McIver v. Roberts

• Decision Date: 16 March 1914
• Citation: 165 S.W. 273
• Parties: McIVER et al. v. ROBERTS et al.
• Court: Arkansas Supreme Court

165 S.W. 273

McIVER et al. v. ROBERTS et al.

Supreme Court of Arkansas.

March 16, 1914.

Appeal from Little River Chancery Court; Jas. D. Shaver, Chancellor.

Suit by Prince Roberts and another against H. M. McIver and others. From a decree for complainants, defendants appeal. Reversed and remanded, with directions to dismiss the complaint.

This suit was instituted by appellees against the appellants to set aside a warranty deed executed by appellees to McIver and Hamm, and also to set aside a deed from McIver and Hamm to Mary I. Garland.

The appellees alleged that the deeds were fraudulent and executed for the purpose of cheating the appellees out of their land. The appellees alleged that they were the owners of the land in controversy, and that they had mortgaged the same to the Colonial & United States Mortgage Company for the sum of $1,500; that an interest note of $130 was due on the mortgage, and appellees applied to McIver for a loan of $70 to pay this interest note; that McIver agreed to loan appellees the money and to take a mortgage on the land to secure the payment of this interest note in the fall; that appellees were illiterate, and that McIver prepared a paper and represented same to appellees to be a mortgage on appellees' land, and that appellees, believing same to be a mortgage, executed and delivered the same to McIver, and received from him the $70, to be repaid in the fall, with $30 interest; that in October following appellees discovered that the paper executed by them was a deed to McIver and Hamm, which recited as a consideration $1; that on the 29th of October, 1910, McIver and Hamm had conveyed the same land to Mary I. Garland for the sum of $1,500 in cash and the assumption by her of the mortgage to the Mortgage Company; that the deed executed by McIver and Hamm to Garland was fraudulent, the consideration thereof being fictitious, and that nothing had been paid thereon; that appellees at the time said deed to Mary I. Garland was executed were in the actual possession of the lands, and that Mary I. Garland was charged with notice thereof. The appellees tendered the amount found to be due McIver and Hamm, and prayed that the deeds which they exhibited be canceled.

The appellants McIver and Hamm answered, admitting that the title to the lands, at the time of the deed from appellees to them, was in appellants; admitted that appellees applied to McIver to borrow money, but denied that McIver loaned them the money, and denied that McIver agreed to take a mortgage on the land to secure an advance of $100, or any sum; denied that the appellees were illiterate; denied the other allegations of the complaint, and set up that the appellees, on June 4, 1910, were owing $130 past-due interest on a loan to the Mortgage Company on the land in controversy; that the loan itself was due, and appellees had applied for an extension of the loan; that it was agreed between the appellees and the Mortgage Company that the loan should be renewed on the payment of past-due interest with expenses; that appellees applied to McIver for a loan sufficient to pay this interest and the expenses to be incurred in bringing the abstract down to date and renewing mortgage, and that McIver refused to loan them the money; that appellees sought the money elsewhere, but were unable to procure it; that appellees again sought to obtain the money from McIver, and that he agreed with appellees that if they would execute renewal mortgage to the Mortgage Company, and convey to him and Hamm the land in controversy, that he and Hamm would assume the mortgage and pay in cash the accrued interest, with the expenses incident to the new loan, and give the appellees the use of the land free of rent for the year 1910, together with an option to purchase the place until October 1, 1910; that the appellees well knew that they were parting with their title to the land, subject to this option; that they failed to avail themselves of the option, and never sought to exercise the same until long after October 1, 1910, and after McIver and Hamm had sold the land to Mary I. Garland; that the deal with Mary I. Garland was executed in good faith for the consideration named in the deed to her.

Mary I. Garland answered, alleging substantially the same matters as set up by McIver and Hamm, and further alleging that she was an innocent purchaser for value for the consideration mentioned in the deed executed by McIver and Hamm to her. She also set up that appellees knew that she was inspecting the lands for the purpose of purchasing the same and stood by without asserting any claim to the property adverse to McIver and Hamm, and that appellees were therefore estopped from asserting any title as against her.

McIver was a local agent of the Colonial & United States Mortgage Company, hereinafter called the Company, and he was collecting for it. The Company held a mortgage executed by Roberts and his wife on the land in controversy to secure the debt of $1,500, which was past due. The Company had agreed to extend the time of payment and to allow appellees to renew the mortgage if Roberts would pay the interest due, amounting to $135. The land was the homestead of the Roberts, where they had lived for 30 years. McIver had interceded with others to aid appellees by advancing the interest for them who had refused. The Company was threatening to foreclose if this interest was not paid. In this extremity, after exhausting every other resource, Roberts appealed to McIver for a loan of the money to pay the interest. Roberts had sold a mule for $60 and only needed $75 more.

Prince Roberts was an illiterate negro. His wife could sign her name. Roberts had known McIver ever since the latter's childhood, and had every confidence in him. Roberts relates what took place between him and McIver as follows: "I went to McIver and told him I had gotten up $60 of the money, and that was all I could get; asked him if he could help me out for the balance. He said: `Prince, I haven't got the money. You and your wife come up tomorrow and I will help you out.' I explained to him why I wanted the money. The next day we came in, and Mr. McIver asked if my wife had come. He wrote out the mortgage and told me to go get the money, and I got it. He counted it and said: `You see it is all right.' He told me to carry it to Mr. Schuman and to tell him to give him credit for it, and he would send draft, and I would get a receipt when they got his draft. When I turned this money over to Mr. McIver — the $60 I had sold the mule for — he prepared a mortgage, and I carried it down to Mr. Schuman and signed it. Mr. McIver did not read the paper over to me, but told me to take it to Mr. Schuman. When I took this paper and signed and acknowledged it, I understood it to be a mortgage on my land. Nobody read or explained it to me. When I signed the paper, I gave it to McIver. Mr. McIver was to take the money I gave him and furnish the balance and pay the interest to the Loan Company. I left it to him. I was to pay this money back to Mr. McIver the 1st of October, 1910, with interest. I went up there the 1st of October, 1910, to pay Mr. McIver, but he was not in his office. On the 29th of October I went up there to pay it, and told Mr. McIver I had come to pay off the note. He said: `You didn't comply with your contract, and I have sold the land.' Dr. Hamm was present when McIver prepared the paper which I signed. In the first conversation Mr. McIver told me he didn't have the money, but would try to borrow it, and in the second conversation he told me he would arrange to get part of the money from Dr. Hamm. I signed the paper to secure Mr. McIver for the money I was borrowing from him. If I had known the paper was a deed, I would rather have been hung than sign it. I had no information from any source before I signed it that it was other than a mortgage. After I borrowed this money from Mr. McIver and gave him this paper, I renewed the mortgage to the Colonial & United States Mortgage Company, and Mr. McIver fixed it up and took my acknowledgment. I never got a receipt from the Loan Company for the amount of the interest. I didn't have Mr. Schuman to read the paper, because I had confidence in Mr. McIver, and thought he would do the right thing. I haven't sufficient understanding if it was read to me to know what it meant; I have to take the word of the party for it. McIver told me he was taking a second mortgage on the land when we made the trade. No one was present when he told me this. I was trying my best to get the money from the time it was due; went to every place I knew to get it. Mr. McIver didn't explain to me that I was selling him the land; didn't tell me that he would give me the refusal of it until October 1st."

Judge Steele, a witness for appellees, testified that, having been employed by Roberts to bring this suit, he saw McIver and went to make a tender of the money due him. McIver said he had let Prince Roberts have $100 to pay interest on his loan, and Prince had given him a deed to the land; that he had given Prince until the 1st day of October to pay back the $100; that he didn't pay it back at that time, and for that reason he had forfeited the right to the land; that after the 1st of October he (McIver) had sold the land to another party; that the matter was then out of his hands, and could not be settled without a lawsuit. McIver did not tell witness that he had agreed to hold the land until October 1, 1910, and that after that he (McIver) was at liberty to sell it.

Witness L. B. Anderson testified that he had a conversation with McIver with reference to the transaction between himself and Prince Roberts. McIver said Prince came to him to get money to pay this mortgage, and that he had told him that he would loan him the money if he would give him a deed to the land. He finally agreed to let him have the money, and gave him until the 1st of October to pay it....