BRYAN, Circuit Judge (after stating the facts as above).
The District Judge's statement in his oral opinion, that he had "not given any weight to any of the testimony," standing alone, doubtless would sustain the contention of appellants that the case was not decided on its merits. But that statement, as clearly appears from what preceded it, had reference only to the testimony of witnesses relating to admissions against interest which they claimed had been made by Burton, and perhaps also by Roos. It had no reference to any other testimony or evidence in the case. The District Judge stated that he had permitted the letters exchanged by Burton and Roos to be read so that he might be fully informed. It is true he also indicated that it was physically impossible for Roos to have received the $500 as consideration and further evidence would be unavailing to prove a contract; however, as appears from other parts of his opinion, he based his decision, not on any error in the date of the contract, but on the conclusion that appellants had failed to prove the existence of the contract on the date claimed, or on any other date, because, as he construed the evidence, they had failed to show the particulars and circumstances of the date and of the facts. It was evidently the opinion of the trial court that the certificate of deposit was not cashed until after Roos went to Mexico; and, as it appears to us, the indorsements on the certificate of deposit, the proceeds of which Burton testified he paid to Roos, demonstrates that this opinion was correct. That certificate was not due until May 3, the day after it is conceded that Roos left San Antonio.
Burton testified that he cashed it at a bank, but he did not say what bank. If it had been cashed at the State Bank Trust Company, that issued it, it would not have gone through the clearing house. If it had been cashed at some other bank, on or prior to May 2, it is against all reason to suppose that it would not have been presented to the issuing bank, located in the same city, until May 14. The indorsements indicate that the certificate was either deposited with or cashed by the National Bank of Commerce on May 14, and was paid by the issuing bank on the same day. No other bank than the issuing bank would have perforated the certificate.
The evidence therefore seems to be conclusive that Burton did not pay Roos with the proceeds of his wife's certificate of deposit. If there were no other consideration than the $500, and that is all there was according to the alleged contract, we would agree at once with the trial court that no consideration had been proved, and that consequently no valid contract could have existed. But as, according to Burton, the proceeds of the certificate of deposit, represented only a part of the consideration, the other part being represented by his agreement to advance and the actual advance of money on the judgments against Roos and Danforth, we must look further into the evidence. The District Judge saw the witnesses and heard their testimony. It is his province to pass upon their credibility. His decision on the facts ought not to be reversed unless it can be shown clearly and conclusively to be erroneous. That decision settled against Burton and in favor of Roos the irreconcilable conflicts in their testimony as to the existence of the contract, and as to what occurred at their various interviews.
It necessarily follows that the trial court was not convinced that Bell saw the contract. Burton, to say the least, was not an accurate witness. That is shown by his testimony that he received Roos' check for $1,000 at the time the alleged contract was signed, whereas his own receipt is conclusive evidence of the fact that he did not receive it until some weeks later, when it was delivered to him by Mauermann; and by his contradictory statements relating to the time when he first was informed by Roos that a lease had been obtained from Obando. As between the two principals, and aside from any attending circumstances, we are far from being able to say that Burton's accounts of the interviews that took place, concerning the judgments against Roos and Danforth, the purpose of the correspondence, and what was said about the ownership of the lease in Burton's office after the second well came in, were more credible than the accounts of those interviews given by Roos. But it is said that other evidence in the case corroborates Burton and contradicts Roos to such a degree as conclusively to prove the existence of the contract.
Burton must rely on the contract which he asserts. As stated by the District Judge, he does not claim that there was any other. His testimony supports the theory, not of a resulting trust, but of a direct trust based upon contract. He must prove consideration so as to show a valid contractual relation. According to the documentary evidence, Obando did not acquire the lease in question from the owners of the land until nearly a year had elapsed after Roos made his trip to Mexico in 1913, and Roos did not acquire an option on that lease from Obando until nearly two years after it is claimed he and Burton entered upon their joint adventure of obtaining oil leases in Mexico. If the contract relied on had been entered into in 1913, it would not cover a lease acquired two years later, unless that lease had been obtained in pursuance of negotiations begun in 1913; for the alleged contract had reference to a particular trip, and does not bear the construction that it would be binding for an indefinite period. On the other hand, the lease, if it was acquired as a result of negotiations entered into or even begun on the trip to Mexico, would be taken subject to the alleged contract, regardless of the time that elapsed before it was finally obtained. There was no direct testimony that the Obando lease was acquired in pursuance of negotiations begun on the trip to Mexico in 1913, and Roos testified that it was not. Some comment is made on Roos' failure to call Aldape, Obando, and Merriwether to support his negative testimony. His case would have been stronger if he could have supported his testimony in this way. Appellants could equally well have taken the testimony of Aldape and Obando to sustain the burden of proof which was upon them, but doubtless they had no information that Merriwether knew anything about the case. On the other hand, Conn, the trustee in bankruptcy, and a party to this suit, failed to testify that he knew of Burton's claim before the discharge in bankruptcy was granted. There might have been good reasons, though the record fails to disclose them, why the testimony of these parties who could have thrown light on the controversy was not taken. At any rate, we take the case as we find it.
Before Roos left San Antonio for Mexico on May 2, 1913, he was in financial straits. He does not deny the testimony of the bank tellers, and therefore it is to be conceded, that he could not have withdrawn the funds he had on deposit at the West Texas Bank Trust Company without the approval of McCaleb, the president, or of the vice president of that bank, because of judgments that had been or were then in process of being obtained against the partnership of Roos Danforth. His bank deposits were made available by an arrangement whereby Burton satisfied the judgment creditors with the payment of $1,000 contributed by Roos.
Burton was also a partner of Danforth, and conceivably might be concerned about the liens of judgments on land in which he had a half interest. Besides, Burton never disclosed whether on an accounting he would be indebted to Danforth or Danforth would be indebted to him. Whether Burton agreed to take up and carry the judgments temporarily, and eventually to hold Roos liable for half of the amount advanced as he testified, or instead agreed to release Roos immediately from liability thereon, as Roos testified, was a question in dispute. Burton's testimony is not corroborated merely by the circumstance that he actually took up and carried the judgments until 1916, and then released Roos, but is equally consistent with the theory that he violated his agreement. The release was not finally given, as Burton testified, because Roos represented that he had spent more money in obtaining oil leases than Burton had, but was given in pursuance of a demand by Roos, and upon his surrender of a note for $2,750 which purported to bind the firm of Burton Danforth.
It would seem, on account of his financial condition and standing, that Roos could have been of but little, if any, assistance in negotiating a loan for the republic of Mexico. However, he had befriended Aldape by becoming surety on his bond, and, after Aldape entered the Mexican cabinet, it is quite likely that he was not unwilling to assist Roos either to negotiate a loan for Mexico or to obtain oil leases. Doubtless Roos did see Aldape in Mexico City, and it may be that he entered into negotiations with Oleson at Aldape's suggestion. Those negotiations show that Roos, whatever other mission he had in Mexico, was willing to acquire oil leases, but they do not show that he acquired any at that time. The circumstance is too remote to support an inference that at that time Roos acquired or negotiated for the Obando lease, for he was not able, in 1913, or at any time prior to December of 1918, to pay any substantial amount on an oil lease.
The very fact that Brooks advanced the money necessary to pay for the assignment of the Obando lease in May of 1915 is circumstantial evidence of the strongest kind that Roos had only a short time before that obtained his option on that lease. Burton and Roos agreed that the first serious discussion that they had about the lease was in November or December of 1917. The occasion of that discussion was the indebtedness secured by the lease. A controversy had previously arisen between Brooks and Roos over the question whether the original loan of $10,000 should have been included in the mortgage for approximately $17,000. Brooks took the position that the entire indebtedness which was secured by the mortgage was due on July 2, 1918; Roos contended that $10,000 of that amount should not be called for until the lease had been developed, but his attorneys disagreed with him and adopted the contention of Brooks. As a consequence, the relations between Roos and his attorneys reached a point where they were not cordial. Roos therefore desired to get the advice of another attorney and to prevent, if possible, the foreclosure of the mortgage for the entire amount, as events seemed to indicate that the mortgage would probably become due before the lease could be developed.
Burton interviewed Vinson, Wolters, and a representative of the Texas Company, for the purpose, as he says, of protecting his interest in the Obando lease, and for the purpose, as Roos says, of taking up the loan held by the Texas Company. It is argued that, if Burton had been actuated by the latter purpose, he would not have represented to the Texas Company, his desire to continue the loan with that company, but would have undertaken to replace the loan with some one else, so as to earn a commission and such part of the amount equal to the loan, which Roos testified he was willing to pay, as could be obtained from the third party taking up the loan. But it is to be remembered that Roos, according to his testimony, reserved the right to have the Texas Company continue to carry $10,000 and have that amount deducted from the amount Burton was to obtain, and that papers relating to the controversy with Brooks were desired, and Vinson was employed as attorney, in order to determine whether the Texas Company could be compelled to postpone its demand for $10,000 of the amount secured by the mortgage until after the drilling of wells had been completed. In the event Roos and his attorney were able to secure a reduction of the Texas Company's demand, the amount necessary to be borrowed to prevent foreclosure of the mortgage would be $7,000, which it would still be necessary to borrow from some third party. Burton might well have been willing to accept as his compensation 5 per cent. of the smaller loan and such part of the additional amount equal to the loan as he could get. Burton's letter, in which he stated that he had represented to Scott of the Texas Company that he would "refinance" the loan and pay it off if that company would not extend it, can be more conveniently dealt with as a part of the correspondence between him and Roos.
As to that correspondence. Burton did not assume to employ Vinson, but acted the part of an agent to arrange for an interview between attorney and client. The first letter Roos wrote in reply contains the expressions "our matter" and "others interested," but it was written for the purpose of being shown to Vinson, as is explained in a second letter. Evidently Roos did not know what Burton had said to Vinson about the ownership of the lease, and therefore did not want to appear to Vinson to contradict any representation Burton might have made. The second letter is not to be construed as a recognition of interest, but rather to explain the purpose of impliedly recognizing an interest that did not in fact exist. If the first letter correctly stated the facts, there was no need of an explanation. Burton's letter reporting interviews with Scott and Wolters, in each of which he claims he represented that he had an interest, and in addition that he had told Scott he would pay off the mortgage loan if necessary to protect that interest, were written within a week of each other. Of course Burton's declarations are not evidence in his favor. It is not reasonable to suppose that either Scott or Wolters would have been discussing their business or professional matters with a stranger. Therefore, in order to get an interview, Burton would have to make it appear that he was interested in the affairs of Roos. He made the same representation first to Scott, then a few days later to Wolters, and secured interviews, but did not directly claim to Roos that he was interested; he only explained how he was able to obtain the information that was desired. If, however, these letters can be construed as making a claim of interest, the letters of Roos in reply do not by silence recognize the claim, but, on the contrary, one of them refers to Burton as having no personal interest, and the other speaks of his own sole, individual interest in the contracts with Brooks and in the lease. The letter that Roos wrote, containing the expression "our well is in," is the one upon which most stress is laid, and naturally so. The expression there used is open to the construction that it recognized Burton as a partner. At the same time it is an accurate expression, and could well have been meant to refer to the interests of the Texas Company and of Lane, Wolters Story, as well as to the interest of Roos. Then came Burton's first direct assertion of interest shown by the correspondence. It was immediately repudiated.
Burton's conduct throughout was not such as would reasonably be expected of one who was a half owner of valuable property. He displayed the utmost indifference to the provisions of the original contract with Brooks, and to the development of the lease for more than four years after he understood there was a lease and before he found out that it was put up as security for approximately $17,000 that had been advanced to Roos. He does not claim that he raised any objection to the hypothecation of his half interest when informed about it, or demanded an accounting. He says that for awhile even after this he did not disclose his interest to the Texas Company, because Roos would lose control, notwithstanding the fact that admittedly Roos had less than a half interest in the lease. The clause in the contract providing against the transfer of any interest is brought forward as a reason why his interest should be kept concealed. Although it does not appear that he knew of that clause, it does appear that he freely discussed his claim of interest with the Texas Company. He says he demanded written evidence of his rights after Roos had denied by letter that he had any, but was content to accept a mere oral promise that his rights would be recognized, even after he had himself informed the Texas Company of his interest, according to his testimony, and there could have been no possible reason for longer postponing a formal written acknowledgment by Roos of such interest. Within a few days after he says that promise was made, he admits that he accepted only $300 out of an additional loan of $10,000 from his partner, who already had received $17,000 and had failed to account to him for his share. In 1917 he was adjudged a bankrupt, but did not list among his possible assets his claim of interest in the lease, although at that time the lease was thought to be very valuable, and a well was being drilled upon it. And, after the well came in, with its promise of great wealth to its owners, he obtained his discharge in bankruptcy without disclosing his claim of interest in it.
We are unable to say that the established facts and circumstances corroborate the testimony of Burton and contradict that of Roos sufficiently to support the conclusion that the decree appealed from is erroneous. Nor in our opinion is the case of appellants materially strengthened by the testimony relating to admissions against interest claimed to have been made by Roos. In a case of this kind, where it is sought to prove title, such testimony is required to be full, clear, and satisfactory. Allen v. Withrow, 110 U.S. 119, 3 S. Ct. 517, 28 L. Ed. 90; Pomeroy's Equity Jurisprudence (4th Ed.) § 1040; Birmingham v. L. N.R. Co. (C.C.A.) 297 F. 816. The rights of an innocent third party are not involved, and no question of estoppel arises. Oral statements are so liable to be misunderstood or misinterpreted that they ought to be received with great caution. Greenleaf on Evidence, § 200. The testimony of Beebe, Dunning, and Hoffman is not convincing. They all make the same mistake in the name of the well. As circumstances indicating that the admission testified to by them never was made, it was proved that one of these witnesses was afterwards introduced to Roos by letter, and another failed to identify him at the trial. The witness Unger admitted that he kept a statement prepared by Burton which he read over just before the trial, and upon which he apparently relied in giving his testimony; so that, if the statement was incorrect, his testimony given several years afterwards was liable to be so. The other witnesses were closely associated, either by relationship or by business with Burton, and, even though they were honestly attempting to repeat statements made by Roos in their presence, the length of time that had elapsed would naturally cause their independent recollections to be indistinct, and make it probable that they had confused the original statements with conversations about the case that had taken place with others in the meantime.
It is assigned as error that the court erred in refusing to take the depositions of Mrs. Harper and McCaleb. It is not shown that Mrs. Harper would testify to any matter of substance that was in dispute. In her affidavit in support of the application, she stated that Burton paid her $500 for her help in securing oil leases. Even Burton does not claim that. McCaleb stated in his affidavit that a portion of Roos' bank deposit was not subject to check; but the bank tellers testified to that, and Roos did not deny it. What McCaleb was interested in was the judgments against Roos and Danforth, and naturally that is what he would have discussed, especially in a telephone conversation. Any testimony by him as to an additional admission against interest by Roos would have been merely cumulative. It therefore was not error to refuse to reopen the case in order that the testimony of these two witnesses might be taken.
The decree is affirmed.