Reynolds v. Maples, 14556.

• Decision Date: 23 June 1954
• Docket Number: No. 14556.,14556.
• Citation: 214 F.2d 395
• Parties: REYNOLDS et al. v. MAPLES.
• Court: U.S. Court of Appeals — Fifth Circuit

214 F.2d 395 (1954)

REYNOLDS et al. v. MAPLES.

No. 14556.

United States Court of Appeals Fifth Circuit.

June 23, 1954.

Ben F. Cameron, Charles B. Cameron, R. W. Thompson, Jr., Gulfport, Miss., V. W. Gilbert, O. Winston Cameron, Meridian, Miss., for plaintiffs and appellants.

Luther Maples, Gulfport, Miss., M. M. Roberts, Hattiesburg, Miss., J. O. Moss, Darwin Maples, Lucedale, Miss., for appellee and cross-appellant.

Before BORAH and RUSSELL, Circuit Judges, and DAWKINS, District Judge.

RUSSELL, Circuit Judge.

On May 4, 1951, for and in consideration of $1,000 cash in hand paid, Florian Maples granted to L. O. Murphy and C. B. Cameron a 24 day option to purchase certain described timber, agreeing to execute and deliver a warranty deed covering the timber to the Commercial National Bank, Laurel, Mississippi, "if and when the additional sum of $199,000.00, is deposited in said bank by the said L. O. Murphy and C. B. Cameron, on or before May 28, 1951."¹

Murphy and Cameron went to the bank shortly after it opened on May 28th and displayed the contract to its president, Maddox, telling him that they were ready to complete the transaction. Prior to that time Cameron had contacted R. D. Sanders to make arrangements for the latter to furnish the necessary funds to finance the transaction. Sanders authorized Cameron to go to the Laurel bank on May 28th and draw a draft through the Deposit Guaranty Bank and Trust Company, Jackson, Mississippi, and have the Laurel bank telephone the Jackson bank which in turn would telephone him and he would authorize payment of the draft so that the money could be deposited in the Commercial National Bank on that day. Depending upon this arrangement, Cameron, or Maddox at his direction, drew a draft on Cameron through the Jackson bank. This draft, together with the option contract, was placed in the hands of Maddox, who was told that he could verify the authenticity of the draft by calling the Jackson bank. Maddox took possession of the draft with the understanding that Cameron would retain control of it until Maples delivered the deed to the bank and Cameron approved it. Cameron did not intend to release the draft for deposit until Maples presented the deed and it was compared with the option contract. At the suggestion of Maddox, verification of the draft was deferred until such time as the executed deed should be delivered to the bank. That afternoon at about 3:00 o'clock, Maples having failed to show up with the deed, Cameron requested that the draft be returned to him and he destroyed it. Thereafter, further negotiations were had with Maples in an effort to effect a purchase of the timber in accordance with the option. Maples took the position that the option expired by its own terms on May 28th upon the failure of the optionees to actually deposit the $199,000 in the Commercial National Bank on or before that date, and that he was under no obligation to consummate the sale.

By an instrument dated December 14, 1951, Murphy and Cameron attempted to sell, convey and quitclaim to Sam J. and W. N. Reynolds, appellants, the timber described in the option agreement of May 4th, together with the rights, terms and conditions set forth in the option. The sole consideration for this purported conveyance was $10 in cash paid to Murphy and Cameron. A collateral agreement was entered into among those parties which, inter alia, obligated the grantees therein, the two Reynolds brothers, to institute and prosecute a suit for specific performance of the option contract against Maples to establish title to the timber and to "recover all rights growing out of the contract." The profits resulting from the sale of the timber, if the suit should be successful, or the proceeds of any settlement of the litigation, were to be distributed, after the payment of specified expenses, 33 1/3% to Charles B. Cameron and Ben F. Cameron as attorneys fees, 23% to Murphy and 23% to Cameron's wife, Dorothy Heideberg Cameron. The latter two amounts were to be reduced by sums sufficient to settle certain family debts. The remaining 20 2/3% was apparently to be retained by appellants.

The foregoing facts, which were fully developed by affidavits, counter-affidavits and depositions, furnished the topography for the battle lines which were laid in the trial court. In view of the result reached by the court below, they are stated most favorably for appellants. Appellants sought specific performance of the option contract, damages and other related relief. In addition to denying that he was obligated to convey the timber to appellants or their grantors, Maples, appellee, denied that appellants were the real parties at interest and sought to implead Murphy, Cameron, Mrs. Cameron and Howard Cameron, a brother of Cameron who was to participate in the proceeds of the litigation as a creditor of Cameron, as the real parties at interest and indispensable parties. He alleged that appellants were being used merely as conduits in order to obtain diversity of citizenship upon which the jurisdiction of the court depended. By way of counterclaim, appellee sought to recover damages, actual and punitive, against appellants and the named third party defendants for slander of title to his property resulting from their alleged publication of the purported deed and collateral contract of December 14, 1951.

The court granted appellants' motions for summary judgment on the issues raised by the complaint and answer as to its jurisdiction and on the issues raised by the counterclaim. The counterclaim was dismissed. Appellee's motion for leave to serve the third party complaint was overruled and the motions of appellants and each of the named third party defendants to dismiss the third party complaint were sustained. The court held, however, that the record failed to sustain appellants' claim that Murphy and Cameron had exercised the option in accordance with the agreement and granted appellee's motion for summary judgment on that issue. Judgment was entered dismissing the complaint.

The court held that as a matter of law the facts disclosed by the record do not support appellants' theory that acceptance of the option was effected by Murphy and Cameron through their conditional tender of the...