Less v. English

• Decision Date: 06 May 1905
• Citation: 87 S.W. 447,75 Ark. 288
• Parties: LESS v. ENGLISH
• Court: Arkansas Supreme Court

87 S.W. 447

75 Ark. 288

LESS v. ENGLISH

Supreme Court of Arkansas

May 6, 1905

Appeal from Lawrence Circuit Court FREDERICK D. FULKERSON, Judge.

Affirmed.

STATEMENT BY THE COURT.

On the 1st day of May, 1893, the appellant, Isaac Less, applied to Michael English for a loan of $ 4,500, and on that date, in order to secure the same, executed and delivered to English nine notes, each in the sum of $ 500, payable two years after date, with interest at the rate of 10 per cent. per annum and a deed of trust to M. D. Baber on lot 1 and north half of lot 2, in block 26, and lot 7, in block 17, in the town of Walnut Ridge. The deed of trust was executed by Isaac Less his wife, Gussie Less, and M. D. Baber; was delivered to Baber on the date it was executed, and was filed for record on May 11, 1903, in the recorder's office of Lawrence County. English, at the time of the delivery of the mortgage advanced Less $ 2,000 on the loan. He did not at the time have the rest of the money, and told Less he thought he could get it, and let him have it about the 20th of July. He was unable to obtain the money in July, and at once notified Less, and procured Mr. John K. Gibson, of Powhatan, to arrange for a loan for English for the additional $ 2,500. English offered to allow Less to return the money he advanced him without interest, or to credit his mortgage with the $ 2,500 which he was unable to obtain, so as to enable Less to place a second mortgage on the property. Less declined to accept either offer, but insisted upon a cancellation of the notes and the forfeiture of the amount so advanced by English.

On January 31, 1894, English filed a bill in the United States Circuit Court for the Western Division of the Eastern District of Arkansas against Isaac Less and Gussie Less to foreclose the mortgage on account of the failure and refusal of Less to comply with certain conditions contained in that instrument. On January 24, 1896, a decree of foreclosure for the amount advanced Less by English, with interest thereon was entered, from which an appeal was prayed to the United States Circuit Court of Appeals. The decree was reversed by a divided court on a jurisdictional question. The proceeding was subsequently dismissed.

Isaac Less brought suit, on August 29, 1898, in the Lawrence Circuit Court, to recover damages which, he alleged, he sustained on account of a breach of contract by Michael English in failing to advance him $ 4,500, for four notes and a deed of trust to M. D. Baber for said English, he (said English) having only advanced $ 2,000 of said $ 4,500.

To this English, who was a nonresident, filed an answer and cross bill on March 13, 1899. In the answer he denied the damages and in the cross bill he asked for foreclosure of the deed of trust, and a decree for $ 2,000 and interest on said four notes. The notes were payable two years from date, and bore interest at the rate of 10 per cent. per annum from date until paid. The property described in the deed of trust included that claimed by the appellant Gussie Less.

The deed of trust shows no credits thereon. The cross bill prayed that Gussie Less be made a party defendant, and for a decree as to her as well as Isaac Less. No summons was issued as to her. M. D. Baber was not made a party.

Less filed his answer to this cross-complaint, setting up in recoupment damages as claimed in his original complaint; also set up the defense that the contract to loan him $ 4,500 and his execution of his nine notes and deed of trust was an entire and indivisible contract, and that, as English had failed and refused to perform his contract, he (English) could not maintain an action upon the nine notes and deed of trust; and that if he (English) had any cause of action against him, it would be for money had and received, and that said action would be barred by limitation; and also that said notes were delivered to M. D. Baber in escrow, and that same had not been delivered to English under the terms of the delivery to Baber.

The case was transferred to equity.

On December 4, 1901, Gussie Less filed a petition as intervener. She set up ownership of the land in controversy through various parties who claimed through Isaac Less since execution of the mortgage. She alleged that Berger and herself had been in the actual adverse possession of the premises for the period of five years, and pleaded the statute of limitations. She also alleged therein that there had been no credits on the margin of the record of mortgages within five years next after the maturing of the notes set forth in said deed of trust under which English claimed, and pleaded the statute of limitations as to this deed of trust. And she adopted the answer of Isaac Less to the cross bill. She prayed that no relief be extended to the appellee under the deed of trust as to said property against her.

English filed two answers to this petition, one denying that Gussie Less was the owner of the lots, or that she held adverse possession thereof; the other, that he did not know anything about the sale of said property under execution or the sale to Pauline Less, and therefore denied the same, and asked strict proof; and that if they were made, they were fraudulent as to the creditors of Isaac Less, including himself.

At the September term of Lawrence Circuit Court, 1901, a decree was entered, denying the relief prayed by Less and foreclosing the mortgage for the amount of the loan that had been advanced by English to Less, with interest, from which an appeal was prayed.

Affirmed.

W. E. Beloate and Morris M. Cohn, for appellant.

The trustee and beneficiary were necessary parties. 2 Jones, Mortg. 1384. The conveyance by Less to his wife was not fraudulent. 68 Pa.St. 297; 108 N.C. 651. A conveyance is fraudulent only as to a party who is in a position to assail it. 45 Oh. St. 184; 65 Me. 195; 3 La.Ann. 58; 31 Pa.St. 241; 52 Ark. 171; 89 Mo. 319; 80 Mo. 504; 50 Am. Rep. 510; Bump, Fr. Con. 451; 100 Pa.St. 59, 165; 104 Pa.St. 222; 46 Me. 438; 53 Ill. 275; 48 Mo. 344. The debt is barred. 33 Ark. 151; 30 Ark. 340; 34 Ark. 547; 48 Ark. 312; 23 Ark. 362; 50 Ark. 340; Tyler, Ejec. 865; Sand. & H. Dig. § 5094; 66 Ark. 204; 65 Ark. 1; 64 Ark. 305, 317. It was error to authorize execution or garnishment against Mrs. Less' property. 66 Ark. 113; 65 Ark. 121; 35 Ark. 365; 39 Ark. 238; 29 Ark. 351.

W. E. Beloate, for Isaac Less, appellant.

Before appellee can obtain any right under the contract, he must fulfill his contract. 65 Ark. 320; 64 Ark. 228; 7 Ark. 121; Bisp. Eq. 375; 22 N.Y. 217; 13 John. 359; 8 Cow. 63; 20 N.Y. 486; 22 N.Y. 462; 25 N.Y. 272; 61 Ark. 312; 13 John. 94; 38 Ark. 102; 28 Ark. 387; 9 Ark. 501; 12 N.E. 495; 21 N.Y. 398; 45 N.Y. 162; 21 Ark. 95; 52 Ark. 246.

J. M. Moore and W. B. Smith, for appellee.

The instrument was delivered as security for the loan. 9 Ark. 36; 5 Ark. 377; 52 Ark. 493. The plaintiff cannot recover damages by reason of his own want of diligence. Suth. Dam. 149. No cause of action for damages accrued to Less. 9 Exch. 341; 48 Ark. 509; 53 Ark. 443; 54 Ark. 24; 77 Ill. 161. The contract for the erection of the house was collateral, and not directly connected with the contract with English. 7 Hill, 68; 7 Cush. 517; 52 S.W. 580; 57 Ark. 207; 36 Ark. 524; 21 Ark. 433; 45 Am. Rep. 121; 3 Wash. 68. Damages for prospective rents could not be recovered. 58 Tex. 456; 63 Texas, 386; 34 C. C. A. 452; 92 F. 499; 85 F. 476. The statute of limitations is no defense. 49 Ark. 248; 65 Ark. 491. The suit was instituted in due time. 53 Ia. 367; 17 F. 301; Bennett, Lis Pen. § 157; 24 Ark. 352; 37 La.Ann. 771; 49 N.C. 206; 37 N.H. 447; Angell, Lim. 486; 36 Ia. 582; 17 Kan. 13; 68 Ark. 257, 348; 9 Wheat. 499.

OPINION

WOOD, J., (after stating the facts.)

The issues between appellee and Isaac Less, and between appellee and Gussie Less are different. We will therefore treat them separately.

First. The contract evidenced by the notes and deed of trust was not indivisible, as assumed by learned counsel for appellants. Excerpts from the deed of trust applicable here are as follows:

"Whereas, the said Isaac Less is justly indebted to the said party of the third part in full sum of $ 4,500, which is evidenced by nine notes of even date herewith for the sum of $ 500 each, each of said notes being payable on or before two years after date, and bearing 10 per cent. interest from date," etc.

"Now, if said Isaac Less, his heirs, executors or administrators, shall pay the sum of money specified in said nine promissory notes, with all the interest that may be due thereon, when the same shall become due and payable according to the tenor and effect thereof, and shall faithfully keep and perform the agreements aforesaid, and concerning the payment of taxes aforesaid, then this deed shall be void, and the property hereinbefore conveyed shall be released at the expense of said party of the first part; but if default be made in the payment of said promissory notes, or either of them, or the interest thereon, according to the tenor and effect thereof, or in the faithful performance of said agreement to keep said edifices insured and pay all taxes lawfully imposed on said properly, then, and in that event, or either of them, the whole of said indebtedness, and each and all of said notes, shall become due and be considered due and payable as if due and payable according to the tenor thereof, and this deed shall remain in full force and effect, and the said party of the second part may proceed to sell the said property hereinbefore described, or so much thereof as may be necessary to fully satisfy and discharge the said indebtedness, together with all interest thereon."

There were nine notes, each in the following form: "$ 500.00.

"On...