Kline v. Ragland

• Decision Date: 01 May 1886
• Citation: 14 S.W. 474
• Parties: KLINE v. RAGLAND.<SMALL><SUP>1</SUP></SMALL>
• Court: Arkansas Supreme Court

Page 474

14 S.W. 474

KLINE v. RAGLAND.¹

Supreme Court of Arkansas.

May Term, 1886.

Appeal from circuit court, Yell county; B. D. GRANGER, Special Judge.

Facoway & Facoway, for appellant. Geo. B. Denison, for appellee.

COCKRILL, C. J.

At the time the mortgage which the bill in this case seeks to foreclose was executed, the mortgagor was not the owner of the fee in the mortgaged premises. He had contracted, by bond for title, with the person who was seised of the fee to purchase the lands upon the payment of $800. Of this sum $600 had been paid by his wife to the vendor, out of money given her by her father for the avowed purpose of purchasing a home for her and her children. It was in pursuance of this purpose that the purchase was made, and the money paid. The bond for title, however, bound the vendor, by its terms, to execute a deed to the husband, upon the payment of the residue of the purchase money, and he executed his notes for the deferred payments. By this arrangement the husband became the apparent equitable owner of the land, subject to the vendor's lien for the unpaid purchase money; but, in fact, an equity arose in favor of the wife to the extent of the purchase money paid by her, and would have arisen in toto on full payment, to have a trust declared and enforced in her favor against the husband and the vendor. This is the established equitable rule, where an estate is purchased in the name of one person, and the consideration paid by another. Tied. Real Prop. § 500. The whole question in such cases is one of intention. And so when the husband pays the purchase money, and takes the conveyance in the name of his wife, the presumption that he intended it as a gift is raised from his obligation to provide for her, and there is therefore no presumption of a trust. Milner v. Freeman, 40 Ark. 62; Ward v. Estate of Ward, 36 Ark. 586; Gainus v. Cannon, 42 Ark. 503. On the other hand, where the deed is taken in the name of the husband, the purchase money being paid by the wife, no presumption of an intention to make a gift arises, but there is a resulting trust in favor of the wife, and the husband holds the property thus acquired as trustee for her benefit, unless he is able to overcome the presumption by establishing a different intention. Cunningham v. Bell, 83 N. C. 328; Thomas v. Standiford, 49 Md. 181; Loften v. Witboard, 92 Ill. 461; Moss v. Moss, 95 Ill. 449; Catherwood v. Watson, 65 Ind. 576. When it is shown that she intended the purchase for herself, and made the cash payment of the purchase money from her separate means, the fact that the husband takes the conveyance to himself, and executes his individual notes for the unpaid purchase money, does not defeat the trust that arises in her favor to the extent of the payment made by her. Cunningham v. Bell, supra; Keller v. Keller, 45 Md. 269; Hopkins v. Carey, 23 Miss. 58. The burden is still upon the husband to repel the presumption of the trust. Wales v. Newbould, 9 Mich. 45-64; Keller v. Keller, supra.

This was the wife's attitude towards the premises in question when the husband executed the mortgage in this case. It is not even shown that she knew that her husband was the obligee in the title-bond. The mortgagees were cognizant of all the facts. The money which had been paid upon the execution of the title-bond was paid by them to the vendor of the land in behalf of the wife. It had been deposited with them by her father, with instructions that it should be paid out on her order, for the purpose of providing a home for her and her children, and they knew that was the object of the purchase. The money was paid to the vendor in the wife's presence, and by her direction, and the title-bond was at that time, or shortly thereafter, placed in the mortgagee's safe for safe-keeping. They are not then in the attitude of innocent purchasers, but took the premises subject to the wife's equity. Harris v. Brown, 30 Ala. 401. The wife appears, however, to have abandoned the intention if she ever entertained it of causing the purchase to be completed by payment out of her separate estate. The residue of the purchase money was paid by the husband out of his own means. Money was advanced to him by the mortgagees for that purpose. The amount paid in discharge of the notes executed by him at the time of purchase was one-fourth of the purchase price. To the extent, then, of a one-fourth interest, the wife's equity did not attach. The husband's creditors could have subjected the interest thus acquired by him to the payment of his debts, (Hill v. Bugg, 52 Miss. 397; Hearn v. Lander, 11 Bush, 669; Tharp v. Tharp, 3 Metc. Ky. 372,) and a mortgage made by him while the title was in the condition described bound his interest, and vested in the mortgagees the right to subject it, upon foreclosure, to the payment of the mortgage debt.

Before the bill was filed, however, to foreclose the mortgage, the vendor of the land, who held the naked legal title, executed a deed to the husband and wife jointly, in pursuance of instructions received from them to that end. What led to the apparent change of ownership to the husband and wife jointly, we are not informed, and the wife has not complained of the character of the conveyance. The effect of it, according to the case of Robinson v. Eagle, 29 Ark. 202, was to vest in the grantees an estate in entirety. But the mortgagees' rights had become fixed by the mortgage before the execution of the deed, and it could not have the effect of discharging the lien that bound the husband's interest. The parties to that deed could do nothing that would deprive the mortgagees of recourse on that interest. As between themselves, the husband and wife were seised of an estate in entirety in the whole property, but the wife acquired no interest superior to the mortgage in that part of the premises of which the husband was the true owner. The husband, however, acquired a new interest in so much of the land as he had previously held in trust only. That, as we have seen, was a three-fourths interest in the whole. Title acquired to lands by the grantor after his conveyance, passes to the vendee, by virtue of the statute in this state, in all respects as if the same title had been in the grantor at the time of the conveyance. Crittenden v. Johnson, 14 Ark. 463; Jones v. Green, 41 Ark. 369; Horsley v. Hilburn, 44 Ark. 458.

We have no reported case in which the statute has been held to apply to a mortgage, but, as the mortgage is with us, as at common...