Shields v. Mongollon Exploration Co.

GILBERT, Circuit Judge, after stating the case as above, delivered the opinion of the court. We are met at the threshold of this case by the motion of the defendants in error to dismiss the writ of error on the ground that the appellate jurisdiction of this court can be invoked in the present case only by an appeal. The motion is based upon the act of Congress governing the practice in territorial courts and appeals therefrom, approved April 7, 1874 (18 Stat. pt. 3, p. 27, c. 80), which provides that the judgments and decrees of territorial courts in actions at law wherein there is not a trial by jury, and wherein the issues of law and fact are submitted to and tried by the court without the intervention of a jury, can be reviewed only by appeal, and not on writ of error. The Supreme Court, in Stringfellow v. Cain, 99 U.S. 610, 25 L.Ed. 421, Hecht v. Boughton, 105 U.S. 235, 26 L.Ed. 1018, Bonnifield v. Price, 154 U.S. 672, 14 S.Ct. 1194, 26 L.Ed. 1022, and in several other decisions, has held that by virtue of this statute the appellate jurisdiction of the Supreme Court over the judgment or the decree rendered by a territorial court in a case not tried by a jury can only be exercised by appeal, and dismissed cases of that nature which had been brought before it on writs of error. But the appellate jurisdiction of this court over appeals and writs of error from the District Courts of Alaska is not ruled by the act of April 7, 1874, but by chapter 51 of the act of June 6, 1900, providing a Civil Code for Alaska (31 Stat. 414). Section 504 of that chapter gives to this court the same jurisdiction to review by writ of error or appeal final judgments and orders of the District Courts of Alaska that was given by the act creating the Circuit Courts of Appeals to review final decisions of District and Circuit Courts; and section 508 provides that: “All provisions of law now in force regulating the procedure and practice in cases brought by appeal or writ of error to the Supreme Court of the United — 396 — States or to the United States Circuit Court of Appeals for the Ninth Circuit, except in so far as the same may be inconsistent with any provision of this act, shall regulate the procedure and practice in cases brought to the courts respectively from the District Court for the District of Alaska.” The motion to dismiss is therefore denied. The defendants in error deny the power of this court to consider the assignments of error so far as they relate to the rulings of the trial court in admitting or excluding evidence, or to the alleged insufficiency of the evidence to support the findings of fact, on the ground that it does not appear from the record that written consent of the parties to waive a jury trial was filed in the court below. They rely upon sections 649 and 700 of the Revised Statutes (28 U.S.C.A. §§ 773, 875), in which it is provided that issues of fact in civil cases in any Circuit Court may be tried and determined by the court without the intervention of a jury whenever the parties or their attorneys of record file with the clerk a stipulation in writing waiving a jury, and that when an issue of fact is so tried the rulings of the court in the progress of the trial, if excepted to and duly presented by a bill of exceptions, may be reviewed by the Supreme Court; and they cite the decisions of that court in County of Madison v. Warren, 106 U.S. 622, 2 S.Ct. 86, 27 L.Ed. 311, and Bond v. Dustin, 112 U.S. 604, 5 S.Ct. 296, 28 L.Ed. 835, and other cases thereafter decided, in which it has been held that while prior to the enactment of these sections of the statutes the appellate court had no authority to revise the rulings of a Circuit Court upon the admission or rejection of testimony, or upon any other question of law arising out of the evidence where the parties had waived a trial by jury and had submitted the facts to the determination of the Circuit Court upon the evidence, after the statute such power could be exercised only upon proof of the filing of the written waiver as required thereby. If this were the ordinary case of a writ of error to review the proceedings, on a trial in a Circuit Court of a civil law case without the intervention of a jury, the objection now interposed would be well taken, for the record in this case fails to show that there was a written waiver of a jury trial. But the — 397 — act of June 6, 1900, adopting a Civil Code for the trial of causes in Alaska (31 Stat. 363, c. 19), provides that trial by jury may be waived by the parties to an issue of fact not only by written consent, but by oral consent in open court entered in the minutes. It appears both in the bill of exceptions and in the judgment of the court below that a jury trial was expressly waived upon the stipulation of the respective parties. There can be no doubt, therefore, that such oral consent, thus evidenced by the record, is as effective to preserve the right of a plaintiff in error to review the rulings of the court below as would have been a written consent under the provisions of section 649 of the Revised Statutes. The plaintiff in error contends that the court erred in overruling the objection to the question addressed to J. S. Kimball, a witness for defendants in error, when he was asked, “What did Conrad Siem do pursuant to the agreement that has been offered in evidence here, if you know?” The objection was that the evidence called for was incompetent, irrelevant, and immaterial. The court allowed the witness to give the details of the negotiations prior to the final agreement of settlement. ■ We see no error in the ruling. It certainly was not such plain error as to require this court to take notice of it in the absence of an assignment, and it was- not assigned as error. Error is assigned to the ruling of the court in sustaining the objection of defendants in error to interrogatories propounded to said witness after he had testified that Geary was not acting as his attorney at the time of the settlement, when he was asked, on his cross-examination, in substance the following questions: Did not T. J. Geary act as attorney for the J. S. Kimball Company, and did not you treat this property of the J. S. Kimball Company as your property? Did you not go, upon August 6th, to the office of Mr. Geary, and enter into that agreement with Conrad Siem in the presence of Mr. Shields? On or about August 20th, or on or about August 15th, did not you come to terms of settlement with Conrad Siem? The evidence called for by the first of these questions could not be material under the allegations of the amended complaint of the plaintiff in error. She alleged therein that on August 27, 1900, J. S. Kimball by his deed sold and — 398 — conveyed unto Conrad Siem an undivided one-fourth interest in the mining claim in controversy. It was not the theory of the complaint or of the testimony of the plaintiff in error that J. S. Kimball held an interest in the claim in controversy in trust for the J. S. Kimball Company. It is true that in the complaint in intervention in the case of J. S. Kimball and John H. Bullock against Stewart and Richards the plaintiff in error so alleged, but her amended complaint in the case at bar must be regarded as a distinct abandonment of that theory. In addition to this, there is nothing to show that the interest of the plaintiff in error was prejudiced by the exclusion of the testimony so sought, nor by the exclusion of the testimony of the witness as to what agreements had been negotiated, but not consummated, on August 6th or on August 20th. The offers of proof of the plaintiff in error in connection with this rejected testimony were, in substance, that on August 6 and on August 20, 1900, J. S. Kimball and the J. S. Kimball Company and Conrad Siem reached terms of settlement, one of the features of which was that Kimball was to convey to Siem all the mining property in Alaska that had been located in or stood in the name of John S. Kimball or the J. S. Kimball Company. It is urged that this testimony so excluded was competent and was material, for the reason that it tended to contradict certain testimony given by J. S. Kimball on his direct examination. That testimony was that three certain named claims, including the claim in controversy, were his own individual speculation, and that in the final agreement none of them was to be conveyed to Siem, either by himself or by the J. S. Kimball Company, and that the company never had any interest in either of them. Then followed the question: “At the time you signed this deed, you may state whether or not you had any knowledge whatever of it describing or omitting therefrom the mining claim in controversy known as ‘Bench Claim No. 1 Below Snow Gulch, first tier’? A. I never had dreamed of any such thing as that being in there.” Counsel for plaintiff in error argue that this answer of J. S. Kimball is a denial that at any time he had entertained the idea of, or discussed, a transfer of the claim in controversy in the settlement with Siem. We (Jo not — 399 — so understand it. To us it seems clear that the witness meant to say that in the final settlement he had never entertained the thought of transferring to Siem the claim in controversy. If such was the true meaning of his answer, the proffered evidence did not tend to contradict it, and there was no error in its exclusion. But if, indeed, there was error, it became harmless, for the reason that thereafter Siem testified as to the terms of the proposed settlement of August 6th and August 20th, and his testimony was not contradicted by any witness. The proposed settlement of August 6th is evidenced in the record by the prepared instrument of agreement which was to have been signed on that date. It contains no suggestion that Kimball was to transfer his interest in all claims in Alaska then standing in his name. On the contrary, the list of claims which was attached thereto omits any mention of the claim in controversy. Of the proposed settlement of August 20th Siem testified that the proposition of Kimball was to convey to him “all the mining property then owned by J. S. Kimball and the Kimball Company in Alaska, if I gave him a mortgage for $20,000.” It may be doubted' whether the true construction of this proposition, in view of the surrounding circumstances, was that property was to be included in the proposed transfer other than that in which both of the contracting parties were jointly interested. But if, indeed, such was the meaning of the proposition, the plaintiff in error had the benefit of Siem’s uncontradicted testimony that such a proposition had been made, and it is not reversible error that she was not permitted to inquire of Kimball whether that proposition had not been made. It is contended that the trial court erred in overruling the objection of the plaintiff in error to the second affirmative defense of the amended answer. The objection was made on the trial on the ground that the matter so pleaded did not constitute a defense or furnish ground for the reformation of the deed. No objection was interposed on the ground that the relief thereby sought could not properly be obtained in an answer to an action of ejectment. It is urged that the affirmative matter so pleaded afforded no ground for reforming the deed, because it states that the agreement which culminated in the settle — 400 — ment of August 27th was made between the J. S. 'Kimball Company and Conrad Siem, and that in the execution thereof the attorneys who prepared the deed represented to the parties thereto that it was prepared in accordance with the contract, and that the J. S. Kimball Company (not J. S. Kimball) and Conrad Siem intended at the time of its execution to make exceptions of certain properties from the deed — properties which belonged not to the Kimball Company, but to J. S. Kimball — and that the exceptions so intended to be made were not in fact made. It is argued that on these allegations it does not appear that the deed in question at law conveyed the land in dispute, since it operated only on the interest of the Kimball Company, which company, according to the answer, had no interest in the claim in controversy herein; and that, since the answer further alleges that the only description in the deed of property on which it was to operate was that of the property of the J. S. Kimball Company, the mistake, so far as that company is concerned, is immaterial, and equity will not interfere to correct it; and that ás to J. S. Kimball, he was not, according to the terms of the alleged contract, a party to the agreement of settlement, and the descriptive part of the convéyance, if it followed the contract, would not convey away any of his private property. We think that this contention ignores some of the allegations of that portion of the answer which was objected to. One of the parties who made the answer was John S. Kimball. The prayer of the answer was for the correction of the deed on the ground of mutual mistake. It is true that in the portion of the answer which is objected to it is alleged that the settlement was made between the J, S. Kimball Company and Conrad Siem, and was intended to affect property in which those parties had an interest; but it is alleged further that the attorney for the respective parties to the settlement represented not only to those parties, but to J. S. Kimball, that the deed was drawn in conformity to and in accordance with the agreement, and that J. S. Kimball, as well as the others, relied upon such statements, and that he, as well as the others, without fault or negligence, executed the same; and the answer then proceeds to set forth what he and they all supposed to be contained in the con — 401 — veyance, specifies the error in the deed, and alleges that from the deed executed by the company and Kimball to Conrad Siem reservations were omitted, by mutual mistake, of property belonging to Kimball individually. Kimball, having executed the deed in his individual capacity, and having executed the same by mistake, was shown by the allegations of this answer, if they were true, to be entitled to the relief which was prayed for. The plaintiff in error contends that the findings of fact of the trial court are not supported by the evidence. The defendants in error contend that the findings, having been made under a waiver of a jury trial, have the same conclusive effect as a verdict of a jury, and must stand, unless it appear that there was no evidence whatever to sustain them'; citing Dooley v. Pease, 180 U.S. 126, 21 S.Ct. 329, 45 L.Ed. 457, and McKinley Creek Min. Co. v. Alaska Min. Co., 183 U.S. 563, 22 S.Ct. 84, 46 L.Ed. 331. This leads us to inquire whether the findings which are here for review are findings of a court of equity or of a court of law. Under the system which prevails in the Circuit Courts of the United States, if a defendant, after being brought into a court of law to answer the plaintiff’s complaint, discovers that his defense lies in a reformation of his written contract or deed, his remedy is to file a bill in equity praying for such reformation, and for an injunction against the prosecution of the law action until a decision of the suit in equity. The Alaskan Code (31 Stat. 393, c. 38), making certain provisions for' actions of an equitable nature, contains the proviso: “This section shall not be construed so as to bar an equitable owner in possession of real property from defending his possession by means of his equitable title.” This provision was adopted from the laws of Oregon (B.& C.Comp. § 392), after it had been held in that state that the equitable defense so allowed to be pleaded could be used only for the purpose of defending possession, and not for the purpose of obtaining affirmative relief. Spaur v. McBee, 19 Or. 76, 23 P. 818. But the plaintiff in error does not, and did not in the court below, question the power of the trial court to deal with the equitable defense which was interposed in the present case,, nor its power to proceed and decree the affirmative relief which was accorded — 402 — in ordering the reformation of the deed. Of course, the uniting of law and equity in one suit, as thus sanctioned by the Code of Alaska, does not have the effect to confuse the two, but requires that, while both branches of the case are to be tried in one court, the issues in equity must be tried by the judge as a chancellor, and the issues in law must be tried by the same judge with a jury, unless a jury trial be waived. The conclusion is that the findings of fact in the present case having all been made upon the issues presented by the equitable defense, are not attended with the presumptions which apply to the findings of the court in a law case where a jury trial has been waived. We find in the evidence no ground for saying that the trial court disregarded the rule that in each case the. burden rests upon the moving party of overcoming the strong presumption arising from the terms of a written instrument, and that, if the proofs are doubtful and unsatisfactory, and there is a failure to overcome the presumption by testimony entirely plain and convincing beyond reasonable controversy, the writing will be held to express correctly the intention of the parties. Nearly all of the testimony was taken in open court, and the judge who heard the case had the opportunity to observe the demeanor of the witnesses, and to judge concerning their credibility. There was testimony to the effect that Conrad Siem had, prior to the commencement of the suit, expressly admitted the mistake. Findings of fact so made on conflicting evidence cannot be reviewed by this court unless a serious and important mistake appears to have been made in the consideration of the evidence, or an obvious error has intervened in the application of the law. This rule is so firmly established by the decisions of this and other courts as to require no citation of authorities. It is contended that the plaintiff in error is an innocent purchaser of an interest in the mining property in controversy, and is therefore entitled to prevail in the action. The plaintiff in error is the wife of H. E. Shields, who was the attorney for Siem in the negotiations leading up to the settlement and in the settlement effected on September 27, 1901. After obtaining the deed which was made at that date, Siem, on April 20, 1901, for an expressed consideration of $1, conveyed by deed of bargain — 403 — and sale to the Behring Sea Improvement & Trading Company, a corporation of the state of California, all his right, title, and interest in any claim to property, real, personal, or mixed, of every kind or description, in the district of Alaska, which deed was recorded on July 24, 1901. On August 31, 1901, that corporation and Siem each executed to the plaintiff in error, by a deed of bargain and sale, for an expressed consideration of $500, all the right, title, and interest of the grantors in the mining claim in controversy. Those deeds were recorded on September 6, 1901. On April 2, 1901, J. S. Kimball and J. H. Bullock, as plaintiffs, commenced an action in the District Court of Alaska, Second Division, against A. G. Stewart and E. Richards and others, alleging in their complaint that the plaintiffs were the owners of placer bench claim No. 1 on Glacier creek, being the same property that is in controversy in the present action; that on March 17, 1901, the defendants in said action had ousted the plaintiffs therefrom; and the plaintiffs demanded judgment for the restitution of said claim and for damages. In that action Siem, by leave of the court, intervened, and alleged that Morgan, the locator of said claim, on August 29, 1899, conveyed to J. S. Kim-ball and J. H. Bullock an undivided one-half interest in the same, that the conveyance was made to said grantees in trust for the use and benefit of the J. S. Kimball Company, that the latter, in September, 1900, conveyed to the intervener its undivided one-half interest in said property, in which conveyance J. S. Kimball joined, and that the defendants Stewart and Richards ousted and ejected the intervener from said claim. The intervener demanded judgment for the possession of the premises and for damages. That complaint was signed by Shields and Reid as attorneys, and on June 13, 1901, H. E. Shields made oath thereto. It is clear that Kimball and Bullock claimed to be the owners of the whole of the property in controversy. It was admitted in open court on the trial of the present case in the court below that H. E. Shields was the agent of the plaintiff in error in the matter of procuring the conveyances to her from Siem and from the Behring Sea Improvement & Trading Company, and that he transacted all of said business. It further appeared from the evidence that the plaintiff in error paid no money whatever — 404 — either to Siem or to the Behring Sea Improvement & Trading Company as consideration for the conveyances, but that the $500 referred to in the deed as consideration represented attorneys’ fees owing from Conrad Siem to H. E. Shields for services in connection with the settlement of August 27, 1900, and that it was in payment of said indebtedness that the conveyances were made. The plaintiff in error cannot, therefore, claim to be an innocent purchaser of an interest in the property in controversy. Nor can she claim to have succeeded to the right of an innocent purchaser, unless it can be shown that her grantor, the Behring Sea Improvement & Trading Company, was an innocent purchaser from Siem. It appeared from Siem’s testimony that he owned nearly 51 per cent, of the stock of that corporation, and that 49 per cent, is treasury stock not yet issued. In other words, Siem held all the issued stock of the corporation excepting a few shares which evidently had been placed to qualify others to act as directors. In addition to this, it further appeared that he was the president of the corporation. The knowledge that he had of the transaction between him and Kimball must therefore be imputed to that corporation. The corporation therefore was not an innocent purchaser. It is said that equity cannot relieve the defendants in error from the result of J. S. Kimball’s negligence in failing to read the deed before he” signed it. It is true that equity in certain cases refuses to relieve men from the consequences of their own carelessness, but there is no hard and fast rule that one who fails to read a deed before signing it may not seek its reformation in equity in a case where there has been a mutual mistake. In the present case there was evidence tending to show that before signing the deed J. S. Kimball asked Mr. Geary, the attorney for the J. S. Kimball Company, if the deed was all right and according to the memorandum which he had furnished, and was answered in the affirmative. The question whether the failure to read a conveyance before its execution is fatal to the right to obtain its reformation must in each case depend upon the attending circumstances. In view of the evidence in this case and the general principles announced by the authorities, we cannot say that the court erred in holding the negligence excusable. West et al. v. — 405 — Suda, 69 Conn. 60, 36 A. 1015; Barry v. Rownd (Iowa) 93 N.W. 67; Boulden v. Wood (Md.) 53 A. 911; Conn v. Hagan (Tex.Sup.) 55 S.W. 323. We find no error for which the judgment should be reversed. It is accordingly affirmed.