Driver v. Lacer

• Decision Date: 22 May 1916
• Docket Number: 8
• Citation: 186 S.W. 824,124 Ark. 150
• Parties: DRIVER v. LACER
• Court: Arkansas Supreme Court

186 S.W. 824

124 Ark. 150

DRIVER v. LACER

No. 8

Supreme Court of Arkansas

May 22, 1916

Appeal from Mississippi Chancery Court, Chickasawba District; C. D Frierson, Chancellor; reversed.

Decree reversed and cause remanded.

J. W Rhodes, Jr., and W. J. Lamb, for appellant.

1. The legal and equitable title never merged in Lilly by virtue of the conveyance. Nothing that Lilly and Holloway could do could divest the vendor's lien. Kirby's Digest § 51. The case, 171 S.W. 144, is conclusive of this case. See also 105 Ark. 156; 27 Cyc. 1377-8, note 2 and B; Ib. 1379, note D; 42 S.E. 5; 68 Am. St. Rep. 685.

2. The assignment of the notes was an assignment of the lien. Kirby's Digest, sec. 510; 68 Am. St. Rep. 691. There was no satisfaction of the mortgage. Kirby's Digest, secs 5401-3. We have no statute for the recording of assignments of mortgages. Kirby's Dig., secs. 510, 511, 512; 27 Cyc. 1296, 1314, note 2; Ib. 1315, note B; 51 N.W. 520; 115 Ark. 366.

3. The notes were negotiable and appellant has a valid lien by reservation in the deed of which all subsequent grantees must take notice.

The appellee pro se.

1. The notes sued on had actually been paid and the vendor's lien extinguished by the merging in Lilly of the vendor's lien in the legal title and by the deed from Lilly to Grant. The blank endorsement of Lilly did not carry the lien. 39 Cyc. 1810; 23 Ark. 258. Prior to Kirby's Dig. § 610, the assignment of a note did not pass the vendor's lien. 28 Ark. 401. Since the passage of the Act April 21, 1873, our courts have gone no further than required by the act in holding that the lien passed to the assignee, the policy being to discourage secret liens. 23 Ark. 258.

2. There was a merger. 2 Jones on Mortgages, § 848, 854; 70 N.E. 903; 2 Pom. Eq. § 798, note; 27 Cyc. 1379, note D. 1379. The deed from Lilly to Grant cancelled the lien. 33 Ark. 310; 27 U. S. (Law. Ed.) 531.

OPINION

HART, J.

Mrs. S. L. Driver sued O. R. Lilly, Allen Holloway, M. P. Grant and Philip Lacer to recover on four promissory notes, each for the sum of $ 112.50 and to foreclose a vendor's lien in a deed from O. R. Lilly to Allen Holloway to certain lands in Mississippi County. At the September, 1914, term of the chancery court, judgment by default was taken against all the defendants except Lacer, who filed his answer denying the right of plaintiff to assert a vendor's lien on the lands in controversy and averring that he was an innocent purchaser for value without notice of any equities of the plaintiff.

The material facts are as follows: On the 24th day of June, 1907, O. R. Lilly conveyed to Allen Holloway the lands in controversy and as evidence of the purchase money Holloway executed and delivered to Lilly his four promissory notes each for $ 112.50, dated June 24, 1907, and due respectively on or before Nov. 15, 1911, 1912, 1913, 1914. Lilly executed his warranty deed to Holloway and each of the above notes was recited in the deed and a lien was expressly reserved in the deed to secure the payment of the notes.

On the second day of December, 1909, Allen Holloway and his wife sold and conveyed the land to J. B. Barron and O. R. Lilly, who agreed to assume the $ 450 lien existing against the land in favor of Lilly by virtue of his former deed. On the 20th day of May, 1910, Barron and wife conveyed his undivided one-half interest in the land to O. R. Lilly and the latter assumed and agreed to pay all encumbrances against the land. On the 12th day of September, 1910, O. R. Lilly and wife conveyed the land to M. P. Grant for a valuable consideration. On the 2nd day of January, 1912, M. P. Grant conveyed the land to Philip Lacer for a valuable consideration. On the 6th day of March, 1911, O. R. Lilly executed a promissory note for $ 10,000 in favor of Mrs. S. L. Driver, and put up as collateral security in addition to other notes, the four notes executed to him by Holloway above referred to. On the 20th day of January, 1914, Mrs. Driver caused to be entered on the record of the deed from Lilly to Holloway a certificate to the effect that the four notes described in the deed had been hypothecated to her to secure the indebtedness of O. R. Lilly to her.

The chancellor found that Philip Lacer was an innocent purchaser of the land for value without notice of the assignment of said notes, and that because the notes had not been assigned to Mrs. Driver until after the date of the deeds reconveying the land to Lilly, that the legal and equitable title to the land merged in Lilly and constituted a cancellation of the vendor's lien retained in the deed from Lilly to Holloway. From the decree entered of record the plaintiff has appealed.

It is contended by counsel for the plaintiff that this case is controlled by Hebert v. Fellheimer, 115 Ark. 366, 171 S.W. 144. They insist that the facts in that case are in all essential respects similar to the facts in the instant case; but it...