Schichtl v. Home Life & Accident Company

• Decision Date: 05 October 1925
• Docket Number: 140
• Citation: 275 S.W. 745,169 Ark. 415
• Parties: SCHICHTL v. HOME LIFE & ACCIDENT COMPANY
• Court: Arkansas Supreme Court

275 S.W. 745

169 Ark. 415

SCHICHTL v. HOME LIFE & ACCIDENT COMPANY

No. 140

Supreme Court of Arkansas

October 5, 1925

Appeal from Pulaski Chancery Court; John E. Martineau, Chancellor reversed.

Decree reversed and cause remanded.

Mann & McCulloch, for appellant.

John M. Rose, for appellee.

MCCULLOCH C. J. WOOD, J., dissents.

OPINION

MCCULLOCH, C. J.

This is an action instituted by appellee in the chancery court of Pulaski County against appellants, J. N. Schichtl and his wife, Annie Gertrude Schichtl, to enforce an asserted lien against certain real estate in the city of Little Rock, the legal title to which is in Mrs. Schichtl and constitutes her homestead. There was a decree in favor of appellee declaring a lien on the property in question, and an appeal has been prosecuted to this court from that decree.

The facts as established by the preponderance of the evidence, though in some instances disputed, are as follows: Prior to the acquisition, in the year 1922, of the property in controversy, the Schichtls resided in Lee County, Arkansas, and J. N. Schichtl was the owner of two large tracts of farm land, one containing about six hundred acres, known as the Sullivan place, and the other containing something over 1100 acres known as the Highland place. Schichtl purchased the Sullivan place in August, 1919, from J. K. Sullivan, the then owner, for the price of $ 40,000, and paid $ 10,000 cash and executed three equal notes, payable annually, for the remainder of the purchase price and executed a mortgage on the land to secure the notes. These notes were sold and transferred by Sullivan to appellee. About the same time Schichtl purchased the Highland place, which adjoins the Sullivan place, the purchase price being $ 28,500, and he paid all of it except $ 5,000, a mortgage being given to secure a note for that amount, and that note was also sold and transferred by the holder to appellee.

Both of the tracts of land in question were operated as farms, a portion of each being in cultivation. Both of the farms fronted on the Mississippi River and were in the route of the levee constructed and maintained by the St. Francis Levee District. In the year 1920 the board of directors of the St. Francis Levee District, in accordance with a proposed plan to extend and enlarge the levee along the Mississippi River in the southern part of Lee County, instituted statutory proceedings against Schichtl to condemn a right-of-way through the lands referred to, and Schichtl was made a party to, and notified of, the proceedings, but appellee as the holder of the mortgage notes referred to above was not made a party and was not given any legal notice of the proceedings. There was involved in the condemnation proceedings forty-seven acres of the Highland place and twenty-six acres of the Sullivan place, and there was an award of damages in favor of Schichtl in the gross sum of $ 19,570.66, of which the sum of $ 5,665.75 was for the value of the lands taken from the Sullivan place, and the remainder was for the value of lands taken from the Highland place. A check for the gross amount was delivered by the Levee District to Schichtl on March 8, 1922, and he deposited the check to his own checking account in a bank in Marianna with which he had been a depositor for many years.

On March 29, 1922, the property in Little Rock, which consisted of a lot and a residence building, was purchased and title taken in the name of Mrs. Schichtl. The price of the property was $ 7,000, which was paid by a check drawn by J. N Schichtl on the funds deposited to his own credit in the Marianna bank--the deposit which consisted of the check from the St. Francis Levee District. Schichtl and his wife moved to Little Rock immediately and established their homestead on the property in question and have so occupied it continuously since that time. Nothing had been paid on either of the principal notes held by appellee, but Schichtl had paid interest amounting to $ 4,100, having borrowed that sum from the bank at Marianna where this deposit was made, and the funds thus borrowed were repaid to the bank out of the deposit referred to above. It is also undisputed that Schichtl expended about $ 9,000 in permanent improvements on the two farms mentioned, some of it on one place and some of it on the other. At the time of the deposit of these funds in the bank at Marianna the Schichtl notes owned by appellee were in the hands of the bank for collection, and the bank officials had, at the direction of the appellee, been importuning Schichtl for payment. The officials of the bank, as well as the agent of appellee in Little Rock who had charge of these collections, were apprised of the pendency of the condemnation proceedings instituted by the St. Francis Levee District against Schichtl, but no steps were taken by appellee to assert its lien on the lands sought to be taken or to arrest payment of the funds to Schichtl. The testimony shows, however, that Schichtl promised to make a substantial payment to appellee out of the funds to be paid by the St. Francis Levee District on the award. This was not done, however, and the money was used by Schichtl for other purposes, namely, for the making of improvements on the places, the...