Raines v. Graham
| Decision Date | 29 March 1902 |
| Citation | 69 S.W. 551,70 Ark. 490 |
| Parties | RAINES v. GRAHAM |
| Court | Arkansas Supreme Court |
Appeal from Jackson Circuit Court in Chancery, FREDERICK D FULKERSON, Judge.
Reversed.
STATEMENT BY THE COURT.
On the 22d day of June, 1891, Louisa Graham, being the owner of lots 11 and 12 in the town of Tuckerman, Arkansas, and the improvements thereon, executed on that date a note for $ 500 to E. V. Raines, and also executed a mortgage of her lots to secure the note. The note and mortgage were signed by Louisa Graham and J. E. Graham, her husband, and were due and payable twelve months after date. In December, 1891, Raines transferred the note and mortgage to J. P. Kelley, and, the note not being paid at maturity, Kelley afterwards, in December, 1892, sold the property under a power of sale contained in the mortgage, and had a third party to buy the same in for himself. Afterwards, in June, 1893, Mrs. Graham filed a complaint in equity, alleging that the note and mortgage to Raines were executed without consideration, and that Kelley had notice of that fact at the time the note and mortgage were transferred to him. She therefore prayed
In July, 1893, the defendant Kelley filed his answer, denying the material allegations of the complaint and alleging that the note was sold and assigned to him by Raines, before it was due, for a valuable consideration, and that he was an innocent purchaser without notice of any defense thereto. The prayer of his answer was that the complaint "be dismissed, and that he have a decree for the possession of the land, and for further relief." Afterwards in June 1898, Kelley, by leave of court, amended his answer by adding thereto the following words: "But if it be found that from any cause the sale of said property is invalid, then this defendant prays that his answer be taken as an answer and cross complaint, and that he have judgment for the amount of his debt with interest and costs, and that his lien be foreclosed against said property."
The defendant Raines also filed an answer, denying the allegations of the complaint and stating that the note and mortgage had been transferred to Kelley.
On the hearing the chancellor found "that no consideration passed to Mrs. Graham for the note sued on, and that Kelley had notice of that fact, and he further found that the note and mortgage were void, and that the sale made by Kelley under the mortgage was void. He therefore decreed that the sale be set aside, that the note and mortgage be canceled and that plaintiff recover her costs. Defendants appealed.
Judgment reversed and cause remanded.
Phillips & Campbell, for appellant.
This court will reverse a chancellor's decree if it is against the evidence. 43 Ark. 307. Appellant Kelley was a purchaser for value of the Graham note. Norton, Bills & Notes, 294; 48 Ark. 454; 65 Ark. 210. Even had the note been accommodation paper, and he had notice thereof, such would not have been a defense against him. Norton, Bills & Notes, 175; 65 Ark. 547. The sale to him was regular and valid. 55 Ark. 168. The act of April 15, 1893, cured any defect in the acknowledgment.
Gustave Jones, for appellee.
The sale was invalid because the land was in one county and the appraisers were appointed in another. Sand. & H. Dig., § 5112. It was also irregular for Kelley, an interested party, to conduct the sale. 40 Ark. 276; 23 Ark. 622. The mortgage is invalid because not properly acknowledged. 33 Ark. 722, 726. The conveyance was inoperative to convey a homestead. 66 Ark. 382, 385.
RIDDICK, J., (after stating the facts.)
This is a suit in equity to cancel a...
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... ... Grimley, 77 Mich. 273, 43 ... N.W. 932 ... In ... Ellenbogen v. Griffey, 55 Ark. 268, 18 S.W ... 126, and in Raines v. Graham, 70 Ark. 490, ... this court held that a failure to comply with this statute ... with reference to foreclosure sales of land under ... ...
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