American Mortgage Company v. Williams

• Decision Date: 05 February 1912
• Citation: 145 S.W. 234,103 Ark. 484
• Parties: AMERICAN MORTGAGE COMPANY v. WILLIAMS
• Court: Arkansas Supreme Court

145 S.W. 234

103 Ark. 484

AMERICAN MORTGAGE COMPANY v. WILLIAMS

Supreme Court of Arkansas

February 5, 1912

[Copyrighted Material Omitted]

Appeal from Clay Chancery Court, Western District; Edward D Robertson, Chancellor; reversed.

STATEMENT BY THE COURT.

This is an action instituted by H. H. Williams, seeking to redeem from a sale certain lands which had been sold under a decree foreclosing a mortgage or to have specifically performed a contract reselling to him said lands. The original complaint was filed on July 1, 1905, and was brought against the American Mortgage Company and D. Hopson as defendants. In 1890 the plaintiff executed to said mortgage company his note for indebtedness due to it, and to secure same also executed a mortgage on certain lands in Clay County. This note was due five years after date, with interest. Upon the maturity of said note and default being made in the payment thereof, the mortgage company instituted a suit in the proper court to foreclose said mortgage. Decree of foreclosure was duly rendered therein, and the lands were sold thereunder to said mortgage company. Later these lands were conveyed back to said Williams, who, on March 25, 1896, executed his note to the mortgage company for $ 6,900, which represented the indebtedness due upon the original notes with interest, and other moneys advanced to him to that date. This note was due five years after date, with interest. On the same day, in order to secure the payment of the said note, he executed a deed of trust or mortgage upon the above and other lands. At the time of executing this last mortgage, a written contract was entered into by the parties whereby said Williams was authorized to sell said lands included in the mortgage paying all moneys received therefor and turning over all notes given by purchasers for any deferred payments to said Hopson as trustee, who, upon collection thereof, was to apply same on said note executed to the mortgage company. In that contract it was stipulated that, after payment of the indebtedness due by Williams to the mortgage company, all unpaid notes of said purchasers and moneys collected thereon should be turned back to the said Williams by the said trustee. In pursuance of that contract, certain lands were sold to various persons and notes taken for deferred payments. On September 20, 1901, the said note executed by said Williams to the mortgage company being past due and unpaid, a suit was instituted in the Clay Chancery Court to foreclose the mortgage on said lands securing same. This suit was returnable at the October term, 1901, of said chancery court. At that term of court it was agreed between the parties that a decree should be rendered in favor of the mortgage company for a recovery in the sum of $ 11,113.50 the amount then due upon said note, and foreclosing said mortgage. At the same time it was also agreed that the parties would enter into a written contract whereby, amongst other things, it should be provided that, in the event the mortgage company should purchase the lands at the foreclosure sale, it would authorize said Williams to make sales of said lands in its name, and that all payments therefor should be made by the purchasers directly to the mortgage company, and all notes for deferred payments should be made in the name of the said mortgage company, with the option given to the mortgage company to forfeit all the rights and privileges of Williams under the contract in event he failed or refused to comply with the instructions of the mortgage company. It was, however, further agreed that the authority given to Williams to assist in selling said lands did not waive the right of the mortgage company, either by itself or agent, to sell and dispose of any or all of said lands without the aid or consent of said Williams. It was further agreed and provided as follows:

"It is further understood and agreed that if, within two years from the date of the foreclosure sale, the said first party shall receive sufficient cash from the sale of said lands made by the said Williams or itself or other agents to satisfy its debt, interest, cost, taxes, commission and expenses in making such sales, that it will then convey to the said H. H. Williams by quitclaim deed any of the lands that shall not have been sold or remain undisposed of, and to surrender to the said Williams any unpaid notes given for the purchase money of any of the said lands; but, in case it shall not within such time receive such amount of money, then in that event no such conveyance or surrender of notes shall be made.

"It is further understood and agreed that the only compensation the said Williams shall receive for his efforts made in disposing of said land shall be the above conveyance mentioned and assignment of notes to him in the event the said first party shall receive its money as above stated in full with(in) the said two years. "

The written contract was thereafter drafted by either the mortgage company or its attorney, said Hopson, and then submitted to said Williams for his signature, who objected to signing same on account of the short time allowed in which the payment of the indebtedness should be made, but finally he executed it upon the assurance of the mortgage company, by letter, that if at the end of two years good progress had been made in the sale of said lands and the payment of said debt, longer time would be given. The negotiations occupied some time, and the said written contract, though dated in December, 1901, was not actually signed by Williams until some time in February, 1902. The decree of foreclosure was then entered of record by the clerk in vacation, and the lands were sold thereunder to the mortgage company in March, 1902, for $ 10,000. At the following March term of the Clay Chancery Court, on March 20, 1902, this sale was duly confirmed, and commissioner's deed therefor duly executed to the mortgage company. Under the above written contract, a great number of tracts of land were sold by said Williams from March 20, 1902, until March 20, 1904, Thereafter, during the summer and fall of 1904, said Williams continued to make sales of the said lands in pursuance of the terms of said written contract. It appears also that during the summer and fall of 1904 said mortgage company sold a number of tracts of said land to said Hopson. In December, 1904, said Williams asked for an accounting from the mortgage company, and claimed that he was ready and willing to pay any balance due to it upon said indebtedness from him, and demanded that, upon the satisfaction of such indebtedness, all unsold lands should be conveyed to him and all uncollected notes of purchasers should be turned over to him. Some correspondence took place between the parties relative to this demand, and finally the mortgage company refused the same, claiming that Williams's right to any reconveyance had terminated on March 20, 1904, inasmuch as the indebtedness to it had not been paid by that date, in accordance with said written contract. For some time a correspondence continued between the parties relative to their respective contentions, and finally in July, 1905, Williams instituted this suit. In his original complaint he asked for an accounting by the mortgage company, and that all moneys received by it from the sales of said lands should be credited upon said indebtedness. While said Hopson was made a party to the original complaint, Williams did not ask that any sales of land made to him should be set aside, or that he have any relief against said Hopson by way of redemption from such sales. On March 3, 1909, he filed an amended complaint, in which he alleged that Hopson had purchased from the mortgage company certain lands with knowledge of the plaintiff's rights therein, at a price below the actual value thereof, and that he had resold same to various persons at an advanced price. In this amended complaint he asked that Hopson be required to make an accounting of the lands bought and sold by him, and that, upon repayment to him of all moneys paid for said lands, the plaintiff be permitted to redeem the unsold lands which had been purchased by said Hopson.

A great mass of testimony was taken relative to these various issues and upon the hearing of the cause the chancellor found that Williams was entitled to redeem said lands from said mortgage company. He also found that Hopson was the agent of the parties at the time he made purchases of lands sold to him, and, by reason of this relation, such sales to him were voidable. He thereupon appointed a master to make and state an account between the said mortgage company and said Williams, and also of the lands which had been purchased and sold by said Hopson. The master filed a report in which he made a detailed statement of the indebtedness due by Williams to the mortgage company and also of the amounts for which the various tracts of land had been sold since the rendition of the decree in October, 1901. He found therefrom that the mortgage company was indebted to said Williams in the sum of $ 5,858.91. He also made a report showing the various lands which had been bought by said Hopson, the price paid therefor, and the sales thereof made by him. He found that Williams would be entitled to redeem the remaining lands sold to Hopson upon the payment to him of $ 3,200.53. Exceptions were filed by all the parties to the master's report. Some of these exceptions were sustained by the chancellor, who, upon final hearing, found that the mortgage company was indebted to Williams in the sum of $ 1,465.75 and that Williams was entitled to a conveyance from the mortgage company of all unsold lands. He further found that there was due to Hopson upon the lands bought by him under said...