134 Ark. 167 | Ark. | 1918
(after stating the facts). Counsel for the plaintiffs rely on the case of Swift v. Erwin, 104 Ark. 459, where it was held that a power to sell real estate does not include the power to give an option to purchase it. They contend that the agreement between the Citizens Company and Booher is only a naked power to sell the property; and that it had no authority to give the option to Lincoln. Thus it will be seen the decision of this case turns upon the construction to be given to the contract entered into between Booher and the Citizens Company on the 26th of August, 1913. The rule governing the construction of such contracts is well settled. The only difficulty is in its application to a given state of facts.
In Hunt v. Rousmanier, 8 Wheat. (U. S.) 174, Chief Justice Marshall speaking for the court said: “"We hold it to be clear that the interest which can protect a power after the death of the person who creates it must be an interest in the thing itself. In other words, the power must be engrafted on the estate in the thing. The words themselves would seem to import this meaning. A power coupled with an interest is a power which accompanies or is connected with an interest. The power and the interest are united in the same person. But if we are to understand by the word ‘interest’ an interest in that which is to be produced by the exercise of the power, then they are never united. The power to produce the interest must be exercised, and by its exercise is extinguished. The power ceases when the interest commences, and therefore can not in accurate law language, be said to be ‘ coupled with it.’ ”
This decision is a leading case on the question and has been generally followed in the United States. The excerpt from it above was quoted with approval by this court in Yeates et al. v. Pryor, 11 Ark. 58.
Therefore, to impart validity to the option contract between the Citizens Company and Lincoln, the Citizens Company must have had the power to make it. In other words there must co-exist with the power to sell given to the Citizens Bank under the contract an interest in the property to be sold. The Citizens Company proceeded under the idea that the contract give it a power coupled with an interest.
On the other hand, it is contended by the plaintiffs that it is a case where property had been mortgaged for the .security of money and the contract only gave the mortgagee the authority to sell the mortgaged property and reimburse itself.
The chancellor adopted the construction placed upon the contract by the defendants, and we think his decision was correct.
The nature of the power is to be determined from a consideration of the purposes and intent of the parties appearing from an examination of the entire instrument. The surrounding circumstances as shown by the instrument are that Booker owed the Valley Savings Company $8,000 secured by a mortgage on the property and owed the Citizens Company $1,600 secured by a second mortgage on the same property. He was unable to pay this indebtedness and the Citizens Company agreed to take up and carry the amount due on the first mortgage. It was expressly agreed between the parties that Booher should convey the property to E. W. Porter for the benefit of both parties equally upon certain conditions. One of these was that the Citizens Company should have the exclusive sale of the property and be allowed a certain commission for making sales. It was also provided that Booher should be allowed a stated commission on any of the property that he might sell. The terms- of the sale were then provided for in the instrument. Then follows a section as to the disbursement of the proceeds. It first provides for the payment of commissions and taxes and then for the payment of the indebtedness to the Citizens Company. It then provided that both parties should share equally in what might be left. On the same day Booher executed a warranty deed to E. W. Porter as provided for in the written agreement. The legal title to the property became vested in the trustee with the power to sell and to convey and to divide the surplus equally between the parties. The instrument expressly stipulates that the conveyance to the trustee is made for the benefit of both parties, equally. The language of the instrument gave them a joint interest in the property. Another clause provides that each should be paid stated amounts for making sales. This excludes the idea that the division of the surplus‘was intended merely as a payment of a commission to the Citizens Company for mailing sales of the property. The power given by the instrument is not a mere naked power, but is a power coupled with >an interest in the property itself. Bonner v. Cross County Rice Co., 113 Ark. 54; Harr v. Fordyce, 88 Ark. 192; Seymour v. Freer, 8 Wall. (U. S.) 202, and Shaeffer v. Blair, 149 U. S. 248.
Of course the assignment by Booher to Catherina gave the latter no greater rights under the contract than were acquired by the former under its terms.
It follows that the decree must be affirmed.