Waialua Agricultural Co. v. Christian - 305 U.S. 91 (1938)
U.S. Supreme Court
Waialua Agricultural Co. v. Christian, 305 U.S. 91 (1938)
Waialua Agricultural Co. v. Christian
Argued October 13, 14, 1938
Decided November 7, 1938
305 U.S. 91
1. The rule that a federal court will pay deference to decisions of territorial courts on matters of local concern is applicable to decisions of the Supreme Court of the Territory of Hawaii. P. 305 U. S. 107.
2. This rule applies where the questions decided concern the interpretation and validity of contracts of incompetent persons, and the rights of a grantee in respect of improvements on the land after the incompetent's deed has been canceled. P. 305 U. S. 108.
3. Although the 34th section of the Judiciary Act is not applicable to the territories, the reasons supporting the policy of having the state courts declare the state law likewise support the view that the territorial courts should be free to declare the law of the territories. P. 305 U. S. 109.
4. The power of the Circuit Court of Appeals upon review to reverse rulings of the Supreme Court of Hawaii on the law or the facts should be exercised only in cases of manifest error. P. 305 U. S. 109.
5. Decisions of the Supreme Court of Hawaii which are in conformity with the Constitution and applicable statutes of the United States, and are not manifestly erroneous in their statement or application of governing principles, are to be accepted as stating the law of the Territory. P. 305 U. S. 109.
6. In a suit in equity involving questions as to the validity and construction of particular contracts of an incompetent person -- viz., a deed, a lease, and a contract for maintenance -- and a question as to rights in improvements made upon the land by a grantee under a deed subsequently canceled, the Supreme Court of Hawaii ruled that the contracts of an incompetent person made prior to an adjudication of incompetency are voidable, and that in determining whether relief should be granted, the equities on both sides should be weighed. The court concluded upon the facts of this case (a) that the deed should be canceled, but that the lease and the contract for maintenance should be sustained; (b) that the contract for maintenance should be construed as assigning rents and profits accruing to the incompetent not only during the term of an existing lease, but thereafter as well; (c) that an assignee of the rents and profits had made a valid transfer of them by deed, and (d) that, in respect of the improvements on the land, these should be reserved to the grantee and rights of use as between the grantor and grantee adjusted as provided in the decree.
Held, the Supreme Court of Hawaii's decisions of the questions involved were not manifestly erroneous, and should not have been disturbed on review by the Circuit Court of Appeals. Pp. 305 U. S. 109-111.
93 F.2d 603; 94 id. 806, reversed.
Cross writs of certiorari, 304 U.S. 553, to review the reversal of a decree of the Supreme Court of Hawaii in a suit brought by the guardian of an incompetent person to set aside certain contracts and to recover the rental value of certain lands of the incompetent.