Ladd v. Bones

• Decision Date: 01 November 1948
• Docket Number: 4-8617
• Citation: 214 S.W.2d 353,213 Ark. 1030
• Parties: Ladd v. Bones
• Court: Arkansas Supreme Court

214 S.W.2d 353

213 Ark. 1030

Ladd v. Bones

No. 4-8617

Supreme Court of Arkansas

November 1, 1948

Appeal from Lincoln Chancery Court; Harry T. Wooldridge, Chancellor.

Affirmed.

Robert A. Zebold, for appellant.

T S. Lovett, Jr., and G. D. Walker, for appellee.

OPINION

Ed. F McFaddin, Justice.

Appellee filed suit to have Mr. E. P. Ladd declared a constructive trustee; and the chancery court so decreed. This appeal questions the correctness of that holding, and also presents the other questions hereinafter discussed.

I. Was Mr. Ladd a Constructive Trustee? Since each case involving a constructive trustee is necessarily to be determined in the light of its own particular facts, we set forth the facts in this case in considerable detail. Caswell Bunton (colored) died intestate in 1924, the owner of the 114 acres of land here concerned. His five children and heirs were all adults, being Sarah Williams, John Bunton, Mary Bunton Smith, Luzelia Bunton, and Eddie Bunton. All the heirs were nonresidents except Sarah Williams and John Bunton. These two undertook to hold the property for themselves and their co-tenants. In addition to State and County taxes, the lands were subject to Improvement District taxes in (a) Cousart Bayou Drainage District, (b) Southeast Arkansas Levee District, and (c) No Fence District No. 2.

Sarah Williams, a Negress -- now over 62 years of age -- was the representative of the other heirs. For several years she paid the taxes and assessments on the lands; but in 1928 and subsequent years the lands became delinquent to the various taxing agencies. In 1933, Cousart Bayou Drainage District purchased the lands at its foreclosure sale for the delinquent assessments of 1928, 1929 and 1930 in that district. The Levee District and the No Fence District likewise foreclosed and purchased for their delinquent assessments. The lands also forfeited for the State and County taxes of 1929 and 1930. Although the time for redemption had expired, it was the policy of the Cousart Bayou Drainage District -- and apparently also the policy of the other districts -- to show the delinquent landowners all possible leniency.

That Sarah Williams was trying all the time to save the lands is shown by ample evidence. On November 9, 1936, Sarah went to see Mr. A. F. Triplett of Pine Bluff, who was the attorney for the Cousart Bayou Drainage District, to discuss with him the delinquencies on this land. Mr. Triplett agreed with her that the Cousart Bayou Drainage District would settle all of its delinquent items -- including the foreclosure sale and the purchase title -- for the sum of $ 400. Then Sarah went to see Mr. Walter White to obtain a loan from him in order to save the lands. Mr. White professed inability to make the loan, but agreed to consult Mr. E. P. Ladd to see if he would advance Sarah the necessary money.

Mr. White did see Mr. Ladd; but Mr. White and Sarah Williams have entirely different understandings as to what Mr. White reported to Sarah. Sarah testified that she understood, from what Mr. White told her, that Mr. Ladd would clear up all the tax delinquencies, and would hold possession of the land until the rents repaid him all of his expenditures for taxes, improvements and interest; and then he would return the land to Sarah for herself and her brothers and sisters. Mr. White testified that Sarah wanted Mr. Ladd to have the land for the delinquent taxes, rather than for some other person to obtain the land. At all events, Sarah remained on the land until Mr. White wrote her a note on January 11, 1937, reading: "Sarah: You can go ahead and move if you want to. Mr. Ladd has paid everything off on the 114 acres of land. So you can rest easy now, and Johnnie will have to pay rent if he stays there." Sarah moved from the land after receiving this note, and Mr. Ladd took charge and remained in possession thereafter.

Mr. Ladd's acquisition of the legal title was accomplished by obtaining a deed ^[*] to him from the Cousart Bayou Drainage District on January 9, 1937, and then using that title as a basis for redeeming from the forfeiture to the State, and also for redeeming from the forfeitures to the Levee District and the No Fence District. In short, it was the acquisition of the legal title from the Cousart Bayou Drainage District by deed dated ^[*] January 8, 1937, that made it possible for Mr. Ladd to redeem from the other taxing agencies.

As previously stated, Mr. A. F. Triplett was the attorney for the Cousart Bayou Drainage District. Mr. Triplett testified of his conversation with Sarah, prior to Mr. Ladd's deed: "I told Sarah Williams at all times that the Drainage District did not want to see any property owner lose his property for taxes, and that we would do everything within reason to prevent such a result, including the acceptance of partial payment and the granting of any reasonable period to pay the amount due."

In response to the question, "Under what terms of agreement, if any, was this property conveyed to Mr. Ladd by the district?", Mr. Triplett said: "Mr. Ladd came to my office somewhere around the 1st of January, 1937, and offered to buy the district's title to the Bunton property for $ 400. He stated that he was making the offer upon behalf of the Buntons and would deed the property back to them if they paid him back his money. The district had a great deal more than $ 400 in the property; but since I had tried repeatedly to get the Buntons to redeem without any payment whatever being made, and since I had received the information that members of the family other than Sarah Williams, and especially John Bunton, had been advised that he could beat the drainage tax, and since the annual tax on this property was approximately $ 100, and Mr. Ladd stated that he was buying it on behalf of the owners, and since the property had been sold to the district since March 6, 1933, I concurred with the Board in the view that it would be better to accept the $ 400 and get the property back on the tax books. I therefore closed the deal with Mr. Ladd on the basis of $ 400 on January 9, 1937."

Mr. Triplett further said: "There could have been no question in the minds of either Mr. Ladd or myself as to the terms upon which he was buying the property."

Sarah testified that in 1939 she asked Mr. Ladd about the place; and that he said that he still lacked $ 500 of having all of his money, but that he had the place rented for 1940 and 1941, and that he said, "All I want is my money." In December, 1941, Sarah again went to see Mr. Ladd; and she testified that he then told her, for the first time, that he was claiming the property as his own. In March, 1942, this suit was instituted to have Mr. Ladd declared a constructive trustee. As previously stated, the Chancery Court held that Mr. Ladd was a constructive trustee, and the question now under consideration is whether that holding is correct.

We have a vast number of cases involving attempts to have the holder of a legal title held to be a constructive trustee. In some of the cases, the trust was declared; in others, it was denied. The question here is, on which side of the line this case falls. Each side cites many other cases, but we list the following as typical. Appellant says the facts here are more similar to cases like Ammonette v. Black, 73 Ark. 310, 83 S.W. 910; Spradling v. Spradling, 101 Ark. 451, 142 S.W. 848; and LaCotts v. LaCotts, 109 Ark. 335, 159 S.W. 1111; in each of which the trust was denied. Appellee says that the facts in the case at bar are more similar to cases like Strasner v. Carroll, 125 Ark. 34, 187 S.W. 1057, Ann. Cas. 1918E, 306, and Holman v. Kirby, 198 Ark. 326, 128 S.W.2d 357, in each of which the trust was declared.

After careful consideration, we reach the conclusion that this case is more similar to the latter cases than the former; and that the Chancery Court was correct in decreeing the trust. Sarah Williams retained possession until assured that Mr. Ladd had the deed, and...