Opposition Brief — Union Camp Corp. v. Dyal

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Supreme Courses

of the

Gnited States

OCTOBER TERM, 1971

NO. 71-1600

UNION CAMP CORPORATION,

Petitioner,

v8.

JAMES E. DYAL, JR., et al. JOHN M. MURRELL,

et al., and LEON A. WILSON, II, et al.,

Respondenis.

On Petition for Writ of Certiorari to the United States

Court of Appeals for the Fifth Circuit

BRIEF IN OPPOSITION

DON G. NICHOLSON

THOMAS G. SPICER

221 Security Trust Building

Miami, Florida 33131

Telephone: (305) 358-2783

Attorneys for Respondents

EDWIN G. BARHAM

Valdosta, Georgia and

NICHOLSON, HOWARD,

BRAWNER & LOVETT

Miami, Florida 33131

Of Counsel

MIAMI REVIEW — 371-4853 — 377-3721

INDEX

STATEMENT OF THE CASE ___...

REASONS FOR DENYING THE WRIT

I.

II.

III.

Under Georgia law an agent without

written authority of his principal may

not contract for the conveyance of lands

of the principal, even under the guise of

compromise, and settlement of litigation

wherein the title to the lands are not in

dispute, and the principal neither author-

izes, approves, nor ratifies such action

The law of Georgia does not empower

attorneys with written authority from

their clients “to take such steps as you

deem necessary to protect our interests

in this litigation” to contract, in compro-

mise and settlement of litigation or other-

wise, for the conveyance of lands of the

client, where the title to the lands are

not in dispute, and the client does not

authorize, approve or ratify the action

The rule that courts should favor com-

promise does not require enforcement of

unauthorized and unwanted commitments

by others to sell real property owned by

the clients .

Page

be

12

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II

INDEX (cont.)

Page

IV. The “clearly erroneous” rule does not re-

quire a reviewing court to accept the con-

clusions reached by the trial court from

Oe I I i ice mene eardoninen 13

CONCLUSION ........ anchheehdaamieensasatanesite 15

CERTIFICATE OF SERVICE .............--.--------------- 16

III

TABLE OF AUTHORITIES CITED

Case Page

Boswell v. Gillen,

131 Ga. 310, 62 S.E. 187 (1908) 8

Cord v. Smith,

338 F.2d 516 (9th Cir. 1964) 10

Davis v. First National Bank of Blakely,

139 Ga. 702, 78 S.E. 190 (1913) 11,12

Erie Railroad Co. v. Tompkins,

304 U.S. 64, 58 S.Ct. 817, 82 L.Ed, 1188 (1938) 9

Fulford v. Fulford,

225 Ga. 9, 165 S.E.2d 848 (1969) 4,6, 7,8

Sperry v. Florida,

373 U.S. 379, 83 S.Ct. 1322,

10 L.Ed.2d 428 (1963) 10

Wade v. Powell,

31 Ga. 1 (1860) 10

RULES

Fed.R.Civ.P.:

eens es ea 13

in the

Supreme Court

of the

Gnited States

OCTOBER TERM, 1971

NO. 71-1600

UNION CAMP CORPORATION,

Petitioner,

vs.

JAMES E. DYAL, JR., et al. JOHN M. MURRELL,

et al., and LEON A. WILSON, II, et al.,

Respondents.

On Petition for Writ of Certiorari to the United States

Court of Appeals for the Fifth Circuit

BRIEF IN OPPOSITION

STATEMENT OF THE CASE

The history of the relationship among the parties,

and the facts involved are extensively recited in the deci-

sion of the Court of Appeals for the Fifth Cireuit (A. 1-

21), and in the decision of the District Court (A. 23-57).

2

This is a diversity of citizenship action for a declara-

tory judgment and for the payment of inverse damages to

redeem ‘against a forfeiture of two 99 year timber land

leases, containing options to purchase the lands exercisable

in the future. The action was filed in the Southern District

of Georgia by Union Camp Corporation, as lessee, against

twelve defendants, as lessors. Union Camp caused a tem-

porary restraining order to issue restraining the defend-

ants from interfering with its possession of the lands;

restraining the defendant, J. Edgar Dyal, from prosecuting

an action then pending in the Southern District of Florida

for breach of the leases, damages, and forfeiture; and

restraining the defendants, parties to an action then pend-

ing in Appling County, Georgia, from prosecuting the

action challenging the validity of the options to purchase

the lands. The latter action was in the process of voluntary

dismissal when the Union Camp suit was filed.

With the action in the posture noted, the Executive

Vice President and the attorney for Union Camp met in

Miami, Florida, with counsel for the defendant, Willie

Eason Dyal, counsel for six other defendants, who held

written authority to “take such steps as you deem neces-

sary to protect our interests in this litigation”, and with

the defendant, J. Edgar Dyal, whose authority to represent

the other defendants was oral. J. Edgar Dyal announced

at the meeting that he was not authorized to discuss other

lands under lease from the defendants to Union Camp

‘known as the Fargo Tract!, which are not involved in

this litigation, but that he was authorized to “speak” for

the whole title of the lands involved, which are known as

the Dyal +1, or Surrency Tract.

3

After extensive negotiations, the parties present and

counsel agreed to a settlement amount for the damage claim

of J. Edgar Dyal, and agreed that all defendants would

convey their fee interests in the Surrency Tract to Union

Camp for the price fixed in the option to purchase, plus an

additional sum as premium for acceleration of purchase

option. The agreement was reduced to writing and signed

by counsel. The defendant, Willie Eason Dyal, also agreed

to convey her fee interests in the Fargo Tract to Union

Camp for an agreed sum, plus an additional sum for her

attorneys’ fee; and has since fully performed her agree-

ments by conveying her interests in the Surrency and

Fargo Tracts to Union Camp.

After the meeting, J. Edgar Dyal, became dissatisfied

with the stipulation and notified his counsel he did not

intend to carry it out. He and his counsel immediately

thereafter notified Union Camp and its counsel of his

intention. All other defendants have repudiated the stip-

ulation of counsel and object to its enforcement.

Upon failure of the eleven defendants to perform in

accordance with the stipulation, Union Camp moved to

enforce the stipulation. After an extensive evidentiary

inquiry, the District Court ordered that the stipulation be

enforced against the eleven defendants (App. A. 23-57).

On appeal by the eleven defendants, the Court of Appeals

for the Fifth Cireuit (App. A. 1-21) affirmed the order

requiring enforcement of the stipulation against the de-

fendant, J. Edgar Dyal, and reversed the order as being

unenforceable against the remaining ten defendants.

Union Camp petitions for a writ of certiorari to review

the decision of the Court of Appeals. The defendants, except

Willie Eason Dyal, respond here in opposition.

4

REASONS FOR DENYING THE WRIT

I. Under Georgia law an agent without written

authority of his principal may not contract for the con.

veyance of lands of the principal, even under the guise of

compromise and settlement of litigation wherein the title

to the lands are not in dispute, and the principal neither

authorizes, approves, nor ratifies such action.

Union Camp asserts the holding (that an agent’s com-

promise settlement of a pending action which provides for

the conveyance of real property must be in writing unless

ratified by the principal) is in conflict with the law of the

State of Georgia. In support of its assertion, Union Camp

contends that the Court of Appeals misinterpreted the

decision of the Supreme Court of Georgia in the case of

Fulford v. Fulford, 225 Ga. 9, 165 S.E.2d 848 (1969) on

this point.

Union Camp’s assertion is miscast, and its contention

is in error.

The Court of Appeals characterized the stipulation, as

follows:

“The stipulation did not purport merely to

settle the law suit. It neither confirmed the va-

lidity of the leases and the option, nor declared

their invalidity. It was silent as to all other

issues raised in this litigation except Dyal’s re-

quest to share in the stumpage based on a com-

promise as to value. In no other way did it

compose the issues by determining some of them

in favor of one party and others in the favor of

another. It did not provide for a cash payment to

5

dispose of some of the contentions made. Instead,

as it recites, it settled all issues between the par-

ties, not merely those in litigation.

“When the conference was arranged, counsel

for Union Camp promised that one of its officers

who could speak authoritatively for the company

would attend, but it agreed to participate only on

condition that the persons representing the Dyal

interests ‘were prepared to speak for the whole

title and deliver titles to the whole property of

Surrency No. 1.’ That was the purpose and the

result of the conference.”

(App. A. 11)

The Court held that the stipulation provided for the

transfer of title to real property situated in Georgia, and

thus the District Court was obliged to follow the Georgia

law in determining the validity and effect of the stipula-

tion, as well as the power of agents to execute it.

The basic rule of law in Georgia was correctly noted,

as follows:

“A Georgia statute gives attorneys ‘authority

to bind their clients in any action or proceedings,

by any agreement in relation to the cause, made

in writing, . . .” Ga. Code 9-605. But the stipula-

tion in this case was not an agreement ‘in relation

to the cause.’ Nor was it a settlement that dis-

posed of the issues in the proceeding. Cf. Ingalls

rv. Ingalls, N.D. Ala. 1959, 177 F.Supp. 151, Cir.

1960, 280 F.2d 423: Cia Anon Venezolana De

Naregacion v. Harris, 5 Cir. 1967, 374 F.2d 33.

It was a contract to sell lands.

6

“A contract for the ‘sale of lands, or any inter-

est in, or concerning them,’ Ga. Code 20-401

<(4)4, ‘must be in writing, signed by the party

to be charged therewith, or some person by him

lawfully authorized. .. .’ Jd. at 201-401. To im-

plement this statute of frauds, Ga. Code 4-105

provides, ‘the Act creating the agency shall be

executed with the same formality ... as the law

prescribes for the execution of the act for which

the agency shall be created.’ This evidently re-

quires that the agent’s power to sell land must

be in writing absent later ratification of his acts,

Baxley Hardware Co. v. Morris, 1927, 165 Ga.

309, 140 S.E. 869, or estoppel of his principal to

deny his authority. See Wade v. Powell, 1860, 31

Ga. 1: Fulford v. Fulford, 1969, 225 Ga. 9, 165

S.E.2d 848... .”

(App. A. 12, 13)

The Court reviewed the cases in Georgia following the

rule that written authority to the agent must be shown

to support his sale or lease of the principal's lands and

that one dealing with such agent is charged with knowl-

edge of the rule and is under a duty to inquire and ascer-

tain whether such written authority exists. It then

proceeded to consider whether the exception to the rule

followed in Fulford v. Fulford, supra at page 4, applies

in the instant case.

Fulford involved an action among members of the

same family, which under Count 1 sought to set aside a

conveyance of lands by one of the members to another.

Count 2 was described as follows:

7

“It was alleged in this court that on March 29,

1967, while the instant case was pending, all of

the parties with their counsel met in the court-

room of the Wheeler County courthouse and made

an agreement which was an accord and satisfac-

tion (compromise settlement) of the action re-

ferred to in Count 1...”

(165 S.E.2d 848, 852)

Count 2 sought to enforce the oral agreement providing,

among other things, for the reconveyance of the lands in

issue. On this point the Court held:

“* | The compromise of a contention as to

the property rights, the final outcome of which,

if settled by litigation, the parties consider to be

doubtful, furnishes a consideration sufficient to

support the compromise contract. It is well set-

tled that in equity the termination of family

controversies affords a consideration which is

sufficient to support a contract made for such

purpose.’ Belt v. Lazenby, 126 Ga. 767, 56 S.E.

_, rs

(165 S.E.2d 848, 853)

and

‘Where an agreement for the compromise of

a pending cause is made by a party and his coun-

sel on the one hand, and by counsel of the opposite

party and ratified by his client, whereby one of

the parties is to do certain acts, such agreements

upon performance or offer to perform according

to its terms within a reasonable time, becomes

Ae aS we

8

binding on the parties, and puts an end to the

original subject-matter of the controversy * * *

Such an agreement need not be in writing... .’”

(165 S.E.2d 848, 854)

citing, inter alia, Boswell v. Gillen, 131 Ga. 310, 62 S.E,

187 (1908).

The Court of Appeals, in its decision now under attack,

distinguished Fulford from the instant case thus:

“... The Court's opinion quoted with approval

an earlier observation that the requirement of a

written power of attorney be in writing has ‘no

application to an oral agr2ement and compromise

of a pending suit... in Fulford, however, title

to the property was —¢ issue in the litigation, and

all the parties exp’: =<!) racified their attorney’s

settlement. That, coo, was the basis for enforcing

the stipulation 'y counsel in a land dispute, Dean

v. Jackson, 1964, 219 Ga. 552, 134 S.E.2d 601,

where the court found that the client gave express

assent to the action taken by his attorney.”

(App. A. 15)

The Court of Appeals noted that in the instant case

the stipulation was not an agreement “in relation to the

cause”. “Nor was it a settlement that disposed of the

issues in the proceedings. . . . It was a contract to sell

lands.” (App. A. 12). “There is no evidence that the Dyal

family (the ten defendants! desired him (J. Edgar Dyal)

to sell their interests in the land.” (App. A. 16). “Here

there can be no question of ratification or delay on the part

of any of the Dyals after the stipulation was signed.” (App.

9

A. 18). “The sale of Surrency was not incidental or reason-

ably necessary to settling the litigation. Indeed the reverse

is true: the litigation was incidental to ownership of the

fee...” (App. A. 16).

The Court of Appeals correctly interpreted the deci-

sion in Fulford, and followed it by ordering the stipulation

enforced against J. Edgar Dyal, who “expressly authorized

his lawyers to execute the stipulation”; and “ratified it by

acquiescing in it after it was signed.” (App. A. 19). The

Court of Appeals correctly interpreted the decision in hold-

ing the exception does not apply to the other defendants,

and followed the basic rule, in ordering:

“As to all the defendants, other than J. Edgar

Dyal and Mrs. Willie Eason Dyal, the suit may

continue. Determination of their rights will abide

the outcome of the litigation.”

(App. A. 21)

The decision of the Court of Appeals fully accords

with the law of Georgia.

Il. The law of Georgia does not empower attorneys

with written authority from their clients “to take such

steps as you deem necessary to protect ovr interests in

this litigation” to contract, in compromise and settlement

of litigation or otherwise, for the conveyance of lands of

the client, where the title to the lands are not in dispute,

and the client does not authorize, approve or ratify the

action.

In passing we question whether the rule in Erie Rail-

road Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed.

1188 (1938) compels that, in diversity of citizenship cases

10

in Georgia, attorneys admitted to practice in the United

States courts, who are also admitted to practice in the

state courts of Georgia, come into federal courts cloaked

with the plenary powers of attorneys of record in the courts

of Georgia. See: Sperry v. Florida, 373 U.S. 379, 83 S.Ct.

1322, 10 L.Ed.2d 428 (1963) and Cord v. Smith, 338 F.2d

516 (9th Cir. 1964).

Even the plenary powers of attorneys of record in

Georgia do not rise to the heights suggested by the peti-

tioner. Union Camp asserts that Georgia law vests plenary

power in attorneys of record to permit them to agree to

convey lands of their clients, without the consent of their

client, unless the opposing counsel is advised of an express

limitation in the contract of employment restricting the

attorney from so agreeing. The assertion is overbroad.

The plenary power of attorneys of record in Georgia

under a general retainer contract is limited. These powers

are limited to the scope of the action in which they are

retained to represent their client. In Wade v. Powell, 31

Ga. 1 (1860), at page 22, it was said: “(a)n attorney may

confess a judgment against his client, and this involves

every thing.” As the Court of Appeals noted: “(a) Georgia

statute gives attorneys ‘authority to bind their clients in

any action or proceedings, by any agreement in relation to

the cause, made in writing, . . .’ Ga. Code 9-605.” (App.

A. 12).

_ Had the defendants’ attorneys confessed judgment in

this declaratory judgment action by Union Camp, as lessee,

against the defendant, as lessors, the title to the lands

would not be adversely affected, but would be reaffirmed

in the defendants. The Court of Appeals held, as follows:

11

“The stipulation did not purport merely to

settle the law suit. It neither confirmed the valid-

ity of the leases and the option, nor declared their

invalidity. . . . Instead, as it recites, it settled all

issues between the parties, not merely those in

litigation.”

(App. A. 11)

. But the stipulation in this case was not

an agreement ‘in relation to the cause.’ Nor was

it a settlement that disposed of the issues in the

proceedings. (Citations omitted.) It was a con-

tract to sell lands.”

(App. A. 12)

and noted:

“The lawyers representing the Dyals never

purported to act on their own authority as law-

yers, express or implied. bad made it clear in

the presence of Union Camp’s representatives that

they were seeking authorization from J. Edgar

Dyal, and would sign only if he instructed them.

. But Dyal’s authority was more tenuous

than the lawyers’: they at least had a written

letter of employment. His authority was purely

oral.” (App. A. 15)

The case at bar falls squarely within the limitations

noted by the Court in Davis v. First National Bank of

Blakely, 139 Ga. 702, 78 S.E. 190 (1913), related by peti-

tioner in brief at page 15, wherein the Court held that the

statute:

12

‘.. . does not mean that when a client employs

an attorney to bring or defend a suit, it ceases

to be the client’s litigation, that he has no power

to say whether he will litigate or compromise his

suit, and that the attorney becomes the owner or

absolute master of the litigation, so as to be able

to sell or give away his client’s property rights

by contract, in spite of his client.”

(139 Ga. 702, 710, 78 S.E. 190, 194)

III. The rule that courts should favor compromise

does not require enforcement of unauthorized and un-

wanted commitments by others to sell real property owned

by the clients.

Compromises of disputed claims are favored by the

courts where the parties acting in good faith settle a con-

troversy.

Courts favor compromise, but not at the expense of

forcing an unwanted sale of their real property, the title

to which is not in controversy, upon unwilling parties to

litigation who neither participated in the negotiations nor

authorized, approved nor ratified the stipulation.

In the decision sub judice, the Court of Appeals has

ordered the stipulation enforceable against J. Edgar Dyal,

the only party defendant who authorized it; and has or-

dered the stipulation unenforceable against the ten defend-

ants who neither participated in the negotiations, nor

authorized, approved nor ratified the stipulation.

13

IV. The “clearly erroneous” rule does not require a

reviewing court to accept the conclusions reached by the

trial court from the facts as found.

Petitioner contends that the failure of the Court of

Appeals to follow findings of fact held not to be clearly

erroneous is in disregard of Rule 52, Fed.R.Civ.P. and

warrants this Court’s review under its power of super-

vision. Petitioner is in error. The Court of Appeals accepted

the facts but disagreed with the conclusion reached there-

from by the trial court, stating:

“The trial court concluded also that Dyal was

in fact ‘the agent of all the defendants in this

case’ except Mrs. Willie Eason Dyal, and ‘pos-

sessed authority to act for them in all matters

pertaining to the litigation including the settle-

ment thereof.’ But Dyal’s agency was more tenu-

ous than the lawyers’; they at least had a written

letter of employment. His authority was purely

oral.

“While the evidence with respect to Dyal’s

actual authority is contradictory, we are not left

with the firm conviction that the trial court’s

finding was clearly erroneous. (Citations omit-

ted.) But the conclusion reached from this fact

does not follow: because J. Edgar Dyal had au-

thority to settle the law suit does not mean that

he had power to agree to convey a fee interest in

the real property. . . . There is no evidence that

the Dyal family desired him to sell their interests

in the lands... .

14

“The sale of Surrency was not incidental or

reasonably necessary to settling the litigation.

Indeed the reverse is true: the litigation was

incidental to ownership of the fee. Nor does au-

thority to sell a fee in real property usually ac-

company authority to negotiate for settlement of

the type of claim the Dyals were presenting.

Authority to act in the principal’s business does

not usually imply authority to sell the principal’s

interest in lands. Restatement of Agency 2d

$52(b). Dyal’s acts suffer from the same defects

as his counsels’: he acted beyond his authority,

and he agreed to convey lands without written

authority from his principals. Indeed it does not

appear that he had even oral authority to do so.”

(App. A. 15, 16)

15

CONCLUSION

It is therefore respectfully submitted that the petition

for a writ of certiorari should be denied.

Dated at Miami, Florida, this 30th day of June, 1972.

DON G. NICHOLSON

THOMAS G. SPICER

221 Security Trust Building

Miami, Florida 33131

Telephone: (305) 358-2783

Attorneys for Respondents

EDWIN G. BARHAM

Valdosta, Georgia and

NICHOLSON, HOWARD,

BRAWNER & LOVETT

Miami, Florida

Of Counsel

16 ae

CERTIFICATE OF SERVICE

I, THOMAS G. SPICER, one of the attorneys jor

JAMES E. DYAL, JR. and CHARLES SMITH DYAL,

each individually and both as surviving Substitute Co-

‘rustees under a Trust Deed dated December 15, 1941,

JAMES E. DYAL, MRS. IRENE VAUGHAN DYAL,

MRS. ELIZABETH DYAL SAMMONS, MRS. DORO-

THY DYAL BRISCOE, ERNEST EUGENE DYAL,

FORREST LEE DYAL III, MRS. BARBARA DYAL

ROBINSON, MRS. KAY DYAL MILLER, and MRS.

HILIA STRANDEN LAHDE, Respondents herein, and a

member of the Bar of the Supreme Court of the United

States, hereby certify that, on the 30th day of June, 1972,

I served three copies of the foregoing BRIEF IN OPPO-

SITION on each other party separately represented in the

proceeding, by mail in a duly addressed envelope, with air

mail postage prepaid, to counsel of record as follows: To:

George W. Williams, Attorney for Union Camp Corpora-

tion, Bouhan, Williams & Levy, 47 Bull Street, Savannah,

Georgia 31402. To: Anthony A. Alaimo, Attorney for Mrs.

Willie Eason Dyal, individually and as Administratrix of

the Estate of Milton Dyal, deceased, Alaimo & Taylor,

1803 Norwich Street, Brunswick, Georgia 31521. To: Mal-

berry Smith, Jr., Attorney for John M. Murre] and Julian

F. Corish, Corish, Smith & Remler, P.O. Box 8123, Savan-

nah, Georgia 31402. To: Leon A. Wilson II, pro se., Albany

Avenue, Waycross, Georgia. To: C. Edwin Rosier, pro se.,

P.O. Drawer 1327, Waycross, Georgia.

THOMAS G. SPICER

Attorney for Respondents

221 Security Trust Building

Miami, Florida 33131