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cover the sum of $252, alleged to be due for money received by the latter which be longed to the former. It is alleged in the complaint that the plaintiff, Pope, had a claim against certain railroads for rebate of excessive charges for transportation of freight; that the claim against the railroads was filed in the name of Pope & Reese, a partnership, composed of the plaintiff and defendant, with the master in chancery appointed by the United States circuit court, and that Reese collected the amount and appropriated it to his own use, notwithstanding the fact that the funds really belonged to Pope. The answer contained a denial of the allegations of the complaint concerning the ownership of the funds, and thus presented the only issue in the case. The cause was tried before a jury in the circuit court, and the verdict was in defendant's favor.

i

The issue was submitted to the jury on instructions conceded to be correct, but counsel for plaintiff insist that there was no evidence to support the verdict. In other words, it is contended that plaintiff is entitled to recover under the undisputed evidence, and we have reached the conclusion that the contention is correct. There was no real dispute upon the material facts of the case.

Pope had operated a feed store in Nashville for many years prior to October 1, 1912, under the trade-name of Pope Feed Store, and had paid freight bills, which formed the basis of the claim against the railroad companies for repayment of the of the excess excess charges. The plaintiff and defendant entered into a copartnership on October 1, 1912, for the operation of a certain line of business at Nashville, Ark., under the firm name of Pope & Reese, but the firm did

The undisputed evidence shows, we think, that the claims were the property of the plaintiff, Pope, and did not fall to Reese in the dissolution of the firm of Pope & Reese. There was an agreed statement of facts filed in the cause, which set forth the respective amounts and serial numbers of the claims, and this statement contains an admission that the bills of lading, forming the basis of two of the claims aggregating the sum of $248.23, had been found, and that they were bills of lading issued to Pope Feed Store, and that the other bills of lading could not be found. B. E. Slaughter, the general manager of the traffic association which handled these claims, testified that all of the bills of lading antedated the time when the copartnership between Pope and Reese was entered into, and that he could identify enough of the claims based on those bills of lading aggregating the sum of $252. The defendant did not introduce any evidence tending to show that the claims really belonged to the firm of Pope & Reese. The testimony introduced by the defendant merely established his right to collect any funds belonging to the old firm. The testimony did not tend to contradict the plaintiff's case as made out by the agreed statement of facts and the testimony of Slaughter. Reese testified that he collected the amount of the claims in scrip for future transportation charges, and that he sold the scrip at par value and paid out the sum of $78 as commissions on the collection.

The undisputed evidence shows that Reese collected 50 per centum of the claims aggregating $659.45 and paid commissions in the sum of $78 which leaves a net amount of $251.73, which he collected, belonging to Pope. Pope. The plaintiff is entitled to recover that sum, with interest from the date of the commencement of this suit and judgment will be entered here accordingly in favor of plaintiff.

(134 Ark. 190)

BERARD v. FITZPATRICK et al. (No. 379.) (Supreme Court of Arkansas. May 20, 1918.) 1. MORTGAGES 38(2)-OPTION CONTRACTPURPOSE-EVIDENCE.

not succeed to the business or claims of the Pope Feed Store. The claims for rebate of the excess charges arose under a decree of the Circuit Court of the United States in case pending therein, where the railroad sought to restrain the enforce ment of certain freight rates imposed by the Railroad Commission. There was a compromise decree, whereby 50 per centum was In an action for specific performance of an to be paid on the claims. These particular option contract for the sale of realty, which defendant claims was given only as additional claims were handled by a traffic association security, defendant admitting that he knew of in the city of New Orleans, La., and for the nature of the option when he signed it, tesconvenience they were filed in the name of timony to support defendant's claim must be Pope & Reese. During the pendency of the clear and convincing, though it need not be unmatter the firm of Pope & Reese was dis- 2. MORTGAGES 5-NATURE OF INSTRUMENT. solved, and under the dissolution contract Such option, if it was not to be effective unReese assumed the liabilities of the firm less defendant defaulted in the payment of his and took the assets, with authority to col- in the event of default, was a mortgage, as an loan, and was to save the expense of foreclosure lect all the claims due the firm. Pursuant instrument executed to secure the payment of to this authority he collected the claims money is in fact a mortgage, whatever its form against the railroads pending before the masmay be. [Ed. Note.-For other definitions, see Words ter in chancery, and this suit is to recover and Phrases, First and Second Series, Mortthe amount so collected. gage.]

contradicted.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

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Suit by L. E. Berard against L. A. Fitzpatrick, Jr., and others, to enforce specific performance of an option contract for the sale of realty. Decree for defendants, and plaintiff appeals. Affirmed.

Appeal from Phillips Chancery Court; Ed-1 transaction between the parties. The option ward D. Robertson, Chancellor. contract recited that for the consideration of $9,500, of which $10 was cash in hand paid, an option to purchase the land described was given until January 1, 1917. Of the sum recited $5,000 was to be paid by assuming the mortgage to the loan company and the balance was to be paid upon exercising the option.

Moore & Vineyard, J. G. Burke, and Fink & Dinning, all of Helena, for appellant. R. J. Williams, of Forrest City, for appellees.

SMITH, J. This action was brought by the appellant for the purpose of enforcing the specific performance of a certain option contract entered into between the appellant and appellee for the sale of certain real estate in Phillips county. The lands described in the complaint were advertised to be sold on January 21, 1916, in satisfaction of a mortgage thereon in favor of a Mrs. Stone. For the purpose of preventing this sale appellee applied to O. R. Lilly, the agent of the Equitable Security Company, for a loan for the purpose of discharging the indebtedness to Mrs. Stone. It was arranged that a loan of $5,000 would be made by the loan company, provided same should be secured by a first lien on the land in question. It was ascertained that the sum of $5,000 would not satisfy the principal and interest due Mrs. Stone, and the loan company refused to lend any larger amount. Appellee then applied to appellant for a loan of $500, and agreed to execute a second deed of trust upon the same land for the purpose of securing the payment of that amount.

Appellant testified that he declined to consider the matter, for the reason that he did not care to have any business transactions with appellee; that appellee made several efforts to secure the money from other Sources, but was unable to do so, and it was finally agreed that appellant and J. C. Meyers and A. G. Burke would lend appellee the sum of $500 on condition that appellee give them an option contract for the purchase of the property. It was later found that the sum of $500 was not sufficient to discharge the old indebtedness, and the amount was finally fixed at $750, for which amount appellee executed his note and deed of trust to appellant and Meyers and Burke. From funds arising from these two deeds of trust the indebtedness to Mrs. Stone was discharged and the foreclosure proceedings abated. Appellee executed and delivered to appellant the option contract, and also executed a warranty deed, and placed same with the Security Bank & Trust Company, of Helena. So far the facts are undisputed; but there after the testimony is sharply conflicting.

The principal and controlling question of fact in the case is: For what purpose were the option contract and deed executed? Appellant testified that these instruments were what they purported to be, and that their exe

In appellant's behalf there was testimony to the effect that the payees in the $750 note were not in the, business of lending money, but, on the contrary, borrowed the money which they loaned to appellee. The testimony of appellant supported the allegations of his complaint. Other testimony in his behalf may be summarized as follows:

Solomon, the cashier of the bank in which the deed and option contract had been deposited, testified that the sum named in the option contract had been tendered appellee before the expiration of the option. R. B. Campbell testified that in the fall of 1915, or the early part of 1916, appellee listed the lands with him for sale at $9,600, which was a fair value of the land at that time, but that he could not sell the land for a sufficient sum to net appellee the price fixed. J. C. Meyers testified that he was one of the owners of the abstract company which had made the abstract for appellee, and that appellee's application for the additional loan was turned down by his company, and that appellant refused to entertain the application unless the option contract was given, but that he

was not present when the contract between appellant and appellee was finally consummated. Upon being recalled, he testified that appellee said he was willing to give an option to sell at the price the land was worth, but that he did not want the land sold under foreclosure, for the reason that it would not bring its value if sold in that manner.

O. R. Lilly testified: That he was engaged in the real estate business and in making farm loans, and that appellee had listed the land with him for sale, but that he had been unable to sell it in January, 1916, while it was so listed, for $9,000. Lands had since that date increased 25 per cent. in value. That in applying to appellant for the additional loan he was acting as the agent of appellee, and was interested in negotiating it, for the reason that he would otherwise lose his commission on the loan which the loan company had agreed to make. That the loan was not closed until the option contract was signed, and that he prepared a collateral agreement at the time, which provided that, if appellant elected to exercise his option prior to August 1, 1916, he should have the rents thereon. He admitted that he had a contract with appellant by which they were to divide equally any profits made by the exercise of the option and a resale of the land.

Lilly, while acting as the agent of the defendant Fitzpatrick, was interested in a pecuniary tract, and that his action in connection with way in the procurement of the option conthe execution of the same was against the interests of his principal, L. A. Fitzpatrick, Jr., and contrary to law."

substantially identical purport as follows: That the contract was usurious, because interest was contracted for at 10 per cent. for a longer time than the money was loaned. The court below made no finding, hówever, on this issue. That Lilly was appellee's agent, and it was not known that Lilly had A decree was entered in accordance with any interest in the option contract. That these findings, and this appeal has been duly Lilly had assured appellee that the addition-prosecuted.

al loan had been negotiated with appellants, [1] Appellee concedes that he knew the naand that when it was consummated the loan ture and character of the option contract from the loan company would also be con- when he signed it, and it is said, therefore, summated and the property saved from the that the testimony must be clear and conforeclosure sale, and that appellee relied vincing that appellant was not to have the upon this representation. That the land option to buy upon the terms and conditions was advertised for sale on January 21, 1916, there stated. It is conceded that this is the and on January 19, 1916, Lilly told him the law, but the majority do not think that it option contract was required as an addition- follows from that concession that the decree al security for the loan, and it was then below must be reversed. It is not required executed for that purpose. Appellee paid that the testimony be uncontradicted. James on the 19th the newspaper fee for advertis- et al. v. Furr et al., 126 Ark. 251, 190 S. W. ing the land and secured from the trustee 444. Indeed, in suits of this character the who had advertised the land an extension of testimony is quite frequently in sharp confive days in which to pay the debt for which flict; but the relief prayed for is not refused the land had been advertised. These witon that account, if, from the testimony as a nesses testified, further, that it was explain- whole, it clearly and certainly appears that ed to them that the option contract was the writing in question was not to have the required as additional security and to save effect which its terms ordinarily import. the expense of a foreclosure proceeding in the event the appellee did not pay the new debt when it matured, and these witnesses gave testimony of the most unequivocal character that the option contract was intended to be, and was in fact, only given by way of additional security.

The loan to appellee was paid at its maturity, and upon appellee's refusal to consent to the delivery of the deed to appellant this suit was brought to enforce the option contract. The payment by appellee was made about December 1, 1916, and appellant's election to exercise his alleged option

was made about December 15, 1916.

The court made the following findings of

fact:

"(1) The court finds that the option contract was intended only as an additional security to the loan of $750, and that the defendant, about the 1st day of December, 1916, after having paid the mortgage indebtedness, withdrew the option.

"(2) The court further finds that there was no consideration moving from the plaintiff to the defendant for said option, over and beyond a mere matter of security for the loan evidenced by the note for $750.

[2] There is no question here but that an option was given appellant to buy the land. But the question is whether this option was absolute and unconditional, or was given as additional security for the loan of money made, and to be effective upon default made in the repayment of this money. Appellee and his father testified that it was explained to them by Lilly, who admitted having a half interest in the prospective profits of this option, that the option contract sure in the event of default. If this testimowas desired to save the expense of foreclony is accepted as true, then clearly the inwell settled by numerous decisions of this strument is a mortgage; for it is thoroughly

court that an instrument executed for the purpose of securing the payment of money is in fact a mortgage, whatever its form may be.

It therefore follows that, if this option was not to be effective unless appellee defaulted in the payment of his loan, the finding of the court below should be affirmed; and, as the majority so interpret the testi

"(3) The court further finds that O. R. mony, it will be so ordered.

203 S.W.-66

(134 Ark. 161)

PETERS v. PRIEST et al. (No. 355.) (Supreme Court of Arkansas. May 13, 1918.) 1. DEEDS 38(2) - DESCRIPTION - INSUFFI

CIENCY.

lant instituted this action in the chancery court to establish her title under the lost deed. The action is against the widow and the other children of Benjamin A. Priest. Some of the children are still minors, and they, acting through their guardian, and also the widow, have appeared and made defense, denying all the allegations with respect to the title to the land and the convey8-VOL-ance from Elizabeth Priest to appellant. The

A deed describing the land imperfectly and insufficiently as "the southeast 1/4 of the southwest 2 of section 32, township 12, range 6 west, containing forty acres more or less," was void on its face.

2. REFORMATION OF INSTRUMENTS

UNTARY DEED-LACK OF DELIVERY.

Where a deed was a voluntary gift, and there was no delivery made of the possession of the land during the grantor's lifetime, followed by valuable improvements by or for the grantee, a court of equity will not reform it so as correctly to describe the land.

cause was heard on the depositions of witnesses and other proof, and a final decree was rendered dismissing appellant's complaint for want of equity.

Appellant was born in the year 1870, and the deed in question was executed by Elizabeth Priest in 1872, when appellant was about two years of age. Elizabeth Priest occupied the 40 acres in controversy until she died in the year 1885, and immediately thereafter Benjamin A. Priest took possession of the land and resided upon it until his death, which occurred July 1, 1915. No witness testified to the execution of the

3. LOST INSTRUMENTS 8(1) CORRECTNESS OF DESCRIPTION-PRESUMPTION. Where a great-aunt executed a deed to her niece, and delivered it to the latter's father, who took possession of the land after the aunt's death, and before his death handed the deed to a son to deliver to the grantee, who lost it, it being in an old, worn, discolored condition, with the figures in the description almost obliterated, it will be presumed that the description contained a figure 4, instead of a 2, thus correctly describing the land. 1. EVIDENCE 230(2, 3)—DECLARATIONS DIS-deed, or the circumstances attending the same, but appellant introduced testimony to Declarations of a grantor or former owner the effect that the deed was found among of land in disparagement of his title, made after the papers of Benjamin A. Priest a few he has parted with title, are not competent against subsequent holders, though declarations made before such time are admissible. 5. LIMITATION OF ACTIONS 104(3)-STATUTE OF LIMITATIONS-DISCOVERY OF DEED.

PARAGING TITLE.

The statute of limitations did not begin to run against the grantee in a deed delivered to her father for her by her great-aunt until she discovered its existence; it appearing that the deed's existence was intentionally withheld from her knowledge by her father, under whom the land is being held.

weeks before he died. This testimony comes from appellant's brother, who testified that a few weeks before the death of his father, and during the latter's last illness, he was at his father's house and assisted in searching for certain papers, and in doing so opened an old trunk and found a deed in what he described as a "dilapidated" condition, in the bottom of the trunk. He says that his father

Appeal from Drew Chancery Court; Z. T. told him that it was the deed which his Wood, Chancellor.

Action by Jessie L. Peters against Sarah O. Priest and others. From a decree dismissing the complaint, plaintiff appeals. Decree reversed and cause remanded, with directions to enter decree for plaintiff according to the prayer of the complaint.

Hogue & Heard, of Little Rock, for appelWilliamson & Williamson, of Monticello, for appellees.

lant.

aunt Elizabeth had made to Jessie (appellant), and he instructed his son that after his death to deliver it to appellant. The witness stated that his father explained that the reason he had not given the deed to appellant was that there had been some trouble between them. Witness testified that

The

his father said: "This is the one that Aunt Lizzie gave Jessie. I have not got but a few days to live. After I am buried somebody can send it to her or you can give it to her." McCULLOCH, C. J. Appellant asserts Witness stated that he admonished his fatitle in this action to a tract of land contain- ther that delivery of the deed would cause ing 40 acres, situated in Drew county, Ark., trouble, and that his father replied, "Well, and described as the southeast quarter of let it cause trouble," adding, in substance, the southwest quarter of section 32, in town- that he did not care, as he would not "be ship 12 south, range 6 west. She claims here to worry any longer with it." that the land in controversy was originally witness further stated that his father told owned by her great-aunt, Elizabeth Priest, him that he had never owned the land and who in the year 1872 executed a deed convey- that his Aunt Lizzie had bought it from J. ing the land to her and delivered the deed to J. Bordeau. Witness stated that shortly her father, Benjamin A. Priest, but that her after his father died he mailed the deed to father kept the deed without recording it, appellant. The proof shows that as soon as and that she did not know of its existence appellant received the deed by mail at Hot until after her father's death in the year Springs, where she was living, she mailed 1915. It was alleged in the complaint that it to another brother, Sam H. Priest, at the original deed had been lost, and appel- Monticello, to be recorded, and that it was

returned to her by mail after being recorded, description almost obliterated so as to render and that she lost it. She explained in detail how she happened to lose the deed.

A certified transcript of the record of the deed introduced in evidence shows the lands to be described therein as follows:

"The southeast 14 of the southwest 12 of Sec. 32, township 12, range 6 west, containing forty acres, more or less."

[1, 2] The above description is an imperfect one, and is insufficient as a description of the land in controversy. Therefore the deed is void on its face. The deed is a voluntary gift, and as there was no delivery made of the possession of the property during the lifetime of the grantor, followed by valuable improvements by or for the grantee, a court of equity will not reform it so as to correctly describe the land. Smith v. Smith, 80 Ark. 458, 97 S. W. 439, 10 Ann. Cas. 522.

them vague and uncertain, in the possession of the party to whom it was delivered as a conveyance of a certain tract of land, and if the figure in the conveyance be read as the figure 4, which the witness says could be done, would correctly describe this land. Under those circumstances the presumption ought to be indulged, in the absence of proof to the contrary, that Benjamin A. Priest, the man who received the deed into his possession when it was freshly written, and at a time when there could be no mistake as to its contents, and treated it as a deed to the land in controversy, and in anticipation of his death handed it to his son for delivery to the grantee as a conveyance of the property in controversy, knew that it correctly described this land, and his statements to his son when he handed over the deed constituted an admission that this was the land described in the deed. The uncertainty arising from the partial obliteration of the figures so as to make it difficult to determine whether the figure used was the figure 2 or the figure 4 ought to raise the presumption, under the circumstances, that the land was correctly described in the deed, and the recognition by Benjamin A. Priest of the deed as a conveyance of the land in controversy affords strong evidence that the description was originally correct. It was the only land owned by the grantor, and it was the land which Benjamin A. Priest took possession of under the deed immediately after the death of the grantor, and the natural inference is that this land was the tract conveyed, and that the deed before it became worn properly described this land.

[3] It is insisted, however, on behalf of appellant, that the fact is established by the proof that the original deed described the land correctly, and that there is a mistake in the record in using the figure 2 instead of 4 in describing the southwest quarter of the section. We are of the opinion that the proof is sufficient to meet every requirement in establishing the words of description used in the lost deed, and that according to the proof the land was correctly described, but that a mistake was made in recording the deed. The 40 acres of land in question was, according to the proof, the only tract of land owned by Elizabeth Priest, and it is clear from the testimony that the deed was delivered to Benjamin A. Priest and accepted by him as a conveyance of this particular land to his daughter, Jessie, who is the appellant in this case. Benjamin A. Priest accepted the deed, and, without recording it, kept it in his possession 43 years. He treated the deed as properly describing the land in controversy, and a short time before his death he handed it to his son for delivery to appellant, his daughter, after his death as a conveyance of this particular land. John R. Priest, the son to whom Benjamin A. Priest handed the S. W. 173. deed to deliver to appellant, said that it was old and discolored and in a dilapidated condition, and the other son, Samuel H. Priest, to whom appellant sent the deed to be recorded, testified that the deed was old and worn, and that the figures in the description were on a crease in the fold of the paper so that the paper was worn at that place to such an extent that it was impossible to determine definitely whether or not one of the figures was a 2 or a 4. He testified that it appeared to him to be the figure 4, but that it might have been a 2.

We have, therefore, a case where an old, worn, discolored deed, with the figures in the

[4] The rule established by decisions of this court is that declarations of a grantor or former owner of land in disparagement of his title, made after he has parted with the title, are not competent against subsequent holders, but that such declarations made before that time are admissible. Richardson v. Taylor, 45 Ark. 472; King v. Slater, 96 Ark. 589, 133

[5] The statute of limitations did not begin to run against appellant until she discovered the existence of the deed, where it appears that its existence was intentionally withheld from her knowledge by the party under whom the land is now being held.

Our conclusion is that the testimony was sufficient to establish the conveyance of the land to appellant under a proper description, and that the chancellor erred in failing to render a decree in her favor.

The decree is therefore reversed and the cause remanded, with directions to enter a decree in appellant's favor according to the prayer of the complaint.

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