95 So. 694 | Miss. | 1923
Lead Opinion
delivered the opinion of the court.
On the 26th day of October, 1015, H. R. Jenkins and his wife, Elizabeth Jenkins, conveyed to the appellant, Ben T. Pennington, certain lands in Tallahatchie county involved in this litigation for the consideration of one thousand dollars cash in hand paid, receipt of which was acknowledged, and the further consideration of the assumption of all of the obligations and indebtedness of the said H. R. or Elizabeth Jenkins which is secured by a lieu on the property therein conveyed, which indebtedness the appellant, Pennington,' agreed and promised to pay as part of the consideration for said deed.
About the year 1918 H. R. and Elizabeth Jenkins filed their bill in the chancery court alleging that the said deed was in fact a mortgage and that they had remained in the possession of the property, and prayed for an accounting of the amount due Pennington and for a redemption of the mortgage. Jenkins and his wife, Elizabeth, employed
The meetings and negotiations as above stated were- had on the night of the 15th of November, 1919, partly in the office of A. H. Stephens .and partly in the People’s Bank of Sumner. Mr. Ben T. Rowland, Jr., the cashier of the People’s Bank, was present representing the bank, and agreed to have all the papers above mentioned drawn up without expense to the other parties, and all the pallies left the papers to be prepared by Rowland; Pennington, the appellant, giving his check for the seventeen thousand five hundred dollars to be paid when the check of Outrer was paid and when the papers were prepared in accordance with the agreement. The note of Outrer and Stephens for twenty-seven thousand five hundred dollars was to be redelivered to them. The deeds of trust were filed for record in the following order: First, the deed of trust to Pennington at 10:30 a. m. on November 20, 1919; the deed of trust to the People’s Bank at 11:30 a. m. on the same day; and the deed of trust to J. W. Jenkins and G. O. Jenkins a,t 12:30 p. m. on the same day.
About one year after these papers were taken and recorded, Ben T. Rowland, Jr., having then recently died, the president of the People’s Bank of Sumner, Mr. T. 0. Buford, in checking np the affairs of the bank and checking np the records, found that Pennington’s deed of trust was recorded prior in time to that of the bank and that the records showed that it matured on January 1, 1921.
Whereupon the People’s Bank of Sumner and J. W. Jenkins and G. C. Jenkins filed a bill setting forth that the bank’s deed of trust was a prior deed of trust to the other two deeds of trust, and that the deed of trust of J. W. Jenkins and G. C. Jenkins was a second deed of trust, and that Pennington’s deed of trust was a third deed of trust; and also setting up that the date of the maturity of the note and deed of trust to Pennington had been ma
Pennington proceeded to advertise the property for sale under the terms of the deed of trust, and at' such sale bought the property in, and the trustee made a deed to him therefor. He then filed an answer to the bill denying that his deed of trust was subordinate to that of the bank, or to that of J. W. Jenkins and G. C. Jenkins, and asserted that his deed of trust was the prior deed of trust constituting the first lien upon the property in controversy, and denied that the agreement was that his deed of trust was to mature on January 1,1926, but asserted that it was to mature on January 1, 1921. He denied that there was any alteration of the said note and deed of trust or that he had knowledge of any change therein, but asserted that the deed of trust as recorded was in accordance with the understanding and agreement between himself and the said H. B. Jenkins and wife, Elizabeth Jenkins. He admitted that he was asserting a prior right to enforce his deed of trust against the property in controversy, and charged that same has priority over the deed of trust of the complainants, the People’s Bank of Sumner and J. W. Jenkins and G. C. Jenkins. He charged that the note for forty-five thousand dollars, payable to Pennington and the deed of trust securing the payment of the same were executed for a valuable consideration moving to the said H. B. Jenkins and Elizabeth Jenkins, and that said note and deed of trust were in full force and effect and had not been altered in any way whatsoever; that said Pennington had no knowledge of the existence of a deed of trust in favor of the complainants or any of them, and no knowledge or information relative to the indebtedness secured thereby, and no knowledge of the execution or recording thereof, and had no agreement or understanding with any
It was further alleged in the answer and cross-bill that said deed of trust of Jenkins to Pennington becoming in default, Pennington had caused the same to be advertised for sale and sold in accordance with the terms thereof, and that the property was purchased by him, and that he was the owner thereof, and that the claim of the complainants casts a cloud upon his title which he is entitled to have canceled and to have his title confirmed and to be decreed the possession of the land.
The cross-bill was answered and the allegations thereof denied.
“The People’s Bank. Capital Stock $50,000.00.
“Sumner, Miss., Nov. 19, 1919.
“Dear Ben: I had the Joe Jenkins papers drawn up and I carried same up thére and the Chancery Clerk and had both to sign, Joe and his wife. You now hold a first mortgage. I am having recorded' and will give to you the first time you are down here.
' “With best wishes, I am,
“Your friend truly, Ben T. Rowland, Jr.
“I made the note due January 1, 1921, and it bears interest from date a.t six per cent.”
The chancellor after hearing the evidence decreed that the Pennington note and deed of trust were altered in a material particular by Pennington and that such alteration was fraudulently made, and also decreed that the deed of trust of the People’s Bank was the first deed of trust superior to the others, and that the deed of trust in favor of J. W. Jenkins and G. C. Jenkins was prior to the Pennington deed of trust, and subordinated the Pennington deed of trust to the two deeds of trust mentioned. He also dismissed the crossbill of Pennington filed against the People’s Bank and J. W. Jenkins and G. C. Jenkins, the complainants in the original bill, and also filed against H. R. Jenkins and his wife, Elizabeth Jenkins, who were made defendants to the cross-bill, and from this decree this appeal is prosecuted.
On the hearing H. R. Jenkins and his wife, Elizabeth Jenkins, testified that Ben T. Rowland, Jr., and Mr. Henderson, the deputy chancery clerk, came to their place and took their acknowledgments to the said deeds of trust; that the first deed of trust signed by them was a deed of trust to the People’s Bank, that the second deed of trust was one to J. W. Jenkins and G. C. Jenkins, and that the third
A majority of the members of the court are of the opinion that the chancellor was not warranted by the evidence in finding that the People’s Bank’s deed of trust was .a prior one and that of Pennington was a secondary one or a subordinate one. All of the documents in evidence, including the recordation of the instruments show that Pennington’s deed of trust was to have priority. Pennington already at the time of the transaction had a first lien on the land and absolute title to the land confirmed by the chancery court in a suit between the parties, and that he had conveyed to Cutrer and Stephens, reserving in his deed a vendor’s lien, and having received seventeen thousand five hundred dollars in cash from Cutrer and Stephens, and also their note with a vendor’s lien for twenty-seven thousand five hundred dollars. This transaction was completed and closed on November 10, 1919. It further appears in evidence beyond dispute that Cutrer and Stephens took title as attorneys or trustees for Jenkins and became personally and absolutely bound for the payment of the forty-five thousand dollars purchase money. It further appears Avithout dispute that the fees of the said attorneys and the costs of the' suit referred to amounted to twenty thousand dollars, and that Cutrer and Stephens had an interest or fee to be cared for by the land which caused the loan to be made by the bank. In other words, the loan from the bank to H. R. Jenkins and Elizabeth Jenkins was for the purpose of paying Stephens and Cutrer and the costs of the suit in Avhich the consent decree had been entered. The testimony shows that the land of H. R. Jenkins consisted of five hundred sixty acres and at the time of the transaction Avas Avorth from two hundred dollars per acre up. To secure this twenty thousand dollar loan the bank secured a lien on other lands, being two hundred fifty-five acres OAvned by J. W. Jenkins and G. C. Jenkins, together with their indorsement.
Just why Pennington would surrender his place as prior lienholder of the land to secure the payment of the twenty-seven thousand, five hundred dollars, and give up the seventeen thousand five hundred dollars cash already in • his hands to take a third place in this transaction, would be hard to understand. It would be unnatural for persons to give an enormous amount of security which the Jenkinses gave the bank, including the homes of J. W. Jenkins and Gf. C. Jenkins, when beyond all doubt the land, as then valued of H. R. Jenkins alone was worth fourfold the amount of the money being borroAved from the bank. Mr. Rowlánd’s' letter' to Pennington could only be accounted for on.the theory that he was aiding Pennington in a fraud and defrauding his own bank of which he was cashier if the bank was in fact to be. the preferred lienholder.. It is certainly contrary to reason and all presumptions to presume that Mr. RoAvland would write this letter unless he stated the true facts. Nothing is shown in the record to suggest that he would in any manner profit by such a transaction. It certainly would brand him as false to his.trust and unworthy of the confidence of men if the agreement, as understood by a large number of persons was contrary to what the letter indicated. The law does not presume fraud. It must be shown with reasonable certainty. Mr. Rowland was the cashier of the People’s Bank, in sole charge of its-affairs at the time, and we think that this letter is in legal effect the letter of the People’s Bank. The bank was vitally interested in the matter. It had a deed of trust involved and had, through Mr. Rowland, agreed to prepare all the papers in the whole transaction and had done so. There is nothing to show any reason why Mr. Rowland would perpetrate a fraud against the Jenkinses and against the bank in favor of1 Pennington. His duty was to represent the bank, and there is nothing out
Upon the proposition as to when the papers were to become due the testimony for the appellant and the appellees is more evenly balanced.
As to whether or not the papers were to be due under the agreement in 1921 or 1926, and whether the testimony was sufficient for the chancellor to find that they were due in 1926, the court is evenly divided. Inasmuch as the chancellor found as a fact that the deed of trust was fraudulently altered by Pennington, and we hold that the evidence was wholly insufficient to so show, we do not know whether the chancellor would have found upon this question of fact whether the deed of trust matured in 1926 or in 1921. Possibly his judgment in finding the facts was influenced by his finding as to the priority and as to the agreement, because if as a fact the papers had been fraudulently altered by Pennington after their execution, the cross-bill would have to be dismissed. The majority of the court thinks that there is no evidence to show that Pennington had anything to do Avith any change of the papers, if there was a change in fact, and that being true, if the change was made by Mr. Bowland after the execution of the papers by the Jenkinses, it would be a spoliation, and Pennington Avould retain his rights under the original instruments.
In view of what we have said, we think the cause should be reversed and remanded.
Reversed and remanded.
Dissenting Opinion
(dissenting).
In my opinion the decree of the lower court should be affirmed. As I view the testimony the question really presented was a controverted question of fact decided by the chancellor in favor of the appellee.
The appellant, Pennington, is a son-in-law of appellees, H. B. and Elizabeth Jenkins. The land in controversy originally belonged to the Jenkinses. For some reason they conveyed it to Pennington. Subsequently a controversy terminating in a lawsuit arose between these parties as to the ownership of the land. This was settled by an agreed decree vesting title in Pennington. It seems that as a part of the settlement it was agreed among the parties that Pennington should convey the lands to the Jenkinses for a consideration of forty-five thousand dollars. Because of the lawsuit the Jenkinses had become indebted to their attorneys and for expenses incident to the suit for about twenty thousand dollars. In carrying out this settlement the land was conveyed to the attorneys temporarily. All parties to this controversy held a conference the night before the deeds of trust here in question were prepared. At these conferences which took place in the office of one of these attorneys and also in the bank, all parties now before the court were present. The bank was present through its cashier, Mr. Rowland, the senior Jenkins, and his two sons were present, Pennington was present, and the attorneys. In these conferences the question of this settlement and the execution of the three deeds of trust and notes were all discussed and agreed upon. The testimony of the Jenkinses is to the effect that it was then agreed and understood that the bank was to have a first deed of trust to secure its loan of twenty thousand dollars to Jenkins, that the Jenkins boys were to have the second deed of trust on this property to protect them in case they were’called upon to pay the bank, and that Pennington was to have the third deed of trust for the forty-five thousand dollars due him. A majority of my brethren think the testimony is
As to why Pennington was willing to agree to his deed of trust coming third instead of first, we are not concerned. It may be that he was anxious to get a family quarrel adjusted. It may be, and perhaps is true, that at the time this agreement was made all parties thought the land of the two old Jenkins people worth much more than the combined amounts of the deeds of trust being given thereon. However, there is no question but that Pennington had the right to make this agreement and accept a third deed of trust. ,And the testimony, in my judgment, sustains the finding of fact of the chancellor that he in fact did so agree. In this conference Mr. Rowland, the cashier of the bank, stated that he would have the three deeds of trust drawn and properly executed in accordance with the above agreement. . The next day these papers were so drawn by an attorney. The Pennington note and deed of trust were drawn to mature in 1926, as the testimony for the appellee states the agreement was. Rowland then took the papers to the tivo elder Jenkinses and told them in substance they were drawn in accordance with this agreement; that the bank held a first mortgage, and Pennington a third; that Pennington’s debt did not mature for five or six years. Relying upon this statement of Rowland, the two elder Jenkinses executed the papers. They were also at a later period in the bank executed by the Jenkins boys, who at that time also believed they carried out the agreement made by all parties.
The fact that Pennington’s deed of trust was first, recorded is in no way binding upon any of the parties to this controversy. The statutes relating to priority of recordation protect innocent purchasers or incumbrancers for
Mr. Rowland, the cashier of the bank, was the agent of the bank when he had drawn the note and deed of trust due the bank by the Jenkinses. He was not the agent of the bank, and the bank is in no wise bound by his action, in having prepared and executed the note and deed of trust of the Jenkinses to Pennington. It was no part of his duties, nor within the real or apparent scope of his employment, to have executed deeds of trust Avholly betAveen third parties. His act, therefore, in having drawn the Jenkins-Pennington deed of trust, could in no wise bind the bank. If he anted for any one in this matter, under this testimony, it was for Pennington and not the bank. I think there Avas ample testimony from which the chancellor Avas justified in findifig that the maturity of the Pennington note and deed of trust was altered after execution, the due date in both instruments being changed from 1926 to 1921. The burden of proof rested upon Pennington to show that the change was made before execution, and this he failed to do. The papers were in the possession of Rowland. If the change was made by RoAvland it would not be binding upon the bank, nor upon any party to this controversy if made without his knowledge or consent, but would be really a spoliation. The letter written by Rowland to Pennington in my opinion is in no wise an admission by the agent of the bank, but is merely written in his personal capacity about a matter that the bank was really not interested in; that is to say, the deed of trust of the Jenkinses to Pennington. The bank, however, of course Avas interested in the priority of this deed of trust. This priority, however, could not have been changed by Rowland in violation of the agreement of all these parties. Even, however, if this admission as to priority be considered an admission of interest against the bank, the four
As I understand the opinion of the majority, however, it is merely to the effect that the testimony is insufficient to sustain the decree and the cause is reversed and remanded generally. This being true, I refraim from going in detail' into all the testimony.
From these views it follows th¿t F think the testimony sufficient to sustain the finding of the chancellor that the hank’s deed of trust was first, that of the Jenkins boys second, and further that Pennington, holds a valid third deed of trust on this property, the debt maturing in- 1926', as evidenced by the papers before the spoliation.