*1 we clearly Because find the evidence the result supports chancery reached we affirm.2 judge, Karnes, Robert David KARNES and Vanetta United States America, Administration, Acting Farmers Home Anna through Garner, Karnes, Karen Karnes David as Executor of Karnes, Deceased, Estate W.T. and J.B. Karnes as Special Personal Estate of Representative MARROW, Deceased v. Wanda Janice Karnes Laura Nell Morris, Ellen Karnes Floy Margaret Hess Sue Karnes Slocum 93-331 864 S.W.2d 848 Court of Arkansas

Supreme Opinion delivered November Agency pertaining rights less of his reason lor if the correct laches or appeal. 2 Appellees, Nonetheless, estoppel, Aging, Lots result 24 and does find that part, deciding bargained was reached. chancery a different for and had appellees’ judge’s could not S.W.2d Arkansas Health Services theory decree, while not partially behalf, prevent appellees had notice of the street-use than undertaken to court will one on which we specifically Comm'n, implement. affirm the chancel exercising et al. Area mentioning decide exception Regard their this *3 Donovan, Donovan, Van Daggett, Dover & J. by: Robert for appellant. Tiner, T. for appellee.

Lohnes a foreclosure action This is from appeal Justice. Glaze, Tom farm, acres) located on the Karnes (110 acreage on some County. 300 acres Cross is entirety, approximately in its (H418) for of gov- A.S.C. number purposes had an farm 1982, the Karnes In January and payments. ernment programs 1982, 4, W.T. con- Karnes. On February was owned by farm son, inter to his farm as an vivos gift acres of the forty veyed . as tenants in and three grandchildren Robert appellant 110 acres to Robert for W.T. sold On March common. $82,500 annum and an interest rate of six percent per payable with each, $7192.73 March beginning installments of annual twenty note and was evidenced by promissory The debt Venetta executed Robert and Karnes. a mortgage secured Robert, that the 110 acres sold to day the same On note to the will leaving W.T. executed his Robert’s time, W.T., during Prior to daughters. W.T.’s appellees, Robert, son, J.B., entire farmed the acreage. another W.T. died and his 1982 will was December On 13, 1991, On March foreclosed admitted to probate. acres, had made the annu- Robert alleging the 110 and the other the affirmative pled al payments. *4 satisfaction, waiver, and accord estoppel, defenses of payment, the statute of limitations. and trial, that he had to W.T. the give claimed agreed

At Robert tracts, (the acres), in his two and 110 forty annual income from note, on and for the annual his payment satisfaction continued until W.T.’sdeath. While that this method of payment no direct to W.T. and could admitted he made Robert he canceled checks or records of produced receipts, produce made the farm in an and on government payments grain receipts the total income the during effort to determine produced evidence, he Robert be given in From requested dispute. the income and that of government payments credit for portion Further, his he that acreage. argued that could be attributed to five to the suit were barred due over years prior any payments counterclaim, the limitations. On Robert asked the statute of land, the note the rental value of the to him credit on for give court 41 that W.T. was a in contending “mortgagee whose possession” estate had for accounting the burden rents received.

The held chancellor dismissed the counterclaim and that Robert had the burden of which he failed satisfy. to How- proof ever, the court found an between and Robert limitations, existed which sufficient the was to toll statute of but at the to a dollar value would reducing attempt trial, require court. speculation by Following property was sold at sale was foreclosure and purchased by $70,000, with a awarded deficiency judgment against and Vanetta Karnes. This followed the order of foreclo- appeal sure and deficiency judgment.

First, the claim that the erred by ignor- chancellor of the ing language held W.T. mort- plain mortgage gage part follows: provides case failure to nonpayment agree- perform (cid:127) contained, GRANTEE, GRANTEE’S,

ments herein the said heirs and shall have the and take assigns right to power herein possession and property conveyed expel any law; therefrom without collect occupant process to rents same profits apply unpaid indebtedness^] that this Appellants argue W.T. as language obligated mortgagee 110 possession rents and from the acres to apply profits Robert’s debt. In cite number they of Arkansas cases support, wherein this court rule that applied general mortgagee possession of land liable for all mortgaged is rents col profits lected or rents could be collected by ordinary diligence. Additionally, must those mortgagee possession apply he amounts for which is liable the debt on the Den mortgage. Lack, ham v. (1940); S.W.2d 243 Robertson Read, Thus, (1889). Ark. claim since W.T. was a mortgagee and was liable for possession applica debt, tion of the rents to Robert’s the chancellor erred profits when he found the burden on the See 55 appellants. Am. Jur.2d Mortgages §

The threshold is whether W.T. a in question mortgagee If W.T. was a in possession. had mortgagee possession, appellees the burden to account for the and rents received profits a in If W.T. was not mortgagee possession, land.

mortgaged were made. the burden to bore prove appellants (5th 1979) ed. defines Dictionary Law Black’s as follows: in mortgagee possession real who is of possession A mortgagee property or assent of mortgagor, express it with the agreement and because and in his recognition mortgage or implied, it, as make the satis- and under such circumstances an to his being faction of his lien equitable prerequisite dispossessed. 2d in order Accordingly,

See also 55 Am. Jur. Mortgages § and thus mortgagee W.T. to have been found possession he must have rents and mort- possessed liable for the profits, (2) with the (1) land because of his status as mortgagee, gaged (3) of the to the exclu- mortgagor, consent implied express also Armistead v. Bishop, sion of the See mortgagor. Here, W.T. owned more than the 110 acres acreage failed that W.T. under the and the mortgage, prove of the acres to the exclu- mortgaged had as mortgagee possession Robert. sion of evidence showed that Robert had actual or

In fact the land of the mortgaged during part constructive possession W.T., J.B., Robert, as farmed time at issue. In partners, farm with each one-third of receiving gross. By the entire admission, that he Robert testified farmed mortgaged his own 1984, 1985, 1986, and that in he harvested land Karnes, and Archie land.- In J.B. Betty same lands, (a tenant) the Karnes for a few farmed except Stephens W.T.farmed. In J.B. and Betty acres which tenants, farmed Karnes lands. and Lynn Murphy, the Karnes lands. J.B. farmed to the point government payments ASC and that this is evidence

made to W.T. as operator However, this evidence that W.T. was mortgagee possession. that W.T. was a mortgagee alone does not possession. prove follows, this court has held: As

43 is, however, essential, It before there is an account- as that the must ability mortgagee possession, possession be taken under and reason of the under mortgage, such circumstances as would a court in justify treating under the possession mortgage. being v, 172, (1913) (cite omitted). Armistead 174 110 Ark. Bishop, In accord Pine Credit 252 Lloyd, Production Assoc. Ark. Bluff (1972) (no 480 S.W.2d 578 evidence that the was mortgagee ever in Since failed to W.T. was possession). appellants prove the burden remained mortgagee on the possession, proof made show on the note. appellants the, Second, claim that an between Robert and W.T. had modified the note so that W.T. promissory was to Robert’s share of the annual apply rental satis crop faction for the on the note.1The chancellor deter annual.payment reached, mined that some agreement was but that he was unable to determine what that exactly agreement was and that any appli cation of a dollar amount or rental assignment any value to the' would be at best. speculative

The chancellor took note of the fact that in particular Robert stated under oath in answer to that he owed interrogatories $82;500, his father was same amount Robert owed Further, that, W.T. in 1982. the chancellor found during the tax records of both question, Robert and W.T. failed to evidence that provide had been made and interest income had been earned. is an affirmative

Payment defense and the burden is on the it. Miles v. party asserting Ark. Teague, 1288, 441 (1969); S.W.2d 799 Inc. v. Pulpwood Suppliers, First National Bank in 21 Ark. Stuttgart, 729 S.W.2d 425 App. Further, (1987). it is for the chancellor to judge credibility of the witnesses and the court will not reverse a chan appellate cellor’s of fact finding unless clearly against preponderance the evidence. v. Little Dudley River 305 Ark. County, Street, (1991); S.W.2d 645 Riddick v. 858 S.W.2d 1 The did not the Statute of Frauds for modification or nova tion note. that the A review of the record indicates chancellor that the failed to was not erroneous clearly finding made Robert either under the origi- prove payment *7 other agreement. nal note or under some promissory next cite argument, they Turning appellants’ 18-49-101(a) (1987) which that suits Ark. Code Ann. provides § barred if have foreclose be not been mortgages may they within the of limitation for a suit on the debt. brought period 16-56-111(a) 1993) further Section that actions (Supp. provides under seal “shall be with notes not commenced promissory accrue, after the cause of action shall and not there five years that after.” That statute also shall toll provides partial payment Pruitt, In accord v. 226 Ark. Billingsley the limitations period. (1956). When the debt S.W.2d is install payable 291 498 ments, the statute of limitations runs each installment against v. from the time it becomes due. Bank New York Part University ners, Ltd., (W.D. Ark. Linke 1989) F. Supp. [citing Kirk, (1942)]. 162 S.W.2d 39

Here, the out that Robert’s appellants point promis 15, 1982, with the note was on March first sory signed payment 15, 1983, due on March and foreclosure suit was not filed until Thus, limitations, March under the five-year 1991. statute are law assert that the barred from recov appellants appellees by those that became due to March ering payments prior true, due in the being This appellants payments 1983, 1984, $21,578.19, and for total amount of are We barred. agree.

In the statute of limitations did not bar holding any note, due under Robert’s the chancellor found that “some of an was reached between W.T. and type agreement and that was sufficient to toll the statute.” In context, the same the chancellor also said that to reduce the agree ment to a dollar amount would be in sheer engaging speculation, think, and we he failed to mention evidence on significantly which he relied to find an existed between W.T. above, fact, Robert. as discussed deter very judge, clearly that no W.T. Robert or the other given mined the statute clearly wrong concluding appellants. judge Therefore, circumstances. we was tolled in those limitations reverse and remand on this point. claim the note

Finally, control the owned on the between and Robert does not debt acres, will controls. Under this argument, but instead W.T.’s under aver a final must be made disposition testator, will, terms of the to the intent of the according will that it is clear the terms W.T. intended from note. less than the face amount of the to take Article VI of the will follows: provides Marrow, Wanda Janice Karnes Laura daughters To my Morris, Nell Ellen Karnes Karnes Hess Floy Margaret Slocum, Sue I and devise in shares a give equal certain Promissory Note mortgage .secured *8 in myself Robert David Karnes to the original principal $82,500 (20) annu- amount of payable twenty equal al interest at installments the rate 6% including per annum.

It is clear that W.T. the note language to bequeathed Thus, his without limitation. the received daughters daughters all under the note that were held the rights obligations tes- addition, tator. In the can receive more than daughters no what if would be entitled to receive alive. conclusion, because the did not their bur- satisfy den of evidence that were proof made in by presenting payments satisfaction of the note or a modifying agreement, the as note had a legatees the to foreclosure. right However, since no payments found to partial payments limitations, toll the statute of due in the years payments 1984, and are barred amount must be judgment reduced accordingly.

Affirmed in reversed and remanded in part, part. J., Brown, J., Newbern, participating. concurring part; part. dissenting I would affirm Brown, Justice. the chancellor’s

Robert L. decision across board.

The second the chancellor’s fact majority guesses óf finding that a to farm income to note separate agreement apply payments son, was entered into between W.T. and his appellant and that were made under that payments agree- chancellor, ment. to According separate agreement and the rent tolled the statute of limitations for the 1983, 1984, and his letter specific language opin- ion is this: the decedent’s tax returns he

Although indicate rents, received it must be remembered that he gross owned other lands on rents were received. If the Court were to account for the attempt rents it would be profits, and that is engaging something this Court speculation cannot do. The Defendants have the burden of proof this issue and does not that documentary proof satisfy burden.

STATUTE OF LIMITATIONS: stated, the

As Court is to resolve unable the issue of finds, however, amount of rents and It profits. there is that some were made and that this action is not barred limitation.

The counterclaim is dismissed. This has been well case as it could presented have been What the Court is presented. trying say is that some *9 anof was reached between type agreement the decedent was, and his son Robert Karnes. Whatever agreement it was sufficient to toll the statute limitations. If the Court were to to reduce the try to a dollar amount value, an obligation to account on a fair rental it assign would be in sheer engaging speculation. found chancellor that there was a second

between father and son to the of farm relating income application to debt. He found that made actually pursuant However, that agreement. the amount of those he payments, concluded, was and the did impossible quantify, Nevertheless, their satisfy burden regard. fact of the agreement and the of an undetermined amount tolled the statute of limitations in his judgment.

The chancellor’s to me. findings entirely reasonable appear We should be reluctant in our find- this case to substitute factual ings for those the chancellor the benefit hearing who had the testimony and on a difficult issue. I would not argument reverse on this point.

Raymond Dale LYNCH v. STATE of Arkansas CR 93-293 S.W.2d Court of Arkansas

Supreme Opinion delivered November [Rehearing denied December 1993.]