Gates v. Mortgage Loan & Insurance Agency, Inc

• Decision Date: 08 April 1940
• Docket Number: 4-5897
• Citation: 139 S.W.2d 19,200 Ark. 276
• Parties: GATES v. MORTGAGE LOAN & INSURANCE AGENCY, INC
• Court: Arkansas Supreme Court

139 S.W.2d 19

200 Ark. 276

GATES v. MORTGAGE LOAN & INSURANCE AGENCY, INC

4-5897

Supreme Court of Arkansas

April 8, 1940

Appeal from Lonoke Chancery Court; Frank H. Dodge, Chancellor affirmed.

Affirmed.

Owens Ehrman & McHaney, for appellant.

Bradley & Patton, for appellee.

OPINION

MEHAFFY, J.

Ferdinand Gates, on June 18, 1903, made a will disposing of his property and appointing executors and trustees, as follows: His three sons, Elias, V. A., and J. M. Gates, and Max Mayer of Little Rock, the executors of his last will and testament. His will provided for certain specific legacies, and provided that his executors should continue in operation of the business of his two stores at DeVall's Bluff and Lonoke, Arkansas, until the close of the ensuing winter after his death so as to not embarrass or inconvenience his customers and patrons, and also to enable the executors to realize the largest possible amount on the debts owing to him in said two stores and the assets invested there. He provided, however, that if his death should occur either in the month of December or January, then the business of the two stores should be discontinued by the first day of April next succeeding. It was provided that his real estate was devised to the executors upon certain trusts, which he named. It was provided that the executors should sell his lands either for cash or on short or usual credits with such speed and in such quantities and parcels as will enable them to obtain fair and reasonable prices therefor. It was provided that under certain conditions they might exchange lands or purchase other lands, and they were authorized to sell any of the lands belonging to his estate.

The testator, in his will, also appointed his son, Elias Gates, trustee for the moneys and properties going to infants, and directed him to manage and control this property during their minority. He also appointed his son, Elias Gates, counsel and legal adviser of the executors and trustees.

On June 18, 1903, the testator made a codicil, making certain changes in his will. The last codicil to his will was made on February 24, 1909. Ferdinand Gates died on July 20, 1909, and his will was thereafter probated.

The three adult sons, Elias, V. A., and J. M. Gates, operated the business as partners until February 15, 1929, when these three sons joined in a deed of trust conveying their interest in the lands of the trust estate to F. W. Neimeyer, trustee, for various creditors of the Gates Mercantile Company. The executors and trustees under the will of Ferdinand Gates joined in the execution of this deed of trust. The interest of the other heirs was not involved.

Early in 1930 suit was brought to foreclose the deed of trust. All the heirs, executors and trustees, were parties to this suit. There was a sale of the property under the foreclosure suit, and the appellee, Mortgage Loan & Insurance Agency, Inc., became the purchaser and received a commissioner's deed on January 6, 1939, thereby acquiring title to one-half interest in that part of the Ferdinand Gates estate formerly owned by Elias, V. A., and J. M. Gates.

The present suit was instituted on July 10, 1939, for a partition of the property belonging to the Gates estate, and it was asked in the prayer that if it be found that the same are not susceptible of division in kind, the same be sold and the proceeds of the sale divided among the parties according to their respective interests.

Answer was filed, and the following agreed statement of facts introduced: "It is hereby stipulated and agreed by and between the parties to this suit, the plaintiffs being represented by Bradley & Patten, their attorneys, and the defendants by Owens, Ehrman & McHaney, their attorneys, as follows, to-wit:

"That Victor A. Gates, Elias Gates, J. M. Gates, Mayer F. Gates, Clara Samish and Florence Silberberg are all of the children of Ferdinand Gates, deceased, who died testate on the 20th day of July, 1909; that the will of the said Ferdinand Gates, deceased, was duly admitted to probate by the probate court of Lonoke county, State of Arkansas, on the 6th day of September, 1909, and is now duly recorded in Will Record Book B, at pages 279 to 294 of the records of said probate court of Lonoke county, Arkansas, and that said will was likewise admitted to probate in Shelby county, Tennessee; that all of the specific bequests mentioned in said will have been paid; that said Victor A. Gates, Elias Gates, J. M. Gates, Mayer F. Gates, Clara Samish and Florence Silberberg are the residuary legatees of the said Ferdinand Gates, and that each was or is entitled to one- sixth interest in said residuary estate. The attached copy is a true and correct copy of the will of the said Ferdinand Gates recorded in Lonoke county, as set forth above and is made a part of this stipulation as 'Exhibit A.'

"It is further stipulated and agreed that the properties sought to be partitioned in this action constitute the remainder of the residuary of the said Ferdinand Gates, deceased.

That on the 7th day of March, 1927, the Gates Mercantile Company was indebted to the following named creditors for the amounts set opposite their respective names, as follows, to- wit:

Bankers Trust Company

$ 58,356.05

Bank of Commerce & Trust Co.

28,581.08

Union & Planters Bank & Trust Co.

57,542.92

Manhattan Savings Bank & Trust Co.

16,925.92

Lonoke County Bank

2,500.00

Scott-Mayer Commission Co.

3,969.34;

that Elias Gates, J. M. Gates, and Victor A. Gates were indorsers on all of the promissory notes evidencing said indebtedness and their liability thereon was joint and several; that on said date all of said notes were past due and payable; that the time of payment of the said above described indebtedness was renewed and extended to February 15, 1929, on which date Victor A. Gates and his wife, Imogen Gates, J. M. Gates and his wife, Beatrice Gates, Elias Gates and his wife, Theresa Gates, joined with Victor A. Gates, J. M. Gates, Elias Gates, and Max Mayer as executors and trustees under the last will and testament of Ferdinand Gates, deceased, in the execution of a deed of trust wherein the undivided interests of the said Victor A. Gates, J. M. Gates, and Elias Gates in the lands embraced in this action, along with other property since sold and the proceeds distributed, was mortgaged to F. W. Neimeyer, trustee for said creditors above named to secure the payment of sums due said creditors as follows, to-wit:

"$ 58,355.80 due Bankers Trust Company, Little Rock, Arkansas evidenced by a note for said sum dated 15th day of February, 1929, and due the 31st day of December, 1929;

"$ 28,576.61 due Bank of Commerce & Trust Company of Memphis, Tennessee, evidenced by a note for said sum dated 15th day of February, 1929, and due the 31st day of December, 1929;

"$ 44,097.94 due Union Planters Bank & Trust Company, Memphis, Tennessee, evidenced by a note for said sum dated February 15, 1929, and due the 31st day of December, 1929;

"$ 16,884.72 due Manhattan Savings Bank & Trust Company of Memphis, Tennessee, evidenced by a note for said sum dated February 15, 1929, and due the 31st day of December, 1929;

"$ 2,558.31 due Lonoke County Bank, Lonoke, Arkansas, evidenced by a note for said sum dated February 15, 1929, and due the 31st day of December, 1929;

"$ 4,194.03 due Scott-Mayer Commission Company, Little Rock, Arkansas, evidenced by a note for said sum dated the 15th day of February, 1929, and due the 31st day of December, 1929.

"That due to the non-payment of said indebtedness at its maturity the said F. W. Neimeyer, trustee, and the creditors above named filed suit in the Lonoke county chancery court to foreclose said undivided interests, said suit having been filed in the early part of 1930; that after the filing of said complaint and before requesting the court to direct the sale of said lands for the payment of said debts, Victor A. Gates died on the 6th day of May, 1937, J. M. Gates died on the 12th day of June, 1930, Elias Gates died on the 10th day of October, 1929, and the foreclosure suit named Emmanuel Safferstone, executor of his said estate as a party defendant;

"That during the time said foreclosure proceedings were pending a receiver was appointed who supervised said properties and who with the approval of the parties and the court sold a number of tracts of the said land;

"That the attached copy marked 'Exhibit B' is a true and correct copy of a decree entered by the court on the 20th day of March, 1936, and which is now of record in Chancery Record Book N at page 247 in the office of the chancery clerk in and for Lonoke county, Arkansas; that all of the parties were sui juris and all agreed thereto; that no appeal was taken therefrom;

"It is further stipulated and agreed that a decree was rendered by the Lonoke chancery court on the 7th day of October, 1938, directing the sale of said undivided 1/2 interest in the lands and personal property as described under the deed of trust hereinabove described unless the debt thereby secured was paid within 30 days;

"That said debts were not paid and Albert G. Sexton, after said property had been advertised as required by law, proceeded to sell same; that an undivided 1/2 interest in and to the lands and personal property sought to be partitioned in this action and representing the undivided 1/6 interest each in said estate owned by Victor A. Gates, J. M. Gates and Elias Gates was sold at public sale to Mortgage Loan & Insurance Agency Inc.; that on the 6th day of January, 1939, the said Albert G....