54 F.2d 908 | 5th Cir. | 1932
Bell Oil & Gas Company brought a bill of interpleader to determine which of several claimants was entitled to receive oil royalties from certain lands in Gray county, Tex. W. J. Ball, one of the claimants, owned a royalty interest and had signed a written contract to sell it to M. S. Ingleright, another claimant, delivering to a banker a deed thereto to be held in escrow until the title should be approved and the purchase money paid. Ingleright, having paid the banker the price and demanded the deed, prayed in his answer that the contract be specifically performed; and Ball in his answer, contending that he had signed the contract and deed through mistake as to their contents induced by fraud of Ingleright’s agent, J. H. McCracken, prayed for their cancellation. Decree was given in Ball’s favor and Ingleright appeals, being joined by Daneiger Oil & Refining Company, which is interested with Ingleright.
The District Court over objection admitted parol evidence of the negotiations pri- or to the making of the writings. Notwithstanding the rule that parol negotiations are merged in a resulting written contract, and notwithstanding the Statute of Frauds (Rev. St. TeX. 1925, art. 3995) which requires contracts respecting land to be evidenced by writing, it is well settled that equity has jurisdiction in a proper ease to cancel a written contract respecting land for mistake or fraud which caused its execution, and will hear parol evidence to prove the fraud or mistake; and upon the same grounds parol evidence is admitted to defeat a prayer for specific performance. Pomeroy, Eq. Jur. (4th Ed.) §§ 859, 860; Story, Eq. Jur. (14th Ed.) §§ 228, 229. In order to show that a mistake did occur and wherein it consisted, the antecedent agreement which the writing was intended to express must necessarily be proven. No error was committed in receiving the evidence.
But we are of opinion that the evidence does not justify setting aside the writings and refusing specific performance. The burden is not, as held by the District Judge, upon Ingleright, because the execution of the written contract and escrow deed is admitted, and they being fair on their face, specific performance will be decreed of course unless Ball sustains his contention of mistake and fraud. As to thése, a heavy burden rests) upon him. While equity will disregard the parol evidence rule to the extent of hearing the entire transaction to see if a fraud has been perpetrated or a relievable mistake has been made, the fraud or mistake must be clearly and convincingly shown. In Howland v. Blake, 97 U. S. 624, 626, 24 L. Ed. 1027, it is said: “The burden rests upon the moving party of overcoming the strong presumption arising from the terms of a written instrument. If the proofs are doubtful and unsatisfactory, if there is a failure to overcome this presumption by testimony entirely plain and convincing beyond reasonable controversy, the writing will be held to express correctly the intention of the parties. * * * A deliberate deed or writing, are of too much solemnity to be brushed away by loose and inconclusive testimony.” In the Maxwell Land Grant Case, 121 U. S. 325, 7 S. Ct. 1015, 30 L. Ed. 949, reiterated in United States v. Budd, 144 U. S. 154, 12 S. Ct. 575, 36 L. Ed. 384, the language is: “When, in a court of equity, it is proposed to set aside, to annul, or correct a written instrument for fraud or mistake in the execution of the instrument itself, the testimony on which this is done must be clear, unequivocal, and convincing, and it cannot be done upon a bare preponderance of evidence
The judgment is therefore reversed, with direction to enter a decree in favor of appellants for specific performance by delivery of the deed from Ball to Ingleright.