as such executrix, the purchase price paid for such land, then amounting, with interest, to $155,223.89, and $960.25 on account of taxes paid by him on account of the lands. This recovery was declared a lien upon the lands ordered to be reconveyed to the executrix, and a special commissioner was appointed to make sale of same unless the recovery should be paid within thirty days from the date thereof. Execution was awarded for any balance that might remain after crediting the decree with the proceeds of the sale. A decree was entered dismissing the bill as to O. J. Sheridan and W. C. Green, defendants named in the bill, and E. J. Linn, not named as a defendant; thus releasing them from all liability on account of the frauds charged. Decree was also rendered against Jno. W. Gonce for $23,740.89.
"On June 10, 1897, Louie H. Keith, in her own right, and as executrix of Jno. F. Anderson, deceased, T. B. Anderson, Luke Anderson, and certain other devisees of Jno. F. Anderson, deceased, and Jno. W. Gonce, having obtained leave therefor, filed their supplemental bill setting forth the proceedings which had led to the decree aforesaid, and averring that since the rendition thereof they had discovered that, soon after the said lands were purchased by the said Russell A. Alger, he had learned that his agent, A. J. Freer, had been paid a part of the profits made by Sheridan, Green & Co., and had made no objection thereto, and that he had been fully advised after said sale of all of the facts and circumstances connected therewith, and that after being so informed he still retained the said Freer in his service, and had been exercising acts of ownership over said land, and had completed the purchase thereof by paying the notes for the deferred installments of purchase money, thus ratifying and confirming said sale.
"To this supplemental bill the said Alger filed his answer, denying that he had discovered the bribery of his agent, Freer, and the other circumstances attending said sale, soon after the same was consummated, and reciting the manner in which his attorneys at Winchester had put the information in the form of a letter, thus fixing on his mind how and when he received the knowledge of the bribery of Freer. He also denied that he still retained the said Freer in his employment, but admitted that he was employed in a corporation in which said Alger held an interest to a considerable extent.
"On the rehearing of said cause under the supplemental bill and new evidence introduced, and on the whole record, a decree was entered by the United States court aforesaid on April 20, 1899, setting aside the former decree in favor of the said Alger, and dismissing the bill filed by him. From this decree the...
