May v. Moss
| Decision Date | 27 April 1954 |
| Docket Number | No. 14963.,14963. |
| Parties | MAY v. MOSS. |
| Court | U.S. Court of Appeals — Eighth Circuit |
Harry E. Meek, Little Rock, Ark. (A. F. House, Little Rock, Ark., on the brief), for appellant.
D. D. Panich, Little Rock, Ark., for appellee.
Before SANBORN, WOODROUGH and THOMAS, Circuit Judges.
The action stated in the complaint in this case was a plenary action in equity brought by the trustee in bankruptcy to recover certain timber lands in Arkansas that had been transferred by the bankrupts by special warranty deed before bankruptcy to one Mosser, named defendant. The case came on for hearing and it appeared that Mosser was not the owner but had only a lien upon the lands, and also that he had entered into a sales contract with W. D. May which obligated Mosser to sell and May to buy the lands for $125,000 of which May had paid $5,000 earnest money. The three parties agreed to a compromise and the court entered a consent decree on May 23, 1950, which vested the title to the lands in the trustee, subject to a lien in favor of Mosser in the sum of $71,250, and permitted May to intervene as a petitioner for specific performance of the sale contract. The decree ordered him to pay the remaining $120,000 of the purchase price of the lands within thirty days of the decree and provided for a transfer of them to him upon his making the payment. It also directed the satisfaction of Mosser's lien out of the money to be paid by May.
But May did not have the money to carry out his obligation to purchase as ordered in the decree, and the parties were again before the court on July 3, 1950, when a new compromise agreement was reached and a new consent decree was entered by the court by which May's purchase price for the lands was raised from $125,000 to $145,000.
In recognition of the fact that May did not have the money to buy the lands and pay off the lien as he had agreed and was ordered to do in the decree of May 23d, the agreement and consent decree of July 3d accorded him the right to go upon and take timber from the lands, but ordered him to make payments of not less than $21,666.66 monthly, first to the owner of the lien until it was discharged, and then to the trustee as owner of the title. The decree provided for transfer of the lands to May upon his fulfillment of the prescribed obligations.
On December 28, 1950, the parties were again before the court and it clearly appeared, as found by the court, that
May made no claim that he had complied with the July 3d consent decree, but appealed to the judge, saying: "* * * I wish it would be possible for the Judge to let me have two or three days to close this deal here * * * Judge, Your Honor * * * the possibilities are I will be called back into active duty within the near future * * * it doesn't look like three or four days to close out a deal and get their money will jeopardize anyone in any way." The court acceded to the appeal forthwith without further discussion and directed that an order be prepared reserving "four days to pay the complete matter off." Counsel for the trustee answered, "If the court says so there is nothing else I can do."
An order was accordingly entered on December 30, 1950, which modified the order of July 3d, 1950, and gave May four days from December 28, 1950, to pay to the trustee in cash the balance of his purchase price in the sum of $102,697.33, together with "interest as may be due."
May succeeded in borrowing the amount and deposited it in the form of a certified check with the clerk of the court within the four day period, and immediately thereafter, on January 2, 1951, May filed his petition praying that the trustee be ordered to convey the property to him and to free it of the lien.
Three days later, on January 5, 1951, the trustee filed response to that petition praying that it be denied and on the same date filed a motion to modify the order entered on December 28, 1950, extending May's time for payment. The trustee charged that on that day May had been in default of performance of the conditions upon which he had been accorded the right to acquire the lands by the consent decree of July 3d, 1950, and that the court did not have jurisdiction on December 28, 1950, to make changes, extensions or other alterations in the consent decree. It was also alleged that the trustee had received an offer of $190,000.00 for the lands from another party.
On March 7, 1951, the court entered its decree to the effect that the court had been without jurisdiction to adjudicate or to enforce in this action the rights of the parties which arose out of the sale contract. It was of opinion that the jurisdiction was in bankruptcy. The decree dismissed May's intervention and vacated the several orders by which May had been awarded enforcement. It also dismissed May's petition of January 2, 1951, which prayed for the transfer of the lands to him and the parties consenting, it directed that his certified check, which he had delivered to the clerk and which had never been cashed, and all of the moneys he had paid on his purchase price be returned to him. They were returned to him and he accepted them. Apparently on April 26, 1951. But before taking the money back May filed notice of appeal and moved for leave to accept his money "without prejudice to his right to appeal." That motion was granted.
On the appeal taken by May pursuant to his Notice of Appeal, filed April 3, 1951, this court reviewed the decree of March 7, 1951, in May v. Moss, 194 F.2d 133, and held that the trial court had not been without jurisdiction to permit the intervention of May. It declared that "Having jurisdiction of the action the court had power to enter the consent decree of May 23, 1950, vesting title to the lands in controversy in the trustee subject to a lien in favor of Mosser and to Mosser's obligation to convey the property to May." The decree of March 7, 1951, was accordingly reversed and the case was remanded for further proceedings in accordance with this court's opinion. 194 F.2d at page 137.
After the mandate of this court was docketed in the District Court on May 26, 1952, May did not renew his tender of purchase price but the parties brought the case before the court and after hearing a final order was entered on September 1, 1953, which modified the order of December 28, 1950, by eliminating the four day extension of time granted therein and directing a public sale of the lands and dismissed May's intervention for want of equity, at his costs.
May prosecutes this appeal from that final order to reverse (1) the dismissal of his intervention; (2) the modification of that part of the order of December 28, 1950, granting the four day extension, and (3) the assessment of costs against him.
The record does not identify the particular pleadings upon which the hearings were had which resulted in the final order now appealed from, but appellant asserts that the trial was on the merits upon the trustee's motion to modify the order of December 28, 1950, by eliminating therefrom May's four day extension and on May's response to that motion.
Those pleadings do not reflect the condition of the lands at the time of the hearings and order now appealed from. The record indicates, however, that the lands had been sold at public auction pursuant to an order of the referee in bankruptcy on April 12, 1951; that James H. Cross became the purchaser at the price of $200,000, and that he had entered into possession and removed the timber so as to reduce the value far below May's purchase price.
The appellant contends for reversal that the trial court erred in modifying its order of December 28, 1950, by eliminating the four day extension. He argues to the effect that, (1) the court erred in its application of the rule that a consent decree cannot be modified except by consent; that (2) the court abused its discretion in denying the four day extension because May had materially altered his position in reliance thereon; (3) the trustee in bankruptcy was estopped to challenge May's rights as a purchaser.
The opinion and judgment here appealed from reflect that subsequent to appeal the trial court took meticulous pains to conform its proceedings to the opinion of this court. At the outset of its opinion accompanying the judgment now before us the court recalled that the pronouncements of this court "are now the law of this case" and it quoted those which established the jurisdiction in respect to May's intervention and the validity of the consent decree of May 23, 1950. It then quoted from our opinion, 194 F.2d at page 137:
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and stated:
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