Matthews v. Stevens

• Decision Date: 10 March 1924
• Docket Number: 225
• Parties: MATTHEWS v. STEVENS
• Court: Arkansas Supreme Court

259 S.W. 736

163 Ark. 157

MATTHEWS v. STEVENS

No. 225

Supreme Court of Arkansas

March 10, 1924

Appeal from St. Francis Chancery Court; A. L. Hutchins, Chancellor reversed.

STATEMENT OF FACTS.

H. L Matthews brought this suit in equity against E. E. Stevens to redeem 160 acres of land, and to that end seeks to have an absolute deed of conveyance to the land declared to be a mortgage.

H. L Matthews was the original owner of the land, and had executed a mortgage on it to Huestess Bros. to secure an indebtedness approximating $ 1,500. Huestess Bros. had demanded payment of their mortgage, and had threatened to institute proceedings in court to foreclose it. On the 11th day of June, 1917, H L. Matthews conveyed the land to E. E. Stevens by an absolute deed, and at the same time the parties entered into a written agreement with reference to the land, which is as follows:

"This memorandum of agreement between E. E. Stevens and H. L Matthews witnesseth:

"H. L. Matthews being the owner of the northeast quarter of section twenty-three, in township five north, range one east, and the said property being about to sell under mortgage foreclosure, and he being unable to borrow any money to pay off the said mortgage or to sell his interest in the said property for anything of value, because the mortgage debt amounts to the present value of the land.

"Now, upon the payment of the mortgage debt by E. E. Stevens I have made to him a deed, in consideration that I may redeem the said property on any day prior to November 1, 1918, upon the payment to E. E. Stevens of the amount paid out by him in satisfaction of the mortgage debt, any advances made me by the said E. E. Stevens before said date, any improvements made by the said Stevens on said place, any taxes paid by said Stevens, with interest on each of said items from their date at ten per cent. per annum.

"Witness our hand at Forrest City, June 11, 1917.

"E. E. STEVENS.

"H. L. MATTHEWS."

On the 15th day of June, 1917, E. E. Stevens and his wife executed a mortgage on said land to S. E. Bradshaw for the sum of $ 1,500. The money thus borrowed by Stevens from Bradshaw was used to pay off the mortgage indebtedness of Matthews to Huestess Bros.

H. L. Matthews was the principal witness for himself. According to his testimony he had made arrangements with Mr. Bradshaw to borrow the money from him with which to pay off the mortgage indebtedness to Huestess Bros. A contention arose between them with reference to cutting timber on the land, and Bradshaw refused to make the loan to Matthews. Matthews then induced Stevens to take a deed to the land and mortgage it to Bradshaw for the purpose of securing $ 1,500 with which to pay off said mortgage indebtedness. The substance of the testimony of Matthews is that the deed from himself to Stevens, although absolute in form, was intended as a mortgage to secure Stevens for the amount of the mortgage indebtedness from Matthews to Huestess Bros., which Stevens should pay off for him. On November 1, 1918, Matthews went to Stevens and offered to pay him the amount which he admitted to be due on the land, and demanded a deed back from Stevens. Stevens refused the tender, because the amount was not large enough.

W. E. Huestess was also a witness for the plaintiff. According to his testimony, he had authorized his attorney to commence foreclosure proceedings against Matthews because, on account of the boll weevil and other things, he thought the price of the land was going down, and the land was mortgaged for about its value. On November 1, 1918, he went with Matthews to Stevens for the purpose of redeeming the land. He was to furnish the money for Matthews, and had the amount which Matthews regarded necessary for redeeming the land. Stevens claimed that there was an additional amount due, which Matthews refused to pay, so that the land was not redeemed. Stevens had been in possession of the land from the time Matthews executed the deed to him on the 11th day of June, 1917, and had continued in the possession of it after the offer of Matthews to redeem it on the 1st day of November, 1918. After this time Stevens rebuilt the fences around the place and replaced a rail fence with a wire fence. He also cleared fifty acres of land, and did quite a lot of ditching.

There is a conflict in the testimony as to the cost of building the fences, digging the ditches and clearing the land. Stevens also paid the taxes on the land. Other testimony will be stated or referred to in the opinion.

The chancellor was of the opinion that the deed from Matthews to Stevens to the land was a mortgage, and decreed a foreclosure of the mortgage for the amount which he found to be due thereunder. Both parties have prosecuted an appeal to this court.

Decree reversed.

W. A. Singfield, for appellant.

The court erred in rejecting the statement introduced by appellant and accepting that introduced by appellee. 1 R. C. L. 210. In the absence of proof showing fraud, mistake or error, the parties are concluded by the account stated. 41 Ark. 502; 53 Ark. 155; 13 S.W. 592; 68 Ark. 534; 60 S.W. 420; 85 Ark. 217; 107 S.W. 674; 29 L. R. A. (N. S.) 340. It is the duty of an agent to account for money of his principal received by him. 21 R. C. L. 832; 25 Ark. 219. Where a mortgagee makes repairs that are not necessary to preserve the estate, he is not entitled to compensation for them. 52 Ark. 381; 147 Ark. 611; Jones on Mortgages, § 1127; 52 Ark. 381; 147 Ark. 611.

Mann & Mann, for appellee.

It is a general rule of law that a deed is presumed to be of the character shown in the instrument, and that a deed absolute upon its face would not be construed to be a mortgage unless the presumption of law is overcome by evidence which is clear, unequivocal and convincing. 75 Ark. 551; 88 Ark. 299; 106 Ark. 583; 128 Ark. 67. For the purpose of ascertaining the true intention of the parties, all of the circumstances connected with the transaction should be taken into account, including the circumstances of the parties at the time, the property conveyed, and its value, and the written and oral agreements between the parties, and also the acts and declarations of both parties at the time the transaction was had. The adequacy of the price has been recognized as being of great weight in the consideration of this class of cases. 13 Ark. 112; note 20 A. & E. Ann. Cas. 1199. The real criterion is the existence or the nonexistence of a debt or liability between the parties, which might be enforced against the person making the deed. 75 Ark. 551; Jones on Mort. 265. A contract to release his right of redemption for an adequate consideration can be enforced. 139 Ark. 469. The delay of three and one-half years in itself would constitute laches in this case. 55 Ark. 85. When it is deemed unjust for either party to prevail because he has by his conduct done those things which might be regarded as waiving his rights, or has put the other party in a situation where it would not be reasonable to place him if the remedy were to be asserted, the doctrine of laches should be applied and the remedy barred. 86 Ark. 591.

OPINION

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

It is well settled in this State that...