Anderson v. Kimbrough

• Decision Date: 29 June 1999
• Docket Number: No. 97-CA-01169-COA.,97-CA-01169-COA.
• Citation: 741 So.2d 1041
• Parties: Ora Lean ANDERSON, Appellant, v. James Lee KIMBROUGH, Appellee.
• Court: Mississippi Court of Appeals

741 So.2d 1041

Ora Lean ANDERSON, Appellant, v. James Lee KIMBROUGH, Appellee.

No. 97-CA-01169-COA.

Court of Appeals of Mississippi.

June 29, 1999.

Jessie L. Evans, Canton, Attorney for Appellant.

Billy Joe Gilmore, Lexington, Attorney for Appellee.

EN BANC.

SOUTHWICK, P.J., for the Court:

¶ 1. The chancellor confirmed title in James Kimbrough to a one-acre tract and residence conveyed to him in 1993 by Ora Anderson. This was despite Kimbrough's concession that the deed had been executed solely to permit a loan to be acquired by Kimbrough on Anderson's behalf, that Anderson remained living on the land, and that the property was to be reconveyed to Anderson after she satisfied the debt. Settled case law provides that the deed should be considered a mortgage. Though the debt remains outstanding, Kimbrough was not entitled to the property without following foreclosure procedures. We reverse and remand for further proceedings.

FACTS

¶ 2. In 1993, Ora Anderson desired to remodel her house. At trial, she explained the plan that she used to secure the loan.

I went to the bank to make a loan to remodel. My brother was living at my mom's house, and I needed a place for my children. The bank instructed me that I did not have enough incoming income for them to present it before the Board to get me a loan value that I needed. But that he had instructed me that if I wanted to, I could find some family member to put it in their name and once they make the loan, the bank would allow them to roll it back over to me.

Her friend James Kimbrough agreed to obtain the loan after she agreed to deed the house and lot to him for collateral to be placed with the bank. Thereafter, Kimbrough received the deed, then obtained a loan on June 24, 1993, from Merchants and Farmers Bank in the sum of $10,000, payable in sixty monthly installments of $250.20, with the first payment commencing on August 10, 1993. The maturity date of this loan was July 10, 1998 and the total payments on this loan, which included insurance, would be $15,012.

¶ 3. Anderson and Kimbrough testified about the loan proceeds, though the stories diverge significantly. Anderson testified that after Kimbrough received the bank loan, he delivered to her only $6,000. Some time after receiving the $6,000 installment from Kimbrough, she received another $2,000 from him. Anderson testified that she never received the last $2,000 of the principal amount of the borrowed funds and that $8,000 was her total receipt. To the contrary, Kimbrough testified that he initially delivered $8,000 to Anderson. Although he could not establish the exact time, he testified that the last $2,000 was later delivered to Anderson.

¶ 4. Anderson made the first monthly $250 payment on the loan, Kimbrough the second, and Anderson the third. The fourth payment appears to have been made partly by Anderson's daughter and the remainder by Kimbrough. The fifth payment was made by Anderson. This was her last payment and was made late on January 5, 1994.

¶ 5. Though apparently not known by Anderson, Kimbrough returned to the bank on July 8, 1993, two weeks after the initial loan, and obtained an additional loan of $2,000. The same collateral of Anderson's house and lot were used. The payment on that second loan was due on demand on October 10, 1993. Kimbrough argues that this second loan was to allow him to make another $2,000 payment to Anderson. In his recounting, she received $8,000 initially, then shortly thereafter the remaining $2,000. "That wasn't enough. She wanted two thousand more, and I went and got a side loan for two thousand." Therefore, Kimbrough asserts that Anderson received a total of $12,000. The chancellor found that she had received a total of $10,000.

¶ 6. Anderson asked Kimbrough in January 1994 to seek an extension from the bank on the payments because she had to help her daughter with college finances. She testified that he told her the bank said it was "okay." On that basis Anderson did not make the January and February payments. Anderson alleged that in March 1994, she believed that her extensions had expired. She approached Kimbrough about resuming the payments on the loan to the bank. According to Anderson, Kimbrough instructed her that the bank had advised her to wait on resuming payments.

A. I said, "Do I give, ah, start with January or how do you want me to do this?" He said, "Hold up." He said to wait. Okay, then when April came, he told me the same thing.

In August 1994, Anderson's mother decided to move in with her. According to Anderson:

I had transferred her [Anderson's mother] social security into my name. I had to prove that I owned the house and that she would be living with me through myself and Home Health.

Anderson had been told that she would have to show proof of home ownership. She stated that "on the 15th of August, he [Kimbrough] brought it, and he said, `Oh, this is your new balance.' And I looked at a balance that went from $13,000.00 to $27,000.00." She was startled by the revelation:

A. I asked him what happened. He told me that his daughter needed some help, and he said — "And I made a loan, but I meant to stop by your house and talk with you about it." And I said, "you meant to stop?" He should have conferred with me before he did that.

¶ 7. Through his brief, Kimbrough notes that he was struggling to meet his personal obligations. He felt as though he needed to consolidate the loans. Kimbrough obtained an additional loan in the sum of $4,000. This amount was added to the amount refinanced on June 15, 1994. Along with the house, Kimbrough listed as collateral a certificate of deposit and forty acres of his land. According to Kimbrough, he used part of this $4,000 loan to pay the interest and principal on the $12,000 loan. The total of the refinanced loan, including the old notes, with the additional $4,000, was $21,558.80—the total to be repaid was $27,549.60. These notes were to be paid in sixty consecutive monthly installments of $459.16 each, commencing on August 5, 1994.

¶ 8. Anderson stated that she did not ask Kimbrough to get additional funding. She testified that Kimbrough borrowed approximately $6,000 without her consent. Growing concerned by this latest development, Anderson questioned Kimbrough about how this loan would be repaid.

A. He told me that the loan officer at the bank had told him to pay on the $27,000 up until August of 1995 and then he would have paid his part off. We disagreed, of course, on that.

¶ 9. Anderson testified that she offered to pay the loan if Kimbrough would place the title in her name. She also said that Kimbrough had placed her home on the market for sale. On May 29, 1996, Kimbrough sent a notice to Anderson to vacate the premises. Because no arrangement could be worked out between the parties, on June 17, 1996, Anderson filed her complaint against Kimbrough to set the deed aside and to prohibit Kimbrough from evicting her. Kimbrough answered and filed a counterclaim. A trial was held on February 27, 1997.

¶ 10. On March 25, 1997, the chancellor ruled that title would be restored to Anderson provided that she paid the balance on the original loan by May 15, 1997. The chancellor concluded that "a fair, appropriate and equitable resolution of the matter is for Anderson to pay off the existing loan" with a balance as of February 27, 1997, of $16,070 and on May 15 of $16,313.03. No payment was made. Another hearing was held on May 22, 1997. Anderson stated that she was still unable to make the payment, but was making progress on obtaining a loan. The court ruled that the reasons that she had not gotten a loan, and the likelihood of her acquiring one, were now irrelevant. On a proffer, Anderson testified that a delay occurred because the bank first wanted her to bring current another loan that she had, which may have been an automobile loan that he mentioned in another context. Other delays allegedly occurred because an attorney involved with the title search left for two weeks at a critical time. A loan officer from the same bank as entered the Kimbrough loan stated that some of the paperwork had just been submitted to him, including Anderson's income statement. The witness could not say whether a loan would be entered or not, but it was certainly a possibility. On June 11, 1997, Anderson's complaint was dismissed with prejudice and title confirmed in Kimbrough.

STANDARD OF REVIEW

¶ 11. The appellate scope of review is limited since the Court will not disturb the findings of a chancellor unless the chancellor was manifestly wrong or clearly erroneous, or if an erroneous legal standard was applied. Steen v. Steen, 641 So.2d 1167, 1169 (Miss.1994). Even so, the "Court will not hesitate to reverse a chancellor when his findings are manifestly wrong or when he has applied an erroneous legal standard." Mississippi Dep't of Human Serv. v. Marquis, 630 So.2d 331, 334 (Miss.1993). The word "manifest" is defined as open, clear, unmistakable, and evident. BLACK'S LAW DICTIONARY 962 (6th ed.1990). Moreover, the manifest error and substantial evidence rule applies only to factual situations and not to questions of law, which require de novo review. Holliman v. Charles L. Cherry & Assocs., Inc., 569 So.2d 1139, 1145 (Miss.1990).

¶ 12. The existence of a contract and its terms are questions of fact to be resolved by the fact-finder, whether a jury or a judge in a bench-trial. Ham Marine, Inc. v. Dresser Indus., Inc., 72 F.3d 454, 458 (5th Cir.1995). Here, however, the core terms were admitted by both parties. The principal task of the chancellor was to determine the legal ramifications of that agreement.

DISCUSSION

¶ 13. The foundation upon which our resolution builds is the following collection of facts that are either agreed or were found by the chancellor after resolving conflicts in the evidence.

¶ 14. Kimbrough had been conveyed Anderson's residence not so that he would own the property in fee...