483 S.W.3d 825
Ark. Ct. App.2016Background
- L.G. Foster executed a will (2008) leaving residue to Shriners; a 2012 codicil directed sale of his residence at death with net proceeds to Shriners if still owned then.
- In March 2013 Foster executed a durable power of attorney naming Frederick Romo; the POA authorized sales but did not expressly authorize gifts.
- On April 11, 2013 Romo (as attorney-in-fact) signed a warranty deed conveying Foster’s residence to First United Methodist Church of Ozark (FUMC), reciting consideration of $10 and "other good and valuable consideration."
- Foster died May 22, 2013; the residence was not in the probate inventory because of the prior deed; estate closed June 10, 2014; Shriners brought a declaratory-judgment action claiming the conveyance was a void gift exceeding Romo’s authority.
- FUMC moved for summary judgment arguing the deed’s recital established a sale and the parol-evidence rule barred evidence showing a gift; the trial court granted summary judgment for FUMC and denied Shriners’ new-trial motion.
- The court of appeals reversed and remanded, holding the parol-evidence rule was misapplied and Shriners should be allowed to present evidence that the conveyance was a gift (which would exceed the attorney-in-fact’s authority and be void).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether parol-evidence is barred from showing the deed was actually a gift | Shriners: parol evidence admissible to show deed was void because Romo exceeded POA authority by gifting property | FUMC: deed recites consideration; parol-evidence rule bars extrinsic evidence contradicting written deed | Court: Parol-evidence rule was misapplied; Shriners may introduce evidence to show conveyance was a gift and thus void |
| Whether an attorney-in-fact can make a gift absent express authority in the POA | Shriners: power to sell doesn’t imply power to gift; absent express grant, gift is unauthorized and void | FUMC: deed language evidences a sale; parties and interested persons bound by instrument | Court: Agrees legal principle that gifts require express authority; issue remains fact-dependent and parol evidence allowed to determine nature of transaction |
| Whether the deed’s recital of consideration conclusively proves a sale | Shriners: recital is not conclusive if extrinsic evidence shows true nature was a gift | FUMC: recital establishes sale and forecloses contrary evidence | Court: Recital not dispositive here because Shriners is not altering the deed terms but challenging validity due to lack of authority—extrinsic evidence may be considered |
| Whether res judicata barred Shriners’ suit because estate closed | FUMC: probate closing precludes relitigation | Shriners: probate did not adjudicate the validity of the attorney-in-fact’s conveyance | Court: Trial court correctly rejected res judicata; issue not precluded |
Key Cases Cited
- First Nat’l Bank v. Griffin, 310 Ark. 164 (1992) (parol-evidence rule bars extrinsic evidence to vary written agreements and is substantive law)
- Sterling v. Landis, 9 Ark. App. 290 (1983) (parol-evidence rule does not bar strangers to an instrument from introducing evidence to vary its terms)
- Rainey v. Travis, 312 Ark. 460 (1993) (discusses application of parol-evidence rule to persons claiming rights under an instrument)
- Barfield Mercantile Co. v. Connery, 150 Ark. 428 (1921) (early Arkansas discussion of parol-evidence limitations)
- Duke v. Shinpaugh, 375 Ark. 358 (2009) (conveyances by agent exceeding authority are void)