Thompson v. Grace

• Decision Date: 31 May 1909
• Citation: 120 S.W. 397
• Parties: THOMPSON v. GRACE.
• Court: Arkansas Supreme Court

120 S.W. 397

THOMPSON v. GRACE.

Supreme Court of Arkansas.

May 31, 1909.

Appeal from Yell Chancery Court; Jeremiah G. Wallace, Chancellor.

Suit by John Grace against J. S. Thompson. Decree for complainant, and defendant appeals. Affirmed.

This was a suit by appellee against appellant (defendant below) and wife, and E. G. Collier, to foreclose a mortgage given by appellant and his wife to appellee on certain lands, and also what was known as the "Post Dispatch Printing Plant." On the 14th day of October, 1908, the defendant Thompson and Collier filed answer, admitting the execution of the note and mortgage to appellee, Grace, but allege that the printing plant was sold to Thompson by Jacoway without authority; that John H. Page, from whom Jacoway bought the plant, had no authority to sell same; that Thompson has been greatly damaged; that the sale of said property in its present condition of title will work a great sacrifice to the defendants, in that, without the cancellation of the title outstanding against the property, it will be sacrificed for want of bidders. They allege the printing plant to be the property of the Post Dispatch Publishing Company, a corporation, and ask that the Post Dispatch Publishing Company, John H. Page, and H. M. Jacoway be made parties defendant; that their answer be taken as a cross-complaint against Jacoway and Page; that on final hearing the sale from Jacoway to Thompson be rescinded for failure of consideration; and that Jacoway and Page be decreed to pay off the mortgage debt to appellee, Grace, and that note and mortgage given by Thompson to Jacoway be also canceled. Depositions were taken, and on the day of the trial oral proof was heard, which was reduced to writing, and duly made a part of the record. On the 22d day of October, 1908, the day the cause was set for hearing, plaintiff (appellee) filed an amended complaint, in which in addition to certain allegations (in substance the same as those in the original complaint) he alleged that said J. S. Thompson mortgaged all the property of the Dardanelle Post Dispatch Publishing Company; that said Thompson was not the owner of said Post Dispatch Publishing Company, and that he had no right to convey same, but in fact he was the owner of 104 shares of stock in said Post Dispatch Publishing Company of the face value of $25 per share, aggregating $2,600, the entire stock of said publishing company being $3,000; that said mortgage was a lien on said stock, or shares of stock, of said Thompson, or an equitable assignment thereof; that by the sale of said Post Dispatch by the said Jacoway to Thompson the said Jacoway intended to convey all his interest to the said Thompson, whether it consisted of stock or otherwise of such company, and such likewise were the intentions of said Thompson when he executed to plaintiff the mortgage sued on, and prayed that the said 104 shares of stock be sold, etc. Defendant (appellant), answering the amended complaint, denies that said Thompson bought the stock of the said Post Dispatch Publishing Company, but alleges that said Jacoway sold to, and delivered to, him (Thompson) the whole of the personal property mortgaged, and took the mortgage (to himself), and induced him to execute the said mortgage to Grace, the said defendant at the time believing that he was acquiring title thereto, and, if he fails to secure the full amount of said property, that it will endanger the rights of said Collier, who is a surety on said notes, by requiring him to pay a larger sum than he agreed or is legally bound to pay. Other parties owning shares were made parties, but their rights are not involved here. The court overruled the motion of appellant (defendant) to make the Post Dispatch Publishing Company, H. M. Jacoway, and J. H. Page parties. Then the court made the following findings and decree: "That defendant Thompson is the owner of 104 shares of stock of said Post Dispatch Publishing Company of the nominal value of $25 per share; that said Thompson transferred his said shares for value to plaintiff, John Grace, and undertook to incumber same with a mortgage lien by executing a mortgage on the physical property of the Post Dispatch Publishing Company, which the courts finds, and so finding decrees, constitutes an equitable mortgage on the shares of said J. S. Thompson in favor of the plaintiff as security for said debt; that the shares so designed and intended to be incumbered for the debt due Grace had in fact never been issued to Thompson, but that he is entitled to have said shares issued to him upon his demand and by otherwise complying with the law; that said mortgage operated as an equitable transfer by said...