Strasner v. Carroll

• Citation: 187 S.W. 1057,125 Ark. 34
• Decision Date: 10 July 1916
• Docket Number: 132
• Parties: STRASNER v. CARROLL
• Court: Supreme Court of Arkansas

187 S.W. 1057

125 Ark. 34

STRASNER v. CARROLL

No. 132

Supreme Court of Arkansas

July 10, 1916

Appeal from Pike Chancery Court; Jas. D. Shaver, Chancellor reversed.

Decree reversed and cause remanded.

W. C Rodgers, for appellant.

The transaction is, in equity, at least, a mortgage. Certainly it was not intended as a sale. 13 Ark. 112-117; 96 U.S. 332; 13 Ark. 112-117, 118; 2 J. J. Marsh. 471; 1 Jones on Mortg. § 162, 167, 168. Once impressed with the character of a mortgage, it must so remain. 3 Pom. Eq. (3 ed.), § 1193.

A court of equity will always relieve the mortgagor from the consequences of his failure to perform the condition. 129 Ill. 72; 2 Jones on Mortg., § 1039. An equity of redemption is inseparably connected with a mortgage--the right can not be waived. 96 U.S. 332.

Langley & Steel, for appellee.

1. To constitute an equitable mortgage, there must be some kind of a conveyance by the grantor to the grantee for the purpose of securing an indebtedness. 5 Ark. 321; 3 Id. 364; 75 Id. 551; 37 Id. 308; 38 Id. 264. The deed here was absolute and the burden was on appellant to show that it was intended as a mortgage. 19 Ark. 278; 31 Id. 163; 40 Id. 146.

2. The findings of the chancellor will not be disturbed unless clearly against the preponderance of the testimony. 100 Ark 166.

OPINION

HART, J.

M. L. Carroll instituted an action of ejectment in the circuit court against T. J. Strasner to recover 220 acres of land in Pike County, Arkansas. Strasner filed an answer and cross-complaint and set up substantially the following state of facts:

He owned 300 acres of land in Pike County upon which he resided and mortgaged the same to a bank in Pike County to secure the sum of $ 600 which he owed the bank. The debt of the bank fell due in 1914 and Strasner, failing to make payment, the bank proceeded to foreclose the mortgage. The land was worth much more than the mortgage debt, and in order to prevent a sacrifice of the land it was agreed that Carroll should purchase the land at the foreclosure sale for the amount of the indebtedness due the bank by Strasner and hold the title to the land in trust for the latter until he could repay Carroll the amount bid for the land. Two friends of Strasner were to sign the note for the purchase money given by Carroll as surety, and did so. Carroll became the purchaser at the sale, and the sale was confirmed and a deed executed to him by the commissioner who made the sale. Strasner tendered to Carroll the amount of the debt, principal and interest and requested Carroll to make a deed conveying back to him the land purchased by Carroll at the foreclosure sale. Carroll refused to do this.

The prayer of the answer and cross-complaint of Strasner are that he be permitted to redeem the land, and that the claim of Carroll be cancelled as a cloud upon his title.

Carroll filed an answer to the cross-complaint in which he denied that he purchased the land at the foreclosure sale for Strasner and agreed to hold the same in trust for him. He stated that he purchased the land for himself at the foreclosure sale, but agreed to resell it to Strasner within ninety days if the latter should pay him the amount which he had bid for the land; that Strasner failed to make the payment, and that the sale was confirmed in himself by the chancery court. On motion the case was transferred to the chancery court. The chancellor found the issues of fact in favor of Carroll, and held that he was the owner of the land and entitled to the possession thereof. A decree was entered accordingly and Strasner has appealed to this court. The material facts are as follows:

Strasner owned 300 acres of land in Pike County upon which he resided. He executed a mortgage to the bank to secure an indebtedness due it of $ 600. The bank instituted foreclosure proceedings and obtained a foreclosure decree in the chancery court.

According to the testimony of Strasner, M. L. Carroll, J. C. Couch and Isaac Webb, who were his friends and neighbors, agreed to purchase the land at the foreclosure sale for the amount of the debt due the bank and to hold same in trust for him until he could pay the amount of the indebtedness, principal and interest. Pursuant to this agreement, Carroll became the purchaser of 220 acres of the land at the foreclosure sale for the sum of $ 635, being the amount due on the mortgage debt. Carroll gave his note to the commissioner making the sale, for the purchase money and Couch and Webb signed it as his sureties.

Strasner resided on the lands and was getting out stave bolts and paying a part of the proceeds arising from the sale of them to Carroll to be credited on the mortgage indebtedness. This was pursuant to the agreement he had made with Carroll in the beginning; that ninety days after the land was bid in by Carroll, he had paid to him $ 140 from the proceeds of the sale of stave bolts. The value of the land bid in by Carroll was variously estimated by the witnesses from seven to ten dollars per acre. Most of the witnesses placed its value at ten dollars per acre. Couch and Webb corroborated the testimony of Strasner as above abstracted.

In addition, Strasner testified that if the agreement had not been made with Carroll, who purchased the land, that he had another friend who had the money to buy the land, and who would have loaned him the money for that purpose. He also testified that after he made the agreement with Carroll, he did not try to secure any further bidders, and that it was generally known that the lands were being bid to be held in trust for him.

J. C. Cornish stated that he came to Murfreesboro with the intention of bidding at the sale, but came a day too soon, by mistake, that he had a talk with Mr. Carroll about the sale, and asked him if it was going to be sold in bulk or by forties; that Carroll told him that he thought that he and Strasner had the matter fixed up. Cornish then left and did not stay to the sale.

Two other witnesses testified that Carroll gave Cornish to understand that the matter had been arranged.

M L. Carroll testified in his own behalf. He denied that he entered into an agreement whereby he was to become the purchaser of the land at the foreclosure sale, and hold the same in trust for Strasner. He said that the court would convene about ninety days after the day of sale, and that the sale would then come up for confirmation; that he agreed with Strasner that he would resell the land to him if he would pay him the amount he had bid for the land within ninety days; that if Strasner repurchased the land, the amount derived from the sale of stave bolts was to be...