OPINION
MEHAFFY, J.
In
1930, W. S. Davidson was the owner of 160 acres of land in
Mississippi county, Arkansas. J. R. Crowe was the owner of
320 acres of land in Arkansas county, Arkansas, subject to an
indebtedness of $ 7,000. Davidson and Crowe entered into a
contract to exchange lands. Davidson agreed to assume the
indebtedness due on the Crowe lands, and Crowe to remain in
possession of said lands for three years, but to execute a
note for the rental thereof for the third year in the sum of
$ 3,600. The contract was not recorded and no reference was
made to it in the deeds between Crowe and Davidson.
On June
19, 1930, Davidson executed and delivered to Crowe his
warranty deed conveying the lands in Mississippi county to
Crowe, the consideration mentioned in the deed being the sum
of $ 1 paid and exchange of land between Davidson and Crowe.
This deed was recorded at the recorder's office in
Blytheville on June 23, 1930.
On May 8, 1931, J. R. Crowe, being indebted to
Dwight H. Blackwood in the sum of $ 4,000, evidenced by his
promissory note, executed and delivered to Blackwood a deed
of trust in the execution of which his wife joined, conveying
to Blackwood the real property located in Mississippi county
which he had acquired by warranty deed from Davidson.
Blackwood
had no knowledge, either actual or constructive, at the time
he loaned the money to Crowe and took the deed of trust from
him, of any claim which Davidson might have against said land
by the unrecorded contract.
Crowe
failed to execute the rental note and on October 15, 1932
Davidson filed suit in the chancery court of Chickasawba
district of Mississippi county, Arkansas, against Crowe in
which he sought to have a vendor's lien declared on the
Mississippi county property to enforce the payment of the $
3,600 due Crowe and filed lis pendens notice.
Blackwood had no knowledge of the claim of Davidson, and was
not made a party to the suit by Davidson to enforce the lien.
Blackwood's
mortgage was filed for record January 3, 1933. Davidson knew
of the mortgage before it was filed and knew of it when he
began suit against Crowe. After Blackwood's mortgage was
filed and recorded, Davidson was given a decree against Crowe
and a lien declared on the land. Davidson purchased the land
at the commissioner's sale.
Payments
had been made to Blackwood by Crowe from time to time, and on
August 5, 1938, Blackwood brought this suit against Crowe and
Davidson to secure judgment for the balance due him and to
enforce his mortgage lien. He filed and there was recorded, a
lis pendens notice.
In
April, 1938, Davidson entered into a contract with one H. H
Hardesty to sell the lands in Mississippi county, and
received payment of $ 500.
After
Blackwood had filed suit, Davidson filed answer setting up
the suit which he had brought against Crowe,
the decree, sale, and purchase of said land under said
decree, and further pleaded the statute of limitations. The
chancellor rendered a decree against Crowe in favor of
Blackwood for the amount due, principal and interest, and
dismissed the complaint as to Davidson. The case was tried on
the following
evidence, which was agreed to by the parties as evidence:
"1.
That the land involved in this cause of action is the
northeast quarter (NE 1/4) of section thirty-four (34),
township sixteen (16) north, range twelve (12) east of
Mississippi county, Arkansas.
"2.
That in 1930 this land was owned by the defendant, W. S.
Davidson, and in May, 1930, Davidson entered into a contract
with J. R. Crowe to exchange this land to said Crowe for some
other lands in Prairie county, Arkansas, and as a part of the
consideration for the exchange and transfer, Crowe agreed to
pay Davidson, $ 3,600, which was to be represented by a note
to be executed by said Crowe, and said amount was also to
cover the rental on the Prairie county land for one year.
Crowe failed to execute his note or make his payment as per
his contract. On June 19, 1930, Davidson (without his
wife's joining) conveyed the above described lands to
Crowe for a recited consideration of '$ 1 to me paid and
the exchange of lands between myself and J. R. Crowe,'
said deed now being of record in the recorder's office in
Blytheville, Arkansas, where the same now appears of record
in Deed Record 59, page 399, having been filed for record on
the 23rd day of June, 1930.
"3.
On May 8, 1931, the defendant, J. R. Crowe, was indebted to
the plaintiff, Dwight H. Blackwood, in the sum of four
thousand dollars ($ 4,000) as evidenced by a promissory note
of said date due six months after date and bearing interest
from maturity at the rate of ten per cent. per annum until
paid; that to secure said indebtedness the defendant, J. R.
Crowe and his wife, Hazel Crowe, executed on the 8th day of
May, 1931, a mortgage conveying the above described property
to the said Dwight H. Blackwood which said mortgage was filed
for record on the 3rd day of February, 1933, where the same now appears of record in trust deed record W-1
at page 310 in the recorder's office in Blytheville,
Arkansas.
"4.
That Crowe failed to execute the note for three thousand six
hundred dollars ($ 3,600) to Davidson and failed to pay the
said amount, and that on October 15, 1932, Davidson filed
suit in the chancery court for the Chickasawba district of
Mississippi county, Arkansas, in which he sought to obtain
judgment against Crowe in said sum and to have a vendor's
lien declared on the property, and at the same time filed
lis pendens notice which appears in Lis
Pendens Record No. 2, at page 138, in the recorder's
office in Blytheville, Arkansas. At the time this suit was
filed, Blackwood had not filed his deed of trust from J. R.
Crowe and his wife, Hazel Crowe, but did file the same on the
3rd day of February, 1933.
"5.
At the time of the execution of the deed from Davidson to
Crowe, the above described property was unencumbered, and at
the time of the execution and delivery of the deed of trust
from Crowe and wife to Blackwood said property was
unencumbered except whatever right Davidson may have had to
enforce his claim against Crowe for the three thousand six
hundred dollars ($ 3,600).
"6.
On the note given by J. R. Crowe to the plaintiff, Dwight H.
Blackwood, the following payments have been made:
September 8, 1935
|
$ 200.00
|
January 8, 1936
|
650.00
|
February 8, 1936
|
250.00
|
March 8, 1936
|
350.00
|
July 8, 1938
|
500.00
|
None of
these payments have been noted upon the margin of the record
of the deed of trust securing this indebtedness as said deed
of trust appears in Trust Deed Record W-1, at page 310.
"7.
That on the 5th day of August, 1938, the plaintiff, Dwight H
Blackwood, filed this suit to foreclose his mortgage, and at
the same time filed lis pendens
notice which appears in Lis Pendens Record 2, at
page 375, in the recorder's office in Blytheville,
Arkansas.
"8.
That Crowe contested the suit filed by Davidson, and a
receiver was appointed to take charge of and rent land; that
decree was rendered in favor of Davidson in said suit on
September 25, 1933, and on appeal to the Supreme Court, by
Crowe, the case was affirmed and the opinion of the court now
appears in 189 Ark. 414, 72 S.W.2d 763. Thereafter the land
was duly advertised by the commissioner appointed by the
court, and at the sale, conducted by the commissioner, on the
26th day of February, 1934, Davidson became the purchaser at
said sale for a consideration of three thousand seven hundred
fifty dollars ($ 3,750) which sale was by this court
confirmed and the commissioner's deed executed and
approved by the court.
"9.
That on the same day that Davidson conveyed the above
described property to Crowe, Crowe executed and delivered to
Davidson a warranty deed conveying the property in Prairie
county, Arkansas, to Davidson
according to the terms of the contract.
"10.
That the contract to exchange lands between Davidson and
Crowe was not filed for record, and that, Blackwood had no
knowledge, actual or constructive, of the existence of said
contract at the time of the execution and delivery to him of
the trust deed by Crowe and his wife conveying said property;
that at about the time Blackwood filed his mortgage for
record in the Chickasawba district of Mississippi county,
Arkansas, he knew of the suit pending by Davidson against
Crowe, but he did not make himself a party thereto, and that,
at said time the note from Crowe to Blackwood was past due
and no payments had been made thereon; that at the same time
Davidson had actual knowledge of the existence of the
indebtedness from Crowe to Blackwood and of the mortgage
given by Crowe to Blackwood to secure the same, but that
Blackwood was never made a party to the suit by Davidson
against Crowe. That Blackwood and counsel for Davidson
discussed the sale of said land, and that
Blackwood knew of the sale of the land under the Davidson
decree against Crowe, and that Blackwood also knew that
Davidson's wife had not relinquished dower and homestead
in the deed from Davidson to Crowe; that Blackwood further
knew that Davidson took possession of the land after he
purchased at the commissioner's sale, and that Davidson
is now in possession of said land.
"11.
That either party herein may submit any record or documentary
evidence in reference to this case, and that copies of the
same may be filed and treated in evidence the same as though
the original records thereof are introduced.
"12.
That on ...
