Cox v. Wooten Bros. Farms, Inc., CA

• Decision Date: 21 January 1981
• Docket Number: No. CA,CA
• Citation: 610 S.W.2d 278,271 Ark. 735
• Parties: Nola Hickingbottom COX, Appellant, v. WOOTEN BROTHERS FARMS, INC., Appellee. 80-348.
• Court: Arkansas Court of Appeals

Page 278

610 S.W.2d 278

271 Ark. 735

Nola Hickingbottom COX, Appellant, v. WOOTEN BROTHERS FARMS, INC., Appellee.

No. CA 80-348.

Court of Appeals of Arkansas.

Jan. 21, 1981.

W. G. Dinning, Jr., Helena, for appellant.

Daggett, Daggett & Van Dover by W. H. Daggett, Marianna, for appellee.

GLAZE, Judge.

The appellant, Cox, appeals an adverse chancery court decision and argues one issue for reversal. The sole issue to be decided is whether the trial court erred in applying the equitable doctrine of subrogation so as to entitle the appellee, Wooten, to the rights of the Federal Land Bank of St. Louis on its note and mortgage executed by Cox and other named heirs who acquired an interest in certain property under a family settlement agreement. Whether or not the trial court correctly applied the doctrine directly depends upon the facts before the court and the facts are not in dispute.

On February 27, 1967, Clinton Hickingbottom, Nola Hickingbottom, his wife (now Cox, appellant), and Jerry Hickingbottom, Mildred Hickingbottom, Shirley Baker and Jane Dare (all children of Clinton Hickingbottom by a former marriage) executed a promissory note and mortgage to the Federal Land Bank of St. Louis in the sum of $89,475. Clinton Hickingbottom owned land situated in Phillips County which secured the promissory note. Clinton Hickingbottom died, and after his death the widow, Cox, and the heirs, the deceased's four children, entered into a family agreement. The agreement limited each family member's liability on the Federal Land Bank note. First, 100 acres of the encumbered land was assigned to Cox as her dower interest, and the remaining 267 acres were assigned to the heirs. By this same agreement, the note payment to Federal Land Bank was prorated between Cox and the heirs so that each was to pay their share when the note payment came due. This agreement became a part of a probate court order.

Sometime after the family agreement, Hickingbottom's heirs (children) agreed to sell their assigned property to Wooten. Wooten agreed, among other things, to assume the heirs' total obligation on the note to the Federal Land Bank. Wooten received credit on the purchase price paid in the amount the heirs were to pay on the note, i. e., 71.2% of the entire debt. Wooten also required the heirs to give it a mortgage on their remainder interest in the lands assigned to Cox in case Wooten was ever called upon to pay her pro rata share (28.2%) of the debt owned on the Federal Land Bank loan.

All went well for four years until Wooten found it necessary to refinance its operation and obtain an additional loan from the Federal Land Bank. Before Wooten could be approved for additional funds, Wooten was required to pay off the entire mortgage indebtedness, including the pro rata obligation of Cox. Cox was unaware that Wooten had paid the entire Federal Land Bank note until she was advised that the pro rata payments she had continued to pay were being placed in Wooten's account and not on the Federal Land Bank note. Cox then refused to make her 1980 payment and any further payments, contending Wooten was a volunteer when it liquidated the Bank note, and she no longer was obligated to pay Wooten or the Federal Land Bank. Wooten filed action against Cox in lower court seeking the 1980 payment which was past due and an order compelling her to make all further payments to Wooten on her pro rata share of the original debt to the bank. The trial court granted Wooten the relief it sought and it is this adverse decision from which Cox appeals.

Our Supreme Court has considered the doctrine of subrogation and its application on many occasions and most of the relevant Arkansas cases are set forth in the parties' briefs. The doctrine is no better set forth and explained than in the case of Baker, Adm'r v. Leigh, 238 Ark. 918, 385 S.W.2d 790 (1965) wherein the Court, citing Southern Cotton Oil Company v. Napoleon Hill Company, 108 Ark. 555, 158 S.W. 1082 (1913), adopted the following discussion and guidelines in determining when subrogation should be applied:

The doctrine of subrogation is an equitable one, having for its basis the doing of complete and perfect justice between the parties without regard to form, and its purpose...