This is the fifth appeal in this diversity jurisdiction case.1 Arthur R. Morrison, who was engaged in financial controversy with his estranged wife, was the owner of valuable lands in Rosslyn, Virginia and in Bre-vard County, Florida. He contracted to convey those lands to Capital Investors Company, a shell corporation wholly owned by James T. Benn, for $1,100,000 represented by unsecured notes. Because of Mrs. Morrison’s claims against the Virginia lands, the contract was renegotiated and a new agreement entered into affecting the Virginia lands alone. Notes were issued to Morrison and Mrs. Morrison in the amount of $500,000 each, while $100,000 was retained by Capital Investors to “clear the title” which was encumbered by a relatively small deed of trust and which was complicated by what purported to be a prior conveyance of the fee and by another instrument which purported to be a ninety-nine year lease.
In the course of clearing the title to the Virginia lands, the district judge required Benn to give the Morrisons deeds of trust to secure their notes. There was default in the payment of the notes, and the Morri-sons repurchased the Virginia lands at a foreclosure sale.
At the time of the first contract between Morrison and Capital Investors, a deed was signed by Morrison conveying the Florida lands to Capital Investors, in return for which he received Capital Investors unsecured notes in the amount of $400,000.2 Benn persuaded Morrison that he could not lawfully encumber the Florida lands to secure the payment of the notes of Capital Investors because the title was uncleared.3
Initially, the district court held there was no evidence of fraud on Benn’s part. At the time, it was concerned solely with the Virginia lands and at the time there was no evidence of a number of transactions affecting the validity and the value of the notes of Capital Investors. Later, after a full trial before another district judge, it *654was found that no consideration had been paid for the conveyance of the Florida lands and that Capital Investors did not intend to comply with its obligations by paying the notes. He imposed a constructive or resulting trust upon the Florida lands, or the notes representing their proceeds. On appeal we affirmed that decision.
Shortly after issuing its notes aggregating $400,000 for the Florida property, Capital Investors sold the land to Do-Mor, Inc. for $460,000 of which $400,000 was represented by notes secured by a mortgage. Later, Capital Investors transferred the Do-Mor notes to another corporation owned by Benn and later to still another. One note in the face amount of $25,000 was paid by Do-Mor; another in the face amount of $50,000 was sold to Mrs. Morrison. The remaining two, aggregating $325,000, after default, were sold for $150,000 to a nominee of Norman B. Frost, who, in turn, sold a one-half interest in the notes to Harry Dreisen for $75,000.
After our affirmance of the judgment establishing a constructive or resulting trust, Frost and Dreisen intervened. The district judge then undertook to balance the equities between Morrison, on the one hand, and Frost and Dreisen, on the other hand, and, considering Frost and Dreisen untainted by Benn’s machinations, he concluded that they should prevail. We reversed. We held that the Uniform Commercial Code controlled, and that, since the Do-Mor notes were in default at the time of their purchase by Frost, they took the notes subject to lawful claims against them. However, we rejected Morrison’s contention that Frost and Dreisen were bound by the earlier decision imposing a constructive or resulting trust upon the notes. They had not been parties to the litigation when that issue was heard and decided. We thought they should have an opportunity to reliti-gate the issue if they could produce additional relevant evidence.
On remand, Frost and Dreisen produced no new evidence, but did prevail upon the district judge to review his earlier decision imposing a trust upon the notes. At this time he found no fraud on Benn’s part. Alternatively, he found that Morrison’s claim to the Florida lands was foreclosed by a release purportedly signed by Morrison. He found that the release was supported by a consideration and effectively barred the claim.
I.
While we held that the strict rules of res judicata did not foreclose relitigation of the issue by Frost and Dreisen, who had not been parties to the litigation when the issue was decided, we did not intend for earlier findings and conclusions, which had been affirmed on appeal, to be overturned with no new evidentiary basis for it.4 There was no infirmity in the earlier findings and conclusions. After their affirmance on appeal, the principles of the law of the case required adherence to them.
The principle is not absolute nor inflexible. In such cases courts have an inherent power to correct earlier error, if it becomes apparent, and to avoid injustice, but there is no such situation here. The evidence of Benn’s fraud is compelling.
Benn persuaded Morrison to accept the unsecured notes of Capital Investors. There was no cash payment. He was careful not to obligate himself. He quickly had Capital Investors deed the land to Do-Mor, and then he stripped Capital Investors of its only assets, leaving it with no resources with which to pay anything on the notes given to Morrison. Do-Mor paid one note in the face amount of $25,000, but it is not clear that any of that got to Morrison. The $50,000 note which had been sold to Mrs. Morrison was subsequently paid by Frost and Dreisen. No payment was ever made on the remaining notes aggregating $325,-000. The mortgage securing the payment of those Do-Mor notes has now been fore*655closed by Frost and Dreisen, however, and they acquired title to the land in the foreclosure sale. What Benn did amply supports the finding that he never intended that the Capital Investors notes be paid; he diverted all of Capital Investors’ assets and stripped it of all means of payment. In the process, what cash flowed to Capital Investors or to Benn, or to other controlled corporations probably was not passed on to Morrison. All of it certainly was not.
Benn was an accomplished fraud artist. On a plea of guilty, he was convicted in 1971 in the United States District Court of the District of Columbia of fraud by mail. In 1963, the Tax Court found him guilty of tax fraud. T.C. Memo 1963-151. In its opinion, the Tax Court referred to a pattern of acquiring valuable properties largely on the basis of notes which were, or became, worthless and which Benn never intended paying. The kind of complicated schemes in which he engaged are illustrated in the opinion of Judge Jones in Sankin v. 5410 Connecticut Avenue Corporation, D.C.D.C., 281 F.Supp. 524 (1968), in the opinion of Judge Fulton in Walsh v. Continental Insurance Underwriters, Inc., (S.D. of Fla No. 63-576-Civ-CF, 1965) and in the opinion of Judge Hoffman in Freehill v. Benn (E.D. of Va., No. 3421, 1969). He had the capacity of persuading even sophisticated business people to place their trust in him. Though he was not a lawyer, he dealt in legalisms. He convinced Morrison that he was a “legal genius” and a helping friend. What he did to Morrison, however, was in the pattern disclosed in the court cases. When he stripped Capital Investors of its assets and devoted them to his own use without paying the Morrisons, he clearly established that his intention, from the beginning, was not to pay the Morrisons.
Frost, about whom the district judge was concerned, was not entirely an innocent, unsuspecting victim of deception. Several reasons for this are catalogued in the opinion reported at 484 F.2d 1157 at pages 1164 and 1165. Frost, now deceased, was a reputable lawyer in the District of Columbia, but he knew Benn. His firm represented some of Benn’s associates in the Sankin case. Indeed, he paid Benn only $100,000 for the two notes, the remaining $50,000 of the price being a credit for legal fees due Frost’s firm by Benn’s associates, the payment of which Benn had guaranteed. From the facts in the Sankin case, Frost was bound to have known the kind of man Benn was.
Under the circumstances, we think the district judge was required to adhere to his earlier findings and conclusions that a constructive or resulting trust did arise.
II.
Within three months of the initial transaction, Morrison purportedly signed a release acquitting Capital Investors and Benn of all claims by him. Released were any claims to the Florida lands and to any payments by Do-Mor on its notes. The release was under seal and delivered in Virginia. The district court held that Morrison’s estate had failed to prove there was no consideration for the release, and he concluded that it was valid and binding.
Benn never testified that he gave any actual consideration for the release. He claimed generally that he had given or paid Morrison some $28,500, though Morrison testified it was no more than $4,000. The contract obligated Benn to pay to Morrison a minimum of $25,000 a year, for living expenses, until the titles were cleared. Benn produced receipts purportedly signed by Morrison for cash payments in 1963 of $30,537, but, of that, $12,500 was payment for some corporate stock, according to Benn’s testimony.. Thus, only $17,500 was paid to Morrison by Benn in 1963 for the real estate, and that would have been upon his obligation to make advances for Morrison’s expenses each year up to $25,000. The release was dated August 6, 1963, and the nearest date to that date of any of the receipts is July 15, 1963, when Morrison acknowledged the receipt of $2,037.5 There *656was no receipt for any payment by Benn in 1963 after July 15. Even if it be assumed that some portion of whatever monies Benn funneled to Morrison was purported consideration for the release, the consideration was grossly inadequate, for the Morrisons held notes aggregating $1,000,000, and the lands were thought by Morrison to be worth that.
Defensively, it is suggested that under Virginia law the seal on the release conclusively imports consideration, at least when the litigation is between the original parties.6 There are exceptions, however, when different parties are involved, and possibly when proceedings are in equity, as these are.7 Surely, however, there is an exception in equity when an application of the strict rule of the common law would perpetrate a fraud or grave injustice.
In Cooper v. Gregory, 191 Va. 24, 60 S.E.2d 50, the holders of contingent remainders under the will of their father purported to convey a portion of the land in fee to their sister in exchange for a promise to care for another, mentally incompetent, sister as long as the incompetent lived. The agreement was under seal. Apparently the sister, as long as she lived, did take care of the incompetent, but after her death the representatives of her estate declined to do so longer. The purported grantors of the land sought to enforce performance by the sister’s estate of the agreement she had made. The Supreme Court of Virginia held the agreement unenforceable despite the seal. First, it was said that the purported grantors of the land had only contingent remainders in it so long as their mother lived, and they were without power to make a valid conveyance. Moreover, it was said, if anything was conveyed, its value was so slight in comparison with the financial burden assumed by the sister that it would be unconscionable to enforce the bargain. The Supreme Court of Virginia concluded:
“Equity will not lend its aid to the performance of such an unconscionable bargain — certainly not in a case of this nature where the other contracting parties surrendered no rights and suffered no detriment.”
Here there was no proof that any consideration was paid for the release.8 The dates and the amounts of the payments Benn claimed to have made are known, and none of them can be related to the release. If any at all was paid, it was a pittance in contrast to the claim released. The release purports to be a release of all claims, though there is specific reference to the Florida lands and the Do-Mor notes. If construed to apply to the Florida lands alone, the claim purportedly released was still for more than $400,000. The gross disparity between the amount of the claim and any possible consideration for the release makes enforcement of the bargain outrageously unconscionable.
Benn was an experienced con artist, once convicted of tax fraud. We do not know how he did it, but for a while at least, he seemingly could persuade Morrison to do anything Benn wished. He persuaded him to sell him the Virginia and Florida lands for unsecured notes (he gave the Morrisons a deed of trust on the Virginia lands only because Judge Butzner, after the first trial, required him to do it). He persuaded Morrison that there was some legal inhibition in Florida which prevented his securing payment of the notes arising out of the transfer of title to the Florida lands. Benn had placed the certificate representing the stock *657of Capital Investors Company in eserow, supposedly to give Morrison some little security, though it was precious little, but he soon persuaded Morrison to agree to a release of that escrow agreement. If Morrison signed this purported release so soon after the initial agreement with Benn, it is but one more testimonial of Benn’s persuasive power over him. But it was the same kind of persuasive power exercised by Benn over other victims, as the reported cases show.
Since there was no actual consideration for the release, or, if any, so little as to make enforcement of the release unconscionable, we find under Cooper v. Gregory that under Virginia law the seal should be disregarded and the release declared invalid.
Since Frost and Dreisen have converted their ownership of the Do-Mor notes into ownership of the land, the Morrisons now have a constructive or resulting trust in the Florida land and are entitled to an order requiring the defendants to convey it to them. However, the defendants will be entitled to some credits. They paid the $50,000 Do-Mor note which had been purchased by Mrs. Morrison. Supposedly they have paid taxes, and there may be other items of expenses which equitably may be chargeable to the Morrisons upon a recon-veyance of the land. On the other hand, they should be accountable for any income. This will necessitate some accounting and further proceedings in the district court.
REVERSED AND REMANDED.
. Our earlier opinions are reported at 484 F.2d 1157 (4 Cir. 1973); 453 F.2d 1365 (4 Cir. 1972); 387 F.2d 591 (4 Cir. 1967); 360 F.2d 462 (4 Cir. 1966).
. Benn did put the certificate representing the capital stock of Capital Investors in escrow, but Morrison soon released it.
. There was a recorded deed from Morrison to another who was later held to have been a naked trustee.
. See Virginia Electric & Power Company v. NLRB, 132 F.2d 390 (4th Cir. 1942), affd 319 U.S. 533, 63 S.Ct. 1214, 87 L.Ed. 1568 (1943); Stonega Coke Sign & Coal Co. v. Price, 116 F.2d 618 (4th Cir. 1940).
. Morrison, of course, denied that he received more than approximately $4,000. He specifically denied receipt of the $10,000 payment for which Benn produced a receipt.
. Norris v. Barbour, 188 Va. 723, 51 S.E.2d 334 (1949); Turner v. Hall, 128 Va. 247, 104 S.E. 861 (1920).
. See Branch v. Richmond Cold Storage Inc., 146 Va. 680, 132 S.E. 848, 851 (1926), in which it is flatly stated that the common law rule that a seal imports consideration is not the rule in equity.
. The presence of the seal would place the burden upon Morrison to go forward with evidence to show the absence of consideration for the release, but there is no absence of evidence. Morrison testified that he never got more than $4,000 from Benn, and the receipts show exactly what Benn claimed to have paid Morrison and when.