139 Ark. 469 | Ark. | 1919
This is an action instituted by appellees in the chancery court of Lafayette County against appellant in which the court was asked to declare a certain deed of conveyance in absolute form to be a mortgage and to allow redemption therefrom.
The lands in controversy aggregate 1,242 acres, of which a large portion is in cultivation and they were originally owned and occupied by appellee, Paul M. Booker. His wife, Martha E. Booker, joined with him in this suit. On December 11, 1913, appellees conveyed the lands to appellant by deed absolute in form reciting a consideration of “the sum. of one dollar and other valuable considerations.” It is alleged that this deed, though absolute in form, was intended by the parties as a mortgage. ‘Appellees had previously mortgaged the land to the American Investment Company to secure indebtedness to that concern, and also to the Windsor Trust Company to secure a large debt. The first mentioned mortgage had been foreclosed by decree of the chancery court and the statutory period of redemption had expired and a deed had been executed by the court’s commissioner to W. B. Paschal, the purchaser, about two months before the execution of the deed by appellees to appellant. Paschal held title under his deed at the time of the conveyance, to appellant and had also purchased the land'under a foreclosure decree rendered by the chancery court of Lafayette County to enforce levee taxes due the improvement district known as the Long Prairie Levee District. The time for redemption under that sale had, too, expired and Paschal had received his deed from the court’s commissioner. Appellant, after receiving the deed from appellees, also secured a conveyance from Paschal, the same being executed for the consideration of $37,400, which included the assumption by appellant of the payment of the unforeclosed mortgage to the Windsor Trust Company.
Appellees alleged in their complaint that, at the time of the execution of their deed to appellant, Paul M. Booker was still the owner of the land and had the right of redemption from the judicial sales to Paschal, but that he was financially embarrassed and unable to redeem from the sales of the land and pay off the other indebtedness, and that appellant at that time entered into an oral agreement with him to the effect that appellant should redeem the land from Paschal and allow him (Booker) to redeem by repayment of the sums paid out by appellant with eight per cent, interest, and that it was also agreed that Booker should remain in possession of said lands and cultivate the same from year to year and that if the lands could be sold, the profits over and above the expenses of redemption would be divided between tbe parties. Appellant denied in his answer that appellee Booker owned the lands or had the right of redemption from the sales to Paschal or that there was any agreement, oral or otherwise, entered into by him with Booker whereby the latter was to be permitted to redeem the lands. He alleged in his answer that the only agreement entered into at that time was to the effect that, if Booker could find a purchaser for the lands at a price acceptáble to appellant, Booker should receive a certain portion of the sale price over and above the sums paid by appellant for the purchase of the lands. Appellant also alleged in his answer that there subsequently arose a controversy between him and appellee-Booker as to the terms of their agreement and that on January 6,1915, they entered into a written contract which settled the rights of the parties. The contract is exhibited with appellant’s answer. It recites the controversy between the parties and that the contract was to be in “compromise and settlement of their differences,” and, after reciting a statement of the amount necessary to reimburse appellant for the sums so paid in the purchase of said lands, provides in substance that if Booker should find a purchaser for the lands at any time within three years from that date at a price not less than $50 per acre, and the sale be consummated, out of .the proceeds of sale appellant should be reimbursed in the sum of of $40,480.10 theretofore expended by him in the purchase and all sums expended by him between that date and the date of sale for improvements, including clearing and repairs, with interest at eight per cent, and that the excess price obtained for the land over and above the total of the above mentioned sums should be equally divided between the parties. The contract concludes' with the following paragraph:
“In the event that a purchaser who is ready, able and willing, as above defined, to purchase said lands at the price herein set out, to-wit: Not less than $50 an acre, is not produced by party of the second part within three years from this date, then in that event any and all interest or claims of party of the second part in and to any profits arising from the sale of said lands, and any and all claims or interest in or upon said lands by virtue of the contract mentioned as a part of the consideration in his deed to the party of the first part dated December 11, 1913, shall terminate and be forever barred, and all indebtedness herein mentioned as being due from party of the second part to party of the first part shall by said event stand satisfied and canceled.”
The cause was heard by the chancellor on conflicting testimony as to the substance of the oral agreement between the parties at the time of the execution of the deed by appellees to appellant. The chancellor found in favor of appellees and declared the deed to be a mortgage, and after reference to a master ascertained the balance due, and allowed a redemption.
We deem it unnecessary to discuss the testimony in detail or to determine whether or not it was sufficient to justify the finding that the deed was intended as a mortgage. We will rest our decision on another phase of the case. Suffice it to say that there was a conflict in the testimony and that at the time of the execution of the contract of January 6,1915, a controversy had been pending between the parties as to the substance of their oral agreement. Nor do we deem it necessary to determine whether or not appellees had such an interest in the lands at the time they conveyed to appellant as to legally justify the claim that the deed should be treated as a mortgage. The time for redemption from the sales of the lands to Paschal had in fact expired, and the title of Booker had been extinguished, but he testified that Paschal, or the mortgage company, had verbally agreed to extend the time for redemption, and according to Booker’s testimony the parties to the transaction now under consideration proceeded upon the assumption that he (Booker) had an interest in the lands and that the purchase by appellant from Paschal was to be treated merely as a redemption. Assuming, therefore, without deciding, that under the circumstances described there was an agreement between Booker and appellant, which the latter should in equity have been bound to observe, with respect to treating the conveyance as a mortgage, we pro-'' ceed to a determination of the question urged by counsel for appellant that in any event, appellees are bound by the contract of January 6, 1915.
“By an independent parol agreement the mortgagor may waive his right under a deed which originally, in effect, was a mortgage, and if this agreement is supported by a consideration, or is partially acted on by the parties, or fully performed, the mortgagor is estopped to deny the grantee’s absolute title. The grantee has the legal title already, and the grantor may cut off all right to redeem by a receipt of an adequate consideration thereof, and an informal release of all his interests in the property. But the new agreement must not only be founded on adequate consideration but must be fair and reasonable in its terms and free from fraud or undue influence.” 1 Jones on Mortgages, § 338. The text is supported by the following authorities: Perkins v. Drye, 3 Dan. 170; School v. Hopper, 134 Ky. 83; Scanlan v. Scanlan, 134 Ill. 630; Cramer v. Wilson, 202 Ill. 83; Hutchinson v. Page, 246 Ill. 71; Jordan v. Katz, 89 Va. 628; McMillan v. Jewett, 85 Ala. 476; Haggarty v. Brown, 105 Iowa 395; Sears v. Gilman, 199 Mass. 384.
The lands did not constitute the homestead. For two years before the purchase of the lands by appellant from Paschal they had been in the hands of a receiver appointed in the foreclosure suit and appellee Booker had occupied them merely as a tenant of the receiver. Paschal acquired the title from the foreclosure sales and conveyed it to appellant. It is true that Booker occupied the lands during the year 1914, but he did so under the agreement with appellant to pay rent. He moved off the premises about the time the contract of January 6, 1915, was executed.
There was no inchoate dower right for the reason that the husband, Paul M. Booker, was not seized of an estate of inheritance after his title was extinguished under the foreclosure sales to Paschal. Under our statute giving the right of dower, there may be dower in an equitable estate, but there must be such a right of immediate possession on the part of the husband as to constitute seizin in law. In Tate v. Jay, 31 Ark. 576, the court said: ‘ ‘ Seizin is either in deed, or in law; seizin in deed, is actual possession; seizin in law, the right to immediate possession. Unless such seizin existed during coverture there can be no dower, because it is an indispensable requisite to her right to dower, so declared by statute.” Since Booker’s title had been extinguished by the foreclosure sales to Paschal, he did not re-acquire title, either legal or equitable, so as to constitute an estate of inheritance with seizin in fact or in law under his original agreement with appellant. He, at most, acquired only an equitable right to hold appellant as a trustee and he still had the power to contract away the rights thus acquired. He could do so either hy his contract in writing or by acts constituting estoppel as was held in Bazemore v. Mullins, supra.
We are of the opinion, therefore, that the chancellor erred in failing to give effect to the last contract between the parties and in rendering a decree in favor of appellees. The decree is, therefore, reversed, and the cause remanded with directions to dismiss the complaint for want of equity.