Allen v. Thompson, 42757

• Decision Date: 09 December 1963
• Docket Number: No. 42757,42757
• Citation: 158 So.2d 503,248 Miss. 544
• Parties: Lawrence ALLEN v. W. J. THOMPSON et al.
• Court: Mississippi Supreme Court

Page 503

158 So.2d 503

248 Miss. 544

Lawrence ALLEN v. W. J. THOMPSON et al.

No. 42757.

Supreme Court of Mississippi.

Dec. 9, 1963.

Satterfield, Shell, Williams & Buford, Jackson, for appellant.

James L. Spencer, Lee, Moore & Countiss, Creekmore & Beacham, Watkins & Eager, Wells, Thomas & Wells, Jackson, for appellees.

McELROY, Justice.

The direct appeal was brought by Lawrence Allen, appellant, complainant below, from adverse decrees entered by the Chancery Court of the First Judicial District of Hinds County, Mississippi. A cross-appeal was made by Lands, Inc. and seeks a reversal of the decree of the chancellor dismissing their cross-bill.

Appellant filed his bill of complaint on March 28, 1962 seeking an alleged equitable claim or right to certain realty against the following parties:

(1) W. J. Thompson, with whom appellant contracted for the sale of land on September 28, 1959, Thompson Investment Company, and Mrs. L. M. Thompson, charging that W. J. Thompson is the party primarily responsible for the confusion and conflicting claims as to rights in the lands in question, that he has been guilty of fraud, trickery, deceit, guile, ruse, and overreaching of complainant in particular and to varying extent has deceived and misled other parties or some of them who are defendants herein; to modify or set aside certain transaction whereby he had been misled in signing of certain contracts and a deed on his Hinds County property and consequently suffering a loss of some $50,000 to $100,000;

(2) Lands, Inc., called Lands, the owner of the property since November 17, 1959 under a warranty deed from Thompson and Allen;

(3) Honorable L. Lamar Beacham, attorney for Lands and Business Development Corporation;

(4) Business Development Corporation, the original holder of a deed of trust securing $60,000 upon the realty involved;

(5) L. N. Muse and Kenneth Muse, called the Muses, charging a joint venture between Thompson and the Muses and charging that the Muses knew and were on notice that Thompson Investment Company did not own the land and that they had particular notice that the consideration had not been paid to appellant. * * * Because of the knowledge of the failure of consideration due complainant chargeable to said joint venture parties, imputed knowledge of the fraud, Lands, Inc. and Business Development, Inc. are without standing to make any claim against the lands beyond the amount of which complainant has actually received from or through W. J. Thompson, and charging by amendment that Lands, Inc. never came into existence either de jure or de facto as a corporation;

(6) Confederate State Savings and Loan Association of Corinth, the present holder of a second deed of trust in favor of Thompson and Allen, securing $110,000 upon the land;

(7) Merchant and Manufacturers Bank of Ellisville, who now hold the assignment of the first deed of trust, charging as to the Confederate State by amendment that the note of $110,000 was never knowingly endorsed by the complainant, that is, Allen, and was without any consideration and on the face of it showing circumstances putting any subsequent purchaser on notice; and

(8) United Developers, Inc., holder of a contract to purchase from Lands, dated May 18, 1961, charging that its claim should be cancelled or that the balance due to Lands under its contract should be paid in the court for the benefit of appellant's claimed lien.

The questions for the court to decide are: First, was there fraud, trickery, deceit, guile, ruse, and overreaching of the complainant? Second, was Lands, Inc. duly incorporated under the statutes of Mississippi as a de jure corporation or a de facto corporation? Third, were certain defendants here bona fide purchasers for value without notice if there was fraud?

Allen's charges of fraud were denied by Lands, Beacham, Business Development Corporation, the Muses, and the other defendants. The appellees allege affirmatively among other things that Allen had come into equity without clean hands and that he was barred by estoppel. Confederate States and the bank allege further that they stood as bona fide purchasers for value without notice.

At conclusion of of appellant's evidence, the chancellor sustained the motion of these appellees to exclude and dismiss, finding that the proof offered was insufficient to establish fraud on the part of Lands, Inc., Business Development Corporation, Lamar Beacham, Confederate States Savings and Loan Association, Kenneth Muse and L. N. Muse, United Developers, Inc., Mrs. L. M. Thompson and the Merchant and Manufacturers Bank of Ellisville, Mississippi.

At conclusion of the full trial, the chancellor found that no fiduciary or confidential relationship with Thompson was proved, and that no specific acts of fraud or deceit or overreaching of the appellant by Thompson were proved.

During the course of the trial, Thompson, introduced numerous carbon copy receipts and cancelled checks showing that he was ahead in his payment of the unsecured note given to the appellant by appellee Thompson Investment Company, and the trial court so found.

The proof showed that the appellant had completed only the sixth grade. However, he was a Trustee in his local church, and demonstrated sharp business acumen. The chancellor's first impression was that the appellant was an ignorant colored man, and that he was somewhat confused over the complex dealings mentioned in the pleading. A reading of the cross examination discloses that the appellant was not ignorant, was very bright, and was confused only when he desired to be confused. Upon matters which he knew to sustain the theory of his case he showed unusual judgment, memory and ability. It was only in those instances where he was hesitant in identifying his own signature that he seemed confused.

The evidence revealed that Allen, as of September 10, 1959, was the owner of 43.10 acres, more or less, in Hinds County, Mississippi involved in the controversy. He began to deal with Thompson, the party he has consistently insisted is primarily responsible for the sale of the property, contending that Thompson's profit was in excess of $2,500 per acre. Allen made a number of varying contracts with Thompson. On September 10, 1959 he executed a warranty deed without a revenue stamp to Thompson Investment Company. This deed was found to be without revenue stamps when the attorneys were examining the records, and they contended, therefore, that the deed was bad. Thompson had other dealings around September 17 or 18.

At the trial Thompson was asked how the deed had come about. He replied that at the time he and Allen were negotiating the sale. Allen came to him and stated that the deal had to be closed that day, that the property had to be gotten out of his name, because he was being threatened with a suit on charges of bastardy.

Further negotiations were finalized by contract of September 28, 1959 providing for the purchase price of $82,500, $37,500 of which was to be paid by transfer of a 50-acre tract of land in Madison County, Mississippi, and the balance of which, plus interest, was to be paid in cash on or before five years.

The contract is in part as follows:

'(2). PRICE: The purchase price of the property is Eighty-two Thousand Five Hundred and No/100 ($82,500.00) Dollars, payable as follows, to-wit:

'(a) The owner, Lawrence Allen, agrees to accept as part payment of the above $82,500.00 a 50 acre tract of land located North of Ridgeland, Mississippi in Madison County and the Purchaser, Thompson Investment Company, a Mississippi Corporation, do hereby agree to sell, warrant and convey that certain 50 acre tract of land located North of Ridgeland, Mississippi in Madison County as part payment of the above $82,500.00.

'(b) Now, therefore, in consideration of $37,500.00 as trade-in allowance and further consideration of conveyance of the above mentioned 50 acres tract by Thompson Investment Company to Lawrence Allen. It is expressly agreed and understood by both parties that the above 50 acre tract will be conveyed, subject to no liens or incompetence. * * *

'(c) The balance of the purchase price is payable as follows:

'On or before five (5) years from date of conveyance, with interest at the rate of 6% per annum after maturity.

'(5) It is further agreed and understood by both parties that upon consumation of this transaction and the proper conveyance to each party of the above described land and property that Thompson Investment Company will execute and deliver to Lawrence Allen one unsecured promissory note in the amount of $45,000.00 for the remaining balance owed him on the property he is conveying. Said note is to be payable as stipulated above on or before five years from the date of execution and is to bear interest at the rate of 6% per annum after maturity. * * *

'It is further agreed and understood by the parties, hereto, that Lawrence Allen have the right to remove from the property that he is conveying, the tenant houses and house that he is presently living in, at his own expense, providing that said houses are removed from the premises on or before six months from the date of conveyance. * * *

'(7) DEPOSIT: The Buyer, Thompson Investment Company, has deposited with Lawrence Allen $500.00 as earnest money. If the title is merchantable, this deposit is to apply to the cash payment and is to be deducted from the $45,000.00 balance, if the Buyer consummates the contract; if the title is not merchantable the Seller is to cure any defects thereof at his own expense unless released by Buyer at his option, in which case the earnest money deposit is to be returned to the Buyer.'

On November 17, 1959 Lawrence Allen and Thompson Investment Company gave a warranty deed to Lands, Inc. in which they received $30,766 as paid and a note for $110,000. The deed was duly acknowledged and put of record. The notes were signed by Lawrence Allen as well as receipts...