Neely v. Black

• Decision Date: 08 October 1906
• Citation: 96 S.W. 984
• Parties: NEELY v. BLACK.
• Court: Arkansas Supreme Court

96 S.W. 984

NEELY v. BLACK.

Supreme Court of Arkansas.

October 8, 1906.

Appeal from Circuit Court, Little River County; James S. Steele, Judge.

Action by K. B. Neely against W. A. Black. From a judgment in favor of defendant, plaintiff appeals. Reversed and remanded.

J. T. Cowling, for appellant. O. T. Wingo, B. J. Stuart, and L. A. Byrne, for appellee.

BATTLE, J.

K. B. Neely brought this action against W. A. Black on a promissory note executed by the defendant to the Creston Loan & Trust Company for the sum of $400, and assigned by the payee to plaintiff, alleging that the note was unpaid. The defendant answered and admitted that he executed the note, and alleged that the payment of the note was secured by a mortgage on lands in the county of Adair and state of Iowa, executed by himself and wife; that "at the time of its execution defendant was indebted to one J. R. Barcroft of Iowa in the sum of $636, evidenced by a note then past due; that immediately preceding the 28th day of March, 1900, defendant and Barcroft agreed upon a settlement in which Barcroft agreed to take said land at $30 per acre and in payment therefor to surrender said note of $636 and assume and pay the note and coupons sued on herein; that after computing interest, these amounts overpaid, by $38, the sum to be paid for the land, and that the defendant thereupon paid that amount to Barcroft in cash and executed and delivered to him a deed to the land subject to the mortgage and debt due to the Creston Loan & Trust Company; that during the year 1900, and in conformity with his said undertaking, Barcroft paid off the note to the Creston Loan & Trust Company, both principal and interest, and, colluding with the plaintiff to defraud the defendant and compel him to pay the note twice, he procured the Creston Loan & Trust Company to indorse the note in blank without recourse and surrender it to him in order that it might be used in pursuance of an agreement between plaintiff and Barcroft as a basis for this suit. He denied that plaintiff is an innocent holder and the owner of the note, and that he paid value therefor before maturity, and averred that Barcroft furnished the money to pay to the Creston Loan & Trust Company, that plaintiff never had any interest therein. Defendant further stated that he is a citizen of Little River county, Ark.; that plaintiff is a citizen of Iowa, in which state the land is situated; that Barcroft purchased the land subject to the mortgage or deed of trust and assumed the payment thereof; that Barcroft, or his legal representatives, are in possession of the land and the rents and profits thereof; that the land is worth greatly in excess of the note sued on, and is locally accessible to plaintiff, but, by reason of the conspiracy and understanding between Barcroft and plaintiff to defraud defendant, plaintiff refused to proceed against the land, well knowing that if he should attempt to do so it would be made to appear that the money paid to the Creston Loan & Trust Company was furnished by Barcroft and plaintiff had no valuable interest therein; that defendant is willing and ready to pay on the note any balance remaining after a sale of the land, if it should be made to appear that plaintiff was entitled thereto; that, if this suit proceeds to judgment and defendant has to pay the judgment, he will be without any adequate remedy to protect his rights and subject the land to the payment of the debt.

"Prayed that the matter be transferred to equity, that plaintiff be required to surrender and cancel the note, or, if, in the opinion of the court, plaintiff has any legal and pecuniary interest in the note, that he be required to prosecute and exhaust his claim against the land before proceeding in this action."

Plaintiff replied to defendant's answer and denied that Barcroft assumed or agreed to pay the note sued on or that the same was paid by him or any one else, and that there was any fraud or collusion in the purchase of the note, or that any part of the purchase money was furnished by Barcroft; and alleged that he purchased and paid for the note with his own money, in good faith, and before the maturity thereof.

There are only two issues in the case, and they are: Did Barcroft assume the payment of the note? Did he pay it and cause it to be transferred or assigned to another?

The note is payable to the order of the Creston Loan & Trust Company, on the 1st day of April, 1903, at its office in Creston, Iowa, and was assigned by the payee to plaintiff without recourse upon it.

Plaintiff testified that he authorized J. R. Barcroft...