| Ark. | May 15, 1881
Smith filed his complaint in the Pulaski. ■Chancery Court, in which he alleged that on the thirtieth April, 1873, he lent to the Arkansas Insurance Company $3115, for which he took a note, secured by mortgage on the lot in controversy. The Insurance Company took title by purchase from Edward Fulton and wife, Wm. H. Fulton and wife,' and John Wassel and wife. The title came through Wassel, the other two deeds having been taken merely to satisfy all doubts. .Wassel got his title from Wm. H. Fulton and Lavinia C., his wife, Mrs. Fulton having been the owner of the land. On the fifteenth November, 1865, Mrs. Fulton had executed a mortgage on the lot to Edward Fulton.
It- is charged this was done under misrepresentations of' her husband, and that it was never properly acknowledged' by her.
On the twenty-sixth August, 1869, a bill was filed in the name of Edward Fulton, to foreclose that mortgage, under-which a decree of foreclosure was rendered, and on May-second, 1870, the lot was sold, and bought in the name of' Edward Fulton, though without his knowledge.
In this suit, it is further alleged, there was no valid service on Mrs. Fulton. After this W. H. Fulton, who held a power of attorney from Edward Fulton, his brother, fraudulently, and in violation of his authority, made three notesy secured by deeds of trust on.the lots as follows :
First note — to White & Dillon, July eighteenth, 1870,-afterwards assigned to thé Arkansas Insurance Company,, the deed of trust being made to M. W. Benjamin.
Second note — to Merchants’ National Bank; deed of’ trust to John W'. Smith, trustee, January thirtieth, 1871.
Third note — for $1500, April twentieth, 1870, to the-State Insurance Company, of Hannibal, Missouri, JainesF. Fagan, trustee.
These notes were for individual debts of W. H. Fulton..
Benjamin, as trustee, having advertised the lot for sale, Mrs. Fulton filed ber complaint against her husband,' Benjamin, Smith, Fagan, as trustees., and Edward Fulton, to enjoin the execution of the trusts, and a preliminary injunction was issued. In that complaint she alleged, substantially, that she executed the mortgage to Edward Fulton by reason of deceit and misrepresentation on the part of her husband; that it had never been legally acknowledged' by her; that she had never been served with process in the foreclosure suit; and, in fact, never heard of it until she saw her property advertised by Benjamin for sale, under* his deed of trust.
Smith further alleged that the injunction suit of Mrs. Fulton was finally settled and compromised as follows :
The suit was to be dismissed; the deed of trust to the Merchants’ National Bank was to be paid ; the Arkansas Insurance Company was to assume the debt due to the State Insurance Company, and the deed of trust to the latter company was to be cancelled.
This agreement was made by all parties in interest, James F. Fagan, its agent, acting for the State Insurance Company. Inasmuch as Fulton was largely indebted to the Arkansas Insurance Company, it was also agreed that a. clear title to the lot in controversy, and other valuable property, was to be made to that company.
The suit was then dismissed, the order showing that the suit had been compromised and settled between the various parties.
That order was entered March second, 1872. Nevertheless, Fagan, as trustee for the State Insurance Company, had advertised the lot for sale, under the deed of trust, at the instance of Shields, who had become the owner of the note. Both companies had become insolvent. Prayer for injunction, and that the deed of trust to Fagan be cancelled. Shields filed his answer and cross-bill, denying the alleged agreement to release the State Insurance Company’s deed of trust, and the authority of Fagan to make any such contract so as to bind the company.
The cross-bill alleged that Fagan had removed from Pulaski county, and prayed for the appointment of another trustee.
To this answer certain interrogatories to be propounded to Smith were attached, all of which he answered on final hearing.
The Chancellor made the injunction perpetual, and decreed a cancellation as prayed.
To reverse that judgment this appeal is prosecuted.
He does not prove his agency by such declaration; that appears otherwise. But in view of the facts that his relation of agent still existed, he being the person representing the interest of the foreign insurance company, in and about the deed of trust, we are of the opinion that his declarations, under such circumstances, were competent to show the agreement of the company to the proposed settlement.
Mrs. Fulton was raising the question of the validity of her acknowledgment of the mortgage to Edward Fulton, also of the decree of foreclosure. If she succeeded in those issues, then the deed of trust of the State Insurance Company would have been worthless. It is not at all singular that the Hannibal Company would accept the promise of payment by the Arkansas Insurance Company, then a solvent corporation, in lieu thereof; nor is it difficult to comprehend why the latter company would so assume it.
ffm. H. Fulton was indebted to it in a large sum of money. He and his wife owned this lot and other valuable property. If it could get a clear title, it could well afford to pay the $1,500 to the Missouri corporation. The whole matter seems simple enough, and the proof establishes the contract.
It is, however, urged that Smith had no equity in his bill, inasmuch as it was in the nature of a bill to remove a cloud upon the title, and he was simply mortgagee.
“The doctrine of estoppel is applied with respect to representations of a party to prevent their operating as á fraud upon one who has been led to rely upon them. They would have that effect if a party, who, by his statements as to matters of fact, or to his intended abandonment of existing rights, had designedly induced another to change his conduct or alter his condition in reliance upon them, could be permitted to deny the tnith of his statement, or enforce his rights against his declared intention of abandonment.”
There was a clear equity in this complaint, and the Chancellor properly made the injunction perpetual and decreed the cancellation of the deed of trust.
Let it be affirmed.