W. B. Worthen Company v. Vogler

• Decision Date: 27 September 1920
• Docket Number: 130
• Citation: 224 S.W. 626,145 Ark. 161
• Parties: W. B. WORTHEN COMPANY v. VOGLER
• Court: Arkansas Supreme Court

224 S.W. 626

145 Ark. 161

W. B. WORTHEN COMPANY v. VOGLER

No. 130

Supreme Court of Arkansas

September 27, 1920

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

Decree reversed and cause remanded.

John F Clifford, for appellants.

1. The oral agreement or promise, even if sufficient to constitute a trust, was void under the statute of frauds, and regardless of the existence of any trust both Worthen Company and Mrs Worthen were innocent purchasers without notice and for substantial value, and (3) that Vogler can not come into equity and admitting the fact that Mr. Worthen had insisted in the previous transaction that his bank would not loan money on the property if he, Vogler, "had anything to do with it," and having stood by and seen a large sum of money loaned Kanis on the property with his consent afterward claim, as against Worthen, that he, Vogler, held the beneficial interest; that Kanis was a mere trustee for him. No trust existed under the facts, as there was no writing. Kirby's Digest, § 3666; Pomeroy, Eq. Jur. (4 ed.), par. 981; 41 Ark. 393; 108 Id. 276; 114 Id. 128; 50 Id. 71. Kanis paid all the purchase money and there was no resulting trust, nor is there evidence sufficient to create a constructive trust. 101 Ark. 459. There is no proof positive of fraud. 73 Ark. 313. If there was only a parol promise, the statute of frauds applies. Ib. 310. There is no allegation of fraud in the record. The facts here are identical with those in 95 Ark. 493. See, also, 109 Ark. 335. There was no trust ex maleficio. 101 Ark. 451; 55 Id. 414.

2. Conceding the promise Kanis made to Vogler to be a valid trust, no notice was given to third parties, and they are not bound. 26 R. C. L. 1362.

3. Vogler has no standing in a court of equity. He did not come into court with clean hands, nor is he willing to do equity, and on his own testimony he is entitled to no relief whatever. Pom., Eq. Jur. (4 ed.), par. 1223, etc.

W. C. Adamson, for appellees.

This case does not fall within the statute of frauds, because this was a sale of lands, but the title was taken in the name of Kanis simply as security for a debt and does not fall within the statute. This case falls squarely within the rule in 109 Ark. 335, but if it did not, on account of being an oral agreement to purchase land for another, it would be enforceable as a constructive trust. 19 Ark. 39; 41 Id. 264; 125 Id. 34. If the grantor or lessor had notice, he would be estopped. 69 Ark. 513. Equity never lends its aid to one who invokes its aid to perpetrate a fraud. 52 Ark. 207.

Vogler did not surrender his right to redeem in order enable Kanis to borrow the money from the bank. The fact that Vogler stood by and permitted Kanis to take the title in his own name and to borrow from the banks does not estop Vogler from contesting the right of appellants to hold the property as innocent purchasers.

Mrs. Mollie P. Worthen is chargeable with whatever notice affected George Worthen and the Worthen Company or Gordon N. Peay. Appellants are not bona fide purchasers, because there was no new consideration and they did not surrender any security. 49 Ark. 214. Appellants are not bona fide purchasers, because they are chargeable with notice, both actual and constructive, of Vogler's rights, as the evidence shows. Equitable mortgages need not be recorded and may be enforced against parties purchasing with notice of them. 37 Ark. 511; 43 Id. 464; 60 Id. 595; 61 Id. 128; 94 Id. 503. One who purchases with notice of another claim is not an innocent purchaser. 77 Ark. 309; 101 Id. 403. The burden of proof is on him who claims the protection as a bona fide purchaser without notice of a prior unrecorded deed. 56 Ark. 537. Where one has sufficient information to lead him to a fact, he shall be deemed conversant with it. 58 Ark. 91. A purchaser of land takes with constructive notice of whatever appears in his chain of title, and, if sufficient appears therein to put him on inquiry, he is charged as if with actual notice. 58 Ark. 322. See, also, 69 Id. 442. Under the evidence it is clear appellants were not innocent purchasers.

OPINION

MCCULLOCH, C. J.

Appellee, Henry O. Vogler, was, prior to the year 1918, the owner of considerable real estate in the cities of Little Rock and North Little Rock, and he mortgaged the same to W. B. Worthen Company, a banking corporation of Little Rock, and the People's Savings Bank, another banking institution, to secure certain debts which at the time of the foreclosure of the mortgages amounted to upward of the sum of $ 40,000. The mortgage to W. B. Worthen Company was prior to the one to the other bank, but both mortgages were foreclosed in the same decree rendered July 1, 1918, directing a sale of the property by a commissioner. The commissioner advertised, in accordance with the directions in the decree, for a sale of the property on July 29, and appellee Vogler attended the sale and bid in the property in separate lots for sums aggregating $ 36,010. The sale occurred at noon on the day mentioned, and the commissioner notified appellee that he must make good his purchase by furnishing security for the purchase price not later than 2 o'clock of that day. Appellee was unable to obtain a surety and forfeited his purchase, whereupon the commissioner put the property up again for sale, and it was bid in by the two mortgagees for the aggregate sum of $ 32,750. Another piece of property embraced in the mortgages and in the decree was not sold at that time by reason of the fact that the commissioner had, by inadvertence, omitted it from the advertisement of sale, but it was subsequently sold by the commissioner, and that particular piece of property is not involved in the controversy between appellee and these appellants.

After appellee had failed to make good his purchase of the property at the sale, he appealed to F. Kanis, an acquaintance of his, to help him in rescuing the property from the sale, and Kanis agreed to help him by signing his bond to secure the purchase of the property. This conference occurred the night after the sale, and the next day they went to the purchasers of the property and requested them to transfer the purchase to appellee and accept Kanis as surety, and lend appellee a part of the purchase price, but each of the purchasers declined to do so. They agreed, however, with Kanis that if he desired to take title to the property they would transfer their respective bids to him and lend him sufficient money to finish paying for the property. They required, however, that he accept the purchase at the original price of $ 36,010 bid by the appellee. Kanis had $ 15,000 of his own money in the bank, and he used this on the purchase and borrowed the balance from the purchasers, the two banking corporations. The purchase was transferred to Kanis by the two purchasers at the sale, and on August 12 the court confirmed the sale as transferred to Kanis, and he paid the purchase price, waiving the terms of credit.

There was at that time some kind of an agreement between Vogler and Kanis that Vogler should have the right to redeem the property by repaying to Kanis the amount he had paid out. There is a slight conflict in the testimony, which, we think, in the view hereafter expressed in this opinion, is immaterial. We may treat it as settled by the evidence that Kanis agreed with Vogler to give him twelve months within which to redeem the property from the former's purchase of it under the circumstances detailed above.

One piece of the property constituted Vogler's home, and he continued to reside there and paid rent to Kanis at the rate of $ 75 per month, with the understanding that if he redeemed the property the rent should be accounted for in the settlement. The remainder of the property fell into the possession of Kanis under his purchase, and Vogler assisted him in attending to the renting of it.

Vogler did not redeem the property, and he paid nothing to Kanis, except the rent on the home place, and on November 23, 1918, Kanis delivered to Vogler a written notice, as follows:

"This is to notify you that after December 10, 1918, your right and privilege for redeeming property from first sale is ended. I will be compelled after that time to dispose of this property.

(Signed)

F. Kanis."

In February, 1919, Kanis sold and conveyed to Mollie P. Worthen one of the Little Rock pieces of property (not the home place) for the price of $ 8,800, and also sold and conveyed to W. B. Worthen Company one of the lots in North Little Rock for the consideration of $ 1,600. On April 7, 1919, Kanis applied to the chancery court of Pulaski County for a writ of assistance against Vogler to obtain possession of the home place which was still being occupied by Vogler, and the...