Kendall v. Davis

• Decision Date: 16 January 1892
• Citation: 18 S.W. 185,55 Ark. 318
• Parties: KENDALL v. DAVIS
• Court: Arkansas Supreme Court

18 S.W. 185

55 Ark. 318

KENDALL v. DAVIS

Supreme Court of Arkansas

January 16, 1892

APPEAL from Hempstead Circuit Court in chancery, PAUL JONES, Special Judge.

This is an action of unlawful detainer by John H. Davis against W. E Kendall for possession of two lots in the town of Hope. The complaint charges Kendall with holding over after expiration of his term of lease, and with being in default for rents.

Defendant denied plaintiff's ownership, and, by way of cross-bill alleged that plaintiff held the legal title to the land as security for a usurious loan, upon which he had made certain payments. He asked that the title be vested in him, and that he recover the usurious payments.

The cause was transferred to the equity docket. From the evidence it appears that Kendall purchased the land from Patrick Donnelly. Sometime in 1878 or 1879 he applied to B. L. Rye to borrow $ 200 to pay for the land, of which he was then in possession as his home. Rye agreed to make the loan at 2 1/2 per cent. interest per month, upon condition that Donnelly would make a conveyance to him of the lots. The loan was made and the deed executed to Rye on July 30, 1880. Subsequently on November 1, 1880, Davis paid Rye $ 200, the amount due by Kendall, and took a deed to the land. Kendall continued in possession of the land and paid Davis $ 5 per month. Kendall contends that Davis loaned him the $ 200; Davis insists that he bought the land and rented it to Kendall. Upon this point the evidence is stated in the opinion. On December 3, 1883 Davis executed to him a title bond which, after the usual formal obligation, contained the following condition, viz.:

"The condition of the above obligation is this: Whereas, the said W. E. Kendall has this day purchased of the said John H. Davis the following tract or parcel of land situated in the county of Hempstead, State of Arkansas, and described in the survey" (here follows a description of the lots), "and agreed to pay therefor the sum of $ 180 in the following manner: On the 1st day of December A. D., 1884, in one note for that amount, bearing even date with this instrument. Said note is given for payment for the above described lots or parcels of land; and if said note is not paid on that date, the said W. E. Kendall agrees to surrender this instrument and give the said John H. Davis, his heirs or assigns, peaceable possession of the property described. The said W. E. Kendall also agrees to pay to the said John H. Davis, his heirs or assigns, $ 5 per month rent for the above described property, the rent to be paid monthly by the 10th day of each month; if the rent is not paid by the time specified, this obligation is void. Now, if the said John H. Davis, his heirs or assigns, shall, on the punctual payment of said note and all taxes assessed on said land, and the surrender to them of this instrument, convey, or cause to be conveyed, to the said W. E. Kendall, his heirs or assigns, the above described premises, with warranty of title, this obligation to be void; otherwise to be in full force and effect."

The court held that the conveyance from Donnelly to Rye was in effect a mortgage to secure a usurious loan; that the deed to Davis was a conveyance in fee simple, and not a mortgage; that Kendall, having induced Davis to purchase the lots, was estopped to insist upon the illegality of the consideration. Decree was entered accordingly, from which Kendall appealed.

Judgment reversed and cause remanded.

J. D. Conway and Dan W. Jones for appellant.

The bond for title being unambiguous must be construed according to its terms. 39 Ark. 560. The rent is a mere subterfuge to cover interest. 53 Ark. 345; 47 Ark. 287; 53 id., 271; ib. 454. The act of 1887, p. 50, is retrospective, and applies to all usurious contracts. 53 Ark. 271; ib., 454. Being usurious, Kendall should have judgment for $ 280 paid under a usurious contract. 41 Ark. 331.

OPINION

HEMINGWAY, J.

The court, found, in accordance with the evidence, that the equitable title to the land was in Kendall, and that Davis's grantor held the legal title as security for a usurious loan. But it found that Davis was induced by Kendall to make the purchase, and we find no evidence to support this finding. The contrary is distinctly stated by Davis, who in his deposition says that he never spoke to Kendall on that subject until after he made the purchase. He nowhere indicates that he made the purchase in reliance upon anything done or said by Kendall, and the evidence is conclusive that he did not. As he purchased from one who...