Kinne v. Webb

• Decision Date: 06 February 1893
• Docket Number: 179.
• Parties: KINNE et al. v. WEBB et al.
• Court: U.S. Court of Appeals — Eighth Circuit

54 F. 34

KINNE et al. v. WEBB et al.

No. 179.

United States Court of Appeals, Eighth Circuit.

February 6, 1893

O. H Dean, (I. J. Ketcham and C. O. Tichenor, on the brief,) for appellants.

L. C Krauthoff, (E. O. Brown, J. V. C. Karnes, and Daniel B Holmes, on the brief,) for appellees.

Before CALDWELL and SANBORN, Circuit Judges, and SHIRAS, District judge.

SANBORN Circuit Judge.

This is a bill in equity to rescind a sale and avoid a deed made by the appellant Sarah M. Webb, now Sarah M. Kinne, April 24 1883, of all her interest in the estate of her deceased husband, John C. Webb, to his children and devisees, Elijah T. Webb, Martha E. Hall, and Mary S. Burgner. The circuit court dismissed the bill. 49 F. 512.

In March, 1877, John C. Webb resided in Webb City, Jasper county, Mo., and was the owner of about 1,000 acres of land in that county, 160 acres of which was valuable mineral land, from which lessees of his were mining zinc and lead. He was a widower, and had the three children above named. He had conveyed to the defendant Martha E. Hall 20 acres of mineral land, and on the 3d day of March, 1877, he conveyed to the defendants Webb and Mary Burgner 40 acres of land of that character, in order that his gifts to each of his three children might be equal; but this deed was not recorded, nor did the grantees take possession under it until April 24, 1883. On March 4, 1877, he intermarried with the complainant Sarah M., and died April 13, 1883. He left a will, by which he bequeathed to his widow his household furniture and the homestead and $600 a year so long as she remained his widow. She had the right, under the statutes of Missouri, to refuse to accept the provisions of the will, and to receive in lieu thereof one fourth of the personal estate and her dower right in the lands. Rev. St. Mo. Sec. 4517. He owned a bank at Webb City, whose capital was $6,500. He bequeathed the lot on which the bank building stood, the building, its furniture, the profits derived from the bank capital, and $15,000 to the defendant Webb. He made other specific bequests, and then devised the remainder of his estate to his three children. This will was made in August, 1882, and named the defendant Webb as executor. On April 7, 1883, he conveyed the bank capital and $16,100 which he had on deposit in the bank to the defendant Webb, and he received this transfer in satisfaction of the bequest contained in the will of $15,000 and the profits of the bank capital. The estate consisted of personal property of the value of about $16,000, about 900 acres of land, of no great value, (unless ore should be subsequently discovered on it,) 120 acres of mineral land, from which the deceased had been receiving a royalty of from $1,000 to $2,000 per month, and town lots in Webb City. Webb City had from 1,000 to 2,000 inhabitants, and was dependent entirely upon the mining operations for its existence. The great value of the estate (if it had such value) was in the 120 acres of mineral land and the town lots, and that value was entirely dependent upon the successful continuance of the mining. In 1878 and 1879 mining upon these lands had been successful and lucrative, but the ore had been taken from near the surface of the ground. In 1883 and 1884 these runs of ore near the surface seemed to be nearly exhausted. The machinery upon the Webb land was insufficient to sink deep shafts and pump the water from them, so that the miner could work, and the lower runs of ore which subsequently made the land valuable had not been discovered. No one, apparently, knew they were there. Between 1879 and 1883 many miners in and about Webb City had become discouraged, and moved away from the town. Its population had diminished, some of the houses had been moved away to adjoining cities, until in 1883 lots were not salable at any price, their value was merely nominal. The stock of the mining company which was paying the royalty to the Webb estate had become of nominal value, the company itself was insolvent, and the manager was trying to sell his machinery, and abandon his operations. The complainant Sarah M. Webb was an intelligent, capable, well-informed lady, who had been familiar with her husband's property, and had at times had charge of his promissory notes and papers. She understood the precarious and speculative nature of the property of the estate; that, if the lessees ceased mining, it would become of little value, and Webb City would be an abandoned town, but that, if sufficient ore could be developed and profitably mined, the property would be of very great value.

Immediately after the death of her husband she offered her interest in the estate for sale. She offered it at different times to two of her neighbors for $8,000 and $10,000 respectively. They refused to buy, but suggested that the defendant Webb might do so. She persuaded them to go to him and get him to buy. They did so, and the result was that she offered to sell her interest to him for $15,000, the household furniture, a cow, and horse and buggy, and he offered her $8,000. She said she would consult an attorney before she would take that, and broke off the conference. She did consult the attorney of her deceased husband. He advised her that she was entitled to one fourth of the personal estate and her dower in the realty, and that she ought to get from $30,000 to $50,000 for her interest. She inquired of this attorney and of the lessee and learned from them the amount of royalties received monthly from the mines. She knew before she made her deed of the conveyance of the 40 acres to the defendants Webb and Mary Burgner in 1877, and of the transfer of the bank capital and deposits in April, 1883, and with all this knowledge, after consulting with at least three business men, whom she selected as friends of hers, and with her deceased husband's attorney, she sold and conveyed her interest to the three children for the exact price she first asked them for it, which amounted in the aggregate to about $17,000.

The bill alleges that this estate was worth $300,000; that defendant Webb was his father's confidant, and had full knowledge of this fact; that he importuned and persuaded the widow to sell her interest; that he falsely represented to her that the estate was not worth more than $60,000; that the complainant was much fatigued; that she had no legal or independent advice, and no knowledge of the value of the estate except that given to her by the defendant Webb, and that she was induced to convey by his misrepresentations. The complainant Sarah does testify that the defendant Webb told her that the estate had been appraised, and would not reach over $60,000 or $80,000, and was much involved; but he denies this, and says he told her that it might be worth $75,000 or $100,000 or more. Every other allegation of this bill tending to prove fraud or undue influence by him is not only not established, but it is disproved by a large preponderance of the testimony. The weight of the testimony is that the estate was worth from $45,000 to $75,000, but that it was of such a speculative character that it was difficult to appraise it.

The original bill was filed February 7, 1890. On October 4, 1890, complainant filed an amended bill in which, in addition to the averments of the original bill, she pleaded the deed of March 3, 1877, to the defendants Webb and Mary Burgner, and the transfer to the defendant Webb of the bank capital and deposits April 7, 1883, alleged that she first learned of these in August, 1890, and prayed that they might be declared void, and that her share of the moneys and the 40 acres might be accounted for by the grantees. The record, however, conclusively proves that all the facts relative to this deed and transfer were disclosed to her in a deposition of the defendant Webb, taken at her instance in a former suit between them, in July 1884, and that she knew of the deed soon after her marriage in 1877, and of the transfer of the bank capital and deposits early in 1883. She received the proceeds of her sale, and invested it in real estate in Carthage, Mo., Kansas City, Kan., and in other ways, and never returned or offered to return any of it to the purchasers. On July 28, 1883, she filed in the probate court her refusal to accept the provisions of the will. On the same day she brought a suit to set aside her deed on the ground that it was procured by fraud and misrepresentation. She caused her own deposition to be taken in this suit, and March 31, 1884, she dismissed it. April 18, 1884, she commenced another suit for the same cause. July 28, 1884, she caused the deposition of the defendant Webb to be taken in that suit, and she dismissed it December 2, 1884. During the years 1883 and 1884 the depreciation in the value of property about Webb City continued, and in 1885 the defendants reduced the royalty charged their lessees about 25 per cent. The lessees then expended about $100,000 in new and improved machinery, sunk deeper shafts, and found the lower runs of ore in quantities seemingly inexhaustible. Between 1884 and 1890 the defendants themselves expended in improvements on these lands more than $50,000. Prosperity returned to Webb City; the miners came back; they filled the vacant houses and built new ones; the royalties derived from the lands amounted at times in 1889 and 1890 to $4,000 a month, and averaged nearly $3,000 monthly. The lands of the estate increased in value proportionately, and then the complainant filed this bill.

1. Conceding for the present that the deed of April 24, 1883 was obtained from the complainant Sarah by the fraud and misrepresentation of the defendant Webb, she cannot maintain this bill. She discovered every material fact she now knows relative to the...