Harry H. Smedley v. City of Waldron, Thomas Sawyer, Mayor Waldron, Arkansas

774 F.2d 299

• Court: Court of Appeals for the Eighth Circuit
• Decided: October 2, 1985
• Docket: 84-2571
• Status: Published

Opinions

ROSS, Circuit Judge.

This case is before our court for a second time.¹ The City of Waldron is now appealing a finding by the district court that Smedley is entitled to the remedy of forfeiture of the reservoir in question. On appeal, the City is alleging that the district court erred in concluding that forfeiture of the reservoir was required, because the oil and gas lease executed by the City did not violate either the purpose or intent of the 1940 agreement between Hannah Smedley and the City. We affirm the district court.

In Smedley I we remanded to the district court with directions to make findings of fact on (1) “whether the mineral lease is a violation of the parties’ agreement,” (2) “whether the donor intended that the city would lose the land only if the land was not used for a reservoir,” and (3) whether the donor’s intent would be best fulfilled by awarding the revenues from the lease or by invoking the extreme remedy of forfeiture.

Our review is limited to whether the factual findings of the district court are clearly erroneous, FED.R.CIV.P. 52(a). We must be left, after a review of the record, with the definite and firm conviction that a mistake has been committed. Pullman-Standard v. Swint, 456 U.S. 273, 284 n. 14, 102 S.Ct. 1781, 1788 n. 14, 72 L.Ed.2d 66 (1982) (quoting United States v. Gypsum Co., 333 U.S. 364, 68 S.Ct. 525, 92 L.Ed. 746 (1948); Hoefelman v. Conservation Commission of Missouri, 718 F.2d 281, 285 (8th Cir.1983). The burden lies with the City of Waldron to demonstrate error under Rule 52. Reilly v. United States, 513 F.2d 147, 150 n. 2 (8th Cir.1975). We note that the second and third questions which were the subject of our remand were clearly factual questions.

On remand the parties agreed that the parol evidence rule applied to the agreement between Hannah Smedley and the City. The district court, based on the fact that the parties had no additional evidence to offer, relied solely on the governing agreement. The district court found, with regard to the issue of violation of the agreement, that the City violated paragraph 5² when it leased an interest in the land to the Texas Oil and Gas Corporation. Under Arkansas law, “land” includes everything that lies beneath the surface. Lewis v. Delinquent Lands, 182 Ark. 838, 33 S.W.2d 379, 381 (1930). Thus, the district court found that the mineral lease was a clear violation of the agreement.

Secondly, paragraph 5 states that reversion to Hannah Smedley and her heirs would occur if that paragraph was violated. Furthermore, found the district court, paragraph 7 provides that “in the event any of these conditions numbered 1-7 are broken,” the deed is to become “null and void, and the lands shall revert to Hannah Smed-ley and heirs * * *.” Consequently, the district court found this language to create a fee simple subject to a condition subsequent, and once the condition occurred, the City’s title ceased and the lands reverted back to Hannah Smedley and her heirs.

As to the issue of what was the best means of fulfilling the donor’s intent, the district court again had only the document to aid in this endeavor. The agreement, states the district court, offers no alternative to reversion. Thus, concluded the court, the extreme remedy of forfeiture would best effectuate the donor’s intent.

Because these factual findings are not clearly erroneous, and no error of law appears, we affirm the district court.³

1 . Our first opinion can be found at Smedley v. City of Waldron, 739 F.2d 399 (8th Cir.1984). The relevant facts are contained therein and will not be repeated at length in this opinion.

2 . The clause in question states:

The City of Waldron shall never sell, transfer, convey, lease, rent or otherwise dispose of the lands herein above described to other persons, firms, groups and/or corporations, except successors and/or assigns of itself, and if it attempts to do so, the lands immediately revert to Hannah Smedley and her heirs[.]

3 . We note that the City does have a right to reacquire the reservoir in a condemnation proceeding. ARK. CONST. art. 2, § 22; ARK.STAT. § 35-902.