Kahn v. Metz

• Decision Date: 07 December 1908
• Citation: 114 S.W. 911
• Parties: KAHN v. METZ.
• Court: Arkansas Supreme Court

Page 911

114 S.W. 911

KAHN v. METZ.

Supreme Court of Arkansas.

December 7, 1908.

Appeal from Pulaski Chancery Court; John E. Martineau, Chancellor.

Action by William Metz against Herman Kahn. Judgment for complainant, and defendant appeals. Reversed and dismissed.

William Metz brought suit in equity against Herman Kahn, alleging: That on the 6th of October, 1899, he conveyed to Kahn a tract of land in Pulaski county as security for $600, loaned by Kahn to him; that on December 27, 1899, he conveyed to Kahn lots 4, 5, and 6 of block 6, in the city of Argenta, as security for $450 loaned to plaintiff by defendant; that on the blank date he conveyed to defendant a tract of land in Lonoke county; that afterwards Kahn reconveyed to him the land in Pulaski county, and Kahn sold the land in Lonoke county for $750 and never accounted to plaintiff therefor; that in April, 1906, Kahn so'd to Dr. F. L. French the Argenta lots for $6,200, and paid plaintiff therefrom $733.18; that the defendant is entitled to a credit of $1,848.45 which he paid to the Herman Kahn Company; and that the defendant is also entitled to credit for taxes paid on plaintiff's property, the amount of which was unknown to plaintiff. And he prayed that an account be stated between them and the defendant charged with all moneys received by him for the plaintiff's property, and credited with all sums to which he is entitled, and that plaintiff be given a decree for the balance. Kahn answered the complaint and admitted that Metz executed to him a deed to the property in Pulaski county, but denies that it was security for a loan of $600. He admits that he deeded to him the lots in Argenta, but denies that the deed was executed as security for $450. He denies that he executed to him a deed for the Lonoke county property, and that he afterwards sold it for $750, and that he had failed to account to plaintiff therefor. He says that he made more payments than are set forth in the complaint, for the account of the plaintiff, and that since the acquisition of the property from the plaintiff he has expended amounts upon the said property not set forth in the complaint; and he alleged that said conveyances were absolute, and were not intended as security for debt, and that the pretended claim of the plaintiff, if it ever existed, is stale and barred by limitation.

The evidence developed these facts: Herman Kahn was in the wholesale liquor business, being president of the Herman Kahn Company, a corporation, which was in December, 1906, succeeded by the Block-Lyons Company. That Metz was a customer of said company, being engaged in the saloon business in Argenta. The court found that there was nothing due Metz on account of the Lonoke county land. As there is no cross-appeal, the controversy over it is eliminated. There was a mortgage on the Argenta lots, and Coy, the holder of the mortgage, was threatening foreclosure. Metz applied to Kahn for the money necessary to satisfy the mortgage, which Kahn advanced. There is a dispute as to whether the amount was $450, or whether it was $750. Metz says that the conveyance of the said lots to Kahn was for the purpose of saving it for him, and that Kahn settled with Coy and was to wait on him until he was able to redeem the property. He gives a similar version of the transaction inducing his deed to Kahn for the farm in Pulaski county, which was situated near McAlmont. The Argenta lots were sold to Dr. French for $6,200 in 1906, and at that time Kahn paid Metz $733.18 and deeded back to him the McAlmont farm. Metz says that the amount due him at that time from the proceeds of the sale of the Argenta lots was as follows: That he should have been charged with the amounts which Kahn had paid on the Coy mortgages, with the $733.18, and with something like $2,000 which he owed the Herman Kahn Company, and taxes on the places for several years paid by Kahn, and should have been credited with the difference between that and the $6,200 received by Kahn for the sale of the Argenta lots, which he claimed was about $2,300.

Kahn testifies that Metz came to him and told him that he was about to lose all of his property, and asked him to advance money to him to save it, which he finally agreed to do on this understanding: He was to pay $750 to Coy on the Argenta lots and stand good for an account to the Herman Kahn Company, and Metz was to deed him the property, and he would give Metz the privilege of rebuying the same within two years, with 8 per cent. interest and taxes, and Metz was to give him a thousand dollars profit on the transaction. At the time of the conveyance of the Argenta lots, Metz was needing about $700 for his liquor license for the ensuing year, and wanted the Herman Kahn Company to advance it to him, and Herman Kahn personally guaranteed its repayment to the company, in addition to the $750 paid him which went to relieve the Coy mortgage. As to the farm, it had previously been deeded to him in consideration of $600, a part of which was used to pay Coy for the mortgage upon it, and the balance to pay for 40 acres of land, which was included in the deed from Metz to him. He paid taxes on both pieces of property, and paid for improvements on the Argenta lots. These lots he sold to Dr. French for $6,200, and at that time, at the direction of Metz, he paid to the Block-Lyons Company, the successors to the Herman Kahn Company, an account which Metz owed it, amounting to $1,848.45. The following questions were asked, and answers given, with reference to the sale of the Argenta lots: "Q. Who sold them? A. I did. Q. How did you come to deal with Mr. Metz in regard to it? A. Well, he came in, and the firm wanted their money, and he was all the time trying to pay this back account, this particular account, and finally I sold them to Mr. French myself, F. L. French." He then charged Metz with $600 and interest from October 9, 1899, the date of the deed to the McAlmont farm, charged him with $750 and interest thereon from December 28, 1899, the date of the deed to the Argenta lots, charged him with the taxes on all the property, with the cost of a concrete walk on the Argenta lots, and $1,000 to pay for his services, and gave him a check for $733.18, which he claimed balanced his account with him, and gave him a deed to the McAlmont farm.

In regard to this settlement, Metz testified: "After what Mr. Kahn called a settlement, after he gave me that $700 and whatever it was, and made me sign a receipt payment in full up to date, I had to give him that receipt when he handed me that money." He then proceeds to state wherein he afterwards concluded that the settlement was wrong. He was asked this question: "Q. At the time Mr. Kahn gave you a check for $733.18, did you know how much he owed you at that time? A. I didn't know. He never gave me a statement." He denied that Kahn had ever furnished him a statement, at the time of the settlement or prior thereto, or that he ever gave him any receipt for taxes or other memoranda relating to the property. On the other hand, Kahn says: That, at the time he gave him the check for the $733.18, he furnished him a statement of these items. That he seemed pleased at the settlement then made, and executed to him the following receipt: "Little Rock, Ark., April 7, 1906. Received of Herman Kahn seven hundred and thirty-three dollars and eighteen cents ($733.18), in full of all demands for any equity or claim of any kind I may have in lots 4, 5 and 6, in block 6, Argenta, Arkansas. [Signed] William Metz." That he gave him tax receipts and memoranda at that time. Metz admitted that Kahn paid him $733.18. He was asked if he remembered what date it was, and answered: "Well, I couldn't say exactly. It was shortly (after) Mr. Kahn made up my account, and told me that was my balance. I don't know exactly the date."...