Wagg v. Herbert/Opinion of the Court

by David Josiah Brewer

United States Supreme Court

215 U.S. 546

Wagg  v.  Herbert

 Argued: and Submitted November 11, 1909. --- Decided: January 24, 1910

The petition charged that the defendant Wagg was guilty of fraudulent, wrongful, oppressive, and unjust conduct, and that through such conduct he obtained the deed of May 28, 1901. The trial court, as stated, found generally in plaintiff's favor. The supreme court, in an elaborate opinion, in which it narrated fully the details of the transactions between these parties and the testimony given on the hearing, closed its recital in these words:

'It must therefore follow as an irresistible conclusion that the allegations in the petition of fraud, oppression, undue influence, and inadequate consideration were fully sustained by the evidence, and we are unable to perceive how the trial court could have reached any other fair, just, and rational conclusion upon the entire evidence as disclosed by this record.'

The testimony as to the value of the property at the time of the settlement in May, 1901, was conflicting, some placing it at $100 per acre. In reference to this conflict the court said:

'It is a settled rule of this court, and one which we have reiterated and reiterated time and again, that where the evidence reasonably sustains the finding and judgment of the court, or where the evidence is conflicting, it will not be disturbed by this court.'

Evidently the supreme court believed that the defendant has acquired in settlement of a debt a tract of land of far greater value than the amount of the debt, and that this was accomplished by fraud, oppression, and undue influence. Upon these facts a decree setting aside the conveyance was undoubtedly right.

Counsel for defendant, on his appeal to this court, has filed a brief of over 150 pages, in which he narrates the facts as they appear to him, and cites many authorities as to the circumstances which will uphold a conveyance upon such or similar facts. Of course, upon the face of the papers, the deed of May, 1901 vested in the defendant the title to the 55 acres, but it is well established that, in a suit in equity between parties, in which fraud, oppression, and undue influence are charged, the court is not concluded by that which appears on the face of the papers, but may institute an inquiry into the real facts of the transactions. So thoroughly is this doctrine established that any discussion of the cases in this and other courts affirming it would be useless. They rest upon elementary principles of equity. It is sufficient to refer to Russell v. Southard, 12 How. 139, 13 L. ed. 927, and the many authorities cited in the opinion.

Counsel further contends that the decree is erroneous, in that it adjudges that the deed of May, 1901, to defendant was a mortgage, and as such only a lien upon the property; that there is no evidence that this deed was not intended as a conveyance, or that it was intended as a mortgage, and that courts do not make contracts for parties. But this contention presents a mere technical matter. The petition alleges, in addition to the averment that the deed was obtained wrongfully and fraudulently, 'that the only consideration received by said plaintiff for the said purported deed, marked 'Exhibit E' (the deed to defendant of May, 1901, of the entire tract), was a relinquishment of the said mortgage herein referred to as 'Exhibit B' (the original mortgage given by Mr. and Mrs. Herbert to defendant).' In other words, whatever technical criticism may be made upon the form of the decree, it was in substance a finding and decree that the deed of May, 1901, was void, as having been obtained by the fraudulent conduct of the defendant, and that being set aside left the property subject to the lien of the original mortgage given October 24, 1898. Of course, the act of Wagg in taking from the bank the deed placed in escrow, and having it recorded, may, in view of his assurances to Mrs. Herbert, be regarded as immaterial. Equitably, the relation of mortgagor and mortgagee was not disturbed. The court did not make a new contract for the parties, but, leaving the mortgage valid and binding, decreed the invalidity of a subsequent conveyance, and also ordered an accounting by the defendant as a mortgagee in possession.

There is in this case no lapse of time, no matter of estoppel, which, so far as the defendant Wagg is concerned, forbids a court of equity from investigating and determining the real facts. Mrs. Herbert's deed to defendant was executed May 28, 1901, and this suit was commenced June 13, 1903, less than two years and a month from the date of the wrong complained of. While laches is often spoken of as the equitable equivalent of the legal statute of limitations, yet there is no fixed time which makes it an absolute bar. In Russell v. Southard, supra, there was between the fraudulent transaction and the commencement of the suit a lapse of nineteen years and eight months, and it was held that that was not sufficient, the court saying (p. 155):

'The absence of all valuable consideration for the surrender of the equity, and the circumstances of distress under which it was made, and which, so far as it appears, continued to exist down to the filing of the bill, coupled with the conviction, which we think Russell mistakingly entertained, that his rights were probably destroyed, must prevent us from allowing the lapse of time to be a positive bar.'

The rights of purchasers from Wagg subsequent to May 28, 1901, are protected by the accounting ordered, and as they did not appeal from the decree, it must be assumed that they were satisfied with it.

The decree of the Supreme Court of the Territory of Oklahoma is affirmed.

Notes