Beebe v. Olentine

• Decision Date: 30 January 1911
• Citation: 134 S.W. 936,97 Ark. 390
• Parties: BEEBE v. OLENTINE
• Court: Arkansas Supreme Court

134 S.W. 936

97 Ark. 390

BEEBE v. OLENTINE

Supreme Court of Arkansas

January 30, 1911

Appeal from Pike Chancery Court; James D. Shaver, Chancellor affirmed.

STATEMENT BY THE COURT.

About the 1st of January, 1905, Charles Olentine and Elmer E. Shock conceived the plan of buying up certain timber lands in Pike County, Arkansas, from various persons and selling them for a profit. According to the testimony of Shock, each was to pay half of the purchase price, and each to have half of the final profits. In furtherance of their plan, they entered into the following written agreement with Jeff and Wallace Hughes on January 31, 1905:

"This agreement made this day by which Jeff Hughes and Wallace Hughes, of Rock Creek, Ark., are to deliver to Charles Olentine and Elmer E. Shock, their administrators or assigns perfect titles to the following tracts of land south of Rock Creek postoffice, Ark.: W. S. Bullard, 520 acres; J. P Farmer, 160 acres; A. S. Herring, 200 acres; W. D. Fuller 160 acres; G. O. Doster, 160 acres; A. Doster, 320 acres Geo. Fuller, 80 acres; Geo. Spears, 160 acres; Pat Baker, 120 acres; Frank Baker, 160 acres; Bill Baker, 120 acres; John Thornton, 160 acres. The price to be $ 6 per acre. The receipt of $ 2,000 is hereby acknowledged, the balance to be paid May 1, 1905, or as soon thereafter as perfect title can be made. In case if for some unforeseen and unavoidable event it should be impossible to perfect title to a particular tract in the above, that tract shall be deducted from the total amount. It is understood and is made a part of this contract that the timber on this land is to remain in its present condition unless changed by Providence."

On the day this contract was executed Olentine gave a check for $ 1,000, payable to Wallace G. Hughes, and it was paid. On the 7th day of February, 1905, Elmer E. Shock assigned his interest in the contract with the Hughes brothers to L. V. Beebe, in consideration that Beebe should advance the money to purchase the lands, and divide equally the profits of a resale with him. On the 10th day of April, 1905, Jeff and Wallace made a contract with one Fuller to purchase 160 acres of land from him, and the deed was made to Charles Olentine and E. E. Shock jointly.

The remainder of the land purchased by Jeff and Wallace Hughes was conveyed to L. V. Beebe, and comprised about 1,039 acres. Beebe paid therefor $ 7,214 by check. The first check is dated February 7, 1905, for $ 1,000 payable to E. E. Shock. The second check is dated April 18, 1905, for $ 480, payable to Wallace Hughes. The third check is dated June 2, 1905, for $ 2,000, payable to Wallace Hughes. The fourth check is dated June 12, 1905, for $ 2,380, payable to Wallace Hughes. The fifth check is dated July 26, 1905, for $ 1,354, payable to Wallace Hughes.

In 1908 the lands were sold to the Caddo River Lumber Company for a profit. The above facts are undisputed.

This suit was instituted in the chancery court by Charles Olentine against Elmer E. Shock and L. V. Beebe, in which he claimed to be equitable owner of a half interest in the lands conveyed to Beebe. The prayer of his complaint was that his interest in the lands be declared and fixed, and that he have judgment for one-half the amount agreed to be paid by the Caddo River Lumber Company for the lands, less the amount due Beebe for advances of purchase money made by him.

The Caddo River Lumber Company paid the balance of the purchase money due by it into the registry of the court. Subsequently Olentine filed an amendment to his complaint in which he alleges that he is entitled to one-half of the profits arising from the sale of the lands, and that Beebe and Shock are endeavoring to defraud him out of his share thereof. He prays judgment for his share of the profits.

The defendants, Shock and Beebe, filed a joint answer, in which they state that Olentine abandoned his contract, and that Beebe subsequently purchased the lands for his own use and benefit, with an agreement on his part to divide equally the profits of the sale thereof with Shock. They also interposed the plea of the statute of frauds.

Elmer E. Shock testified that, after making the transfer of his interest to Beebe, he acted for Beebe. He said that he had numerous conversations with Olentine about the purchase money for the lands. We quote the following from his testimony: "Q. What were the circumstances of your having the titles made to Mr. Beebe and what was your agreement with him at the time? A. I sold Mr. Beebe my interest in the contract; Mr. Olentine could not pay his part of the money, and the rest of the titles were taken in Mr. Beebe's name, he paying for them. Q. Under what sort of agreement? A. What do you mean? Q. What was the agreement with Beebe? A. Well, Mr. Beebe--Mr. Olentine could not get up his money and Mr. Beebe suggested that he take the title. Mr. Olentine said he was expecting some money from the East, and he failed to get it on account of a bank up there failing, he said. Mr. Beebe said he would take up the titles himself, and when Mr. Olentine got his money he could follow and take up the lands--other lands--as it commenced with; I believe that was the understanding with Mr. Beebe. That was the purport of the conversation between Mr. Beebe and myself."

Charles Olentine testified that he first suggested the arrangement to purchase these lands to Mr. Shock; that he told Shock that he could raise $ 1,000, but it would be later before he could have any more money; that he had some money coming to him in Ohio, but would not get it for a few months; that Shock told him not to worry about the money, that he had a party who would furnish the money; that at different times Shock told him that he could get the money from various parties, but that about the last of May he told him that he had made arrangements with L. V. Beebe to furnish the money; that, instead of taking a mortgage on the lands, Beebe preferred to have the title to the land made to him to secure him, and when it was satisfied he would reconvey to us; that he told Shock that this was perfectly satisfactory, and, relying on these statements and representations of Shock, he joined with him in directing that the title to the remaining lands should be taken in the name of Beebe; that Shock told him he should pay 8 per cent. interest; that Shock did not inform him that Beebe was advancing his (Shock's) part of the purchase money of the land, too; that he got his money from the East in the fall, and that in March, 1906, he went to Shock to pay his part of the purchase money, and stop the interest; that Shock then informed him that he had made a contract with Beebe by which Beebe was to share half of the profits, and that he could not take the money; that he replied that he never understood it that way; that he could have done better than that in the East.

Wallace Hughes testified that Charles Olentine paid him $ 1,000 on the timber contract when it was executed; that subsequently he had a talk with Shock with reference to an agreement between him and Beebe about the latter furnishing the balance of the money on the timber contract; that Shock said that Beebe had agreed to furnish him and Olentine with money enough to finish paying for the timber, and that Beebe wanted the deeds made to him as security; that he never had any conversation with Beebe about furnishing the money; that he heard Shock tell Olentine that he had made arrangements with Beebe to furnish them money to pay for the timber, and that Beebe wanted the deeds made to him to secure him for the money loaned; that when the contract was first entered into he heard Olentine tell Shock that he did not have money enough to carry it out at that time, but would receive sufficient money to do so later; that Shock replied that he had plenty of money, and would furnish what was necessary until Olentine could get his money from Ohio.

Wallace Hughes's testimony was corroborated by that of E. C. Hughes.

L. V. Beebe testified that he purchased the lands for himself, and that at the time he did so he understood that Olentine had abandoned and given up his contract and dropped out of the deal.

The chancellor entered a decree quieting the title of the Caddo River Lumber Company in the lands, and giving to the plaintiff, Olentine, one-half of the net profits arising from the sale thereof; and the other half to Beebe. The defendants, Shock and Beebe, have duly prosecuted an appeal to this court, and the plaintiff, Olentine, has taken a cross appeal.

J. C. Pinnix and T. D. Crawford, for appellants.

1. The contract sued on falls within the meaning and purpose of the statute of frauds. Kirby's Dig., § 3654; 20 Cyc. 156; 5 Ark. 76; 55 Ark. 414; 37 Ark. 149; 42 Ark. 393; 1 Perry, Trusts, § 135; Story, Eq. Jur., § 1201a; 40 Mo. 187; 45 N.Y. 589; 40 Cal. 637; 1 Eden 515; 68 A. 231; 147 Mass. 328; 7 L. R. A. (N. S.) 945; 134 Mass. 109; 145 Ill. 586; 81 Wis. 104; 88 Ga. 819.

2. Before a deed absolute on its face will be adjudged to be a mortgage, the evidence must be clear and convincing, such as courts of equity require to reform a deed; and mere verbal declarations of the parties are not in general sufficient to authorize a court to declare that a deed which is absolute on its face is a mortgage. 24 Wis. 654; 27 Cyc. 1028; Id. 1025-7; 97 U.S. 626; 132 Ill. 243; 158 Ill. 209; 78 Ark. 527; 48 Ark. 169 and authorities cited; 142 Ill. 482; 11 Ark. 82; 75 Ark. 551; 31 Ark. 163; 19 Ark. 278; 188 Pa. 279; 176 Pa. 331; 3 Rich. Eq. 153.

3. The testimony of appellee as to what Shock told him was incompetent. To bind Beebe by his declarations, Shock must have been authorized to represent Beebe at the time the declarations were made, and they must have been so connected...