Wade v. Texarkana Building & Loan Association

• Decision Date: 10 October 1921
• Docket Number: 147
• Citation: 233 S.W. 937,150 Ark. 99
• Parties: WADE v. TEXARKANA BUILDING & LOAN ASSOCIATION
• Court: Arkansas Supreme Court

233 S.W. 937

150 Ark. 99

WADE v. TEXARKANA BUILDING & LOAN ASSOCIATION

No. 147

Supreme Court of Arkansas

October 10, 1921

Appeal from Miller Chancery Court; James D. Shaver, Chancellor affirmed.

Decree affirmed.

Jones & Head, for appellants.

The contract of purchase automatically became null and void when payments were sixty days behind, and all payments made were forfeited as rents. 48 Ark. 413; 54 Ark. 16; 87 Ark. 593; 76 Ark. 578; 139 Ark. 60.

John W Welch had no authority to collect payments. 49 Ark. 320; 96 Ark. 456. No one has the right to trust to mere presumption of authority, nor to the mere assumption of authority of an agent. 62 Ark. 33; 92 Ark. 315. He must ascertain his authority. 117 Ark. 173; 105 Ark. 111. An agent who is employed to solicit orders and make sales of goods not in his possession has no implied authority to require payment therefor. 100 Ark. 360; 101 Ark. 68. The existence of an agency cannot be established by proof of the acts and declarations of the agent. 122 Ark. 357; 131 Ark. 197; 126 Ark. 405. The authority of an agent cannot be proved by the mere fact that he exercised the authority. 53 Ark. 208; 105 Ark. 446.

The covenant of general warranty runs with the land. 31 S.W. 200; 11 Cyc. 1170; 37 S.W. 455; 67 S.W. 405; 54 Ark. 195; 79 Am Dec. 463; 11 L. R. A. 176. Parol evidence is admissible to show the consideration paid for the purpose of affecting damages. 54 Ark. 195; 71 Ark. 497.

A purchaser of land in another's possession takes with notice of equities existing against the title. 76 Ark. 25.

Arnold & Arnold, for appellee.

There was a waiver of forfeiture by continuing to accept payments. 87 Ark. 593; 139 Ark. 60; 142 Ark. 300.

Measure of damages is not limited by the benefit of the breach to the party making it. 54 Ark. 195.

OPINION

WOOD, J.

On the 7th day of April, 1921, Frank Mosley and M. C. Wade entered into the following contract:

"I hereby make application for lots 12 and 13 in block 3 in Iron Mountain Addition to Texarkana, Arkansas, at the price of $ 425, payable $ 10 per month without interest, except after maturity, and all past due payments to draw 10 per cent interest. It is agreed that I am to get general warranty deed when I have paid amount due in full. It is understood and agreed that when payments are sixty days behind, this contract is null and void, and all payments made shall be forfeited as rents."

M. C. Wade and B. H. Kuhl were the owners of the lots described, and Wade, in entering into the above contract, was acting for himself and Kuhl. The Iron Mountain Addition was a negro settlement. John W. Welch, a negro, was employed by Wade and Kuhl to sell lots for them and to receive and turn over to them contracts of sale made by him with purchasers of lots, and to collect the first payment. The sales he made were subject to the approval of Wade and Kuhl. The contracts, when entered into, were to be signed by Wade and returned by Welch to the purchaser.

The above contract was consummated in this manner. Following the printed matter on the sheet were blanks to be filled in, showing the particular date and amount of each payment. All of the payments made under the above contract were made to Welch. Of the amounts paid Welch he turned over to Wade and Kuhl the sum of $ 317.50. Mosley testified that he made other payments to Welch which were not turned over by him to Wade and Kuhl, and these payments were indorsed on the contract, which brings the total amount of the payments made by Mosley as shown by the indorsements to $ 412.50. The last of the these indorsements was made July 15, 1919. Mosley made a further payment to Welch as shown by a receipt dated April 24, 1920, of $ 30, making a total of $ 442.50 paid as purchase money by Mosley to Welch on the lots under the contract above mentioned.

According to the testimony on behalf of Wade and Kuhl, all the payments under the contract matured in 1915. Mosley never complied with the terms of the contract, but the vendors continued to receive payments under it long after maturity of the contract. In November, 1919, there being still a considerable sum due, the vendors elected to declare the contract of sale void and to treat the payments as rents, and on December 1, 1919, they sold the lots mentioned to John W. Welch, executing to him a warranty deed for the same in which the consideration mentioned was $ 425. John W. Welch actually paid them the sum of $ 142.20. Kuhl testified concerning this transaction as follows: "We deeded the lots to John W. Welch, without figuring the interest on the deferred payments, for practically what was due on the contract at the time he purchased. We took his representation for it. He claimed that Mosley had left the country; was down in South Texas or somewhere, and his wife was here in bad circumstances; and we told him at the time that the contract was void because the time had elapsed, and we declared it now void, and we wanted him to go ahead and sell it to some one else. He begged because I think he said Mosley's wife was his cousin, and asked if I would allow him to preserve the woman's equity in the property by paying the balance and deeding it to him, and let him in turn deed it to her, and I said I would under the circumstances. * * * The sum of $ 142.20 paid by John W. Welch was the balance due at the time of the contract, without figuring the interest on deferred payments." Mosley went into possession of the lots soon after the contract for the purchase thereof was entered into, and made improvements thereon, and has since continuously occupied the same with his family as a home.

On January 16, 1920, the Texarkana Building & Loan Association took a mortgage from John W. Welch on certain properties, including the lots mentioned, to secure a note for $ 2,525, representing the amount of money which the association had loaned Welch.

This suit was instituted by the Texarkana Building & Loan Association and the trustee in the mortgage against John W. and Mattie Welch, his wife, to foreclose the mortgage. Mosley intervened, and set up that he was the owner of the lots in controversy under his contract of purchase above mentioned, which he alleged had been fully executed on his part by the payment of the purchase money. He alleged that he had no knowledge of the warranty deed executed by Wade and Kuhl to John W. Welch, and that the same was executed by the parties to it by collusion and with a fraudulent intent to defeat him of his rights of title to the property; that the grantees, Welch and wife thereafter executed a mortgage or deed of trust to the Building & Loan Association conveying the lots in controversy with a fraudulent intent also to deprive him of his title; that the association and its trustee, Sanderson, were cognizant of and charged with notice of Mosley's equity in the lots. He prayed that his title to the property be declared and vested in him.

The Building & Loan Association answered the intervention of Mosley, setting up the deed from Wade and Kuhl to Welch and wife and the mortgage from Welch and wife to it, and asked that the same be foreclosed. It is also alleged that, if Wade and Kuhl breached their contract with Mosley by conveying the lots in controversy to Welch, it was entitled to recover of Wade and Kuhl the sum of $ 425, the amount of the consideration named in the warranty deed from them to Welch, because it had relied upon said deed in making the loan to Welch. It also set up that Mosley had forfeited his contract with Wade and Kuhl. It prayed that the intervener take nothing; that Wade and Kuhl be made parties, and that, in the event it be adjudged that Mosley was the owner of the lots, it have judgment against Wade and Kuhl for breach of warranty of their deed to Welch in the sum of $ 425, the consideration named therein. Wade and Kuhl were made parties, and they also answered the intervention of Mosley, denying all of its allegations, set up the contract mentioned, and claimed that Mosley had forfeited his right as purchaser thereunder, and that they had declared such forfeiture and had treated the contract as one of rental, and had declared the same null and void as to Mosley, and had conveyed the property by warranty deed to Welch. They also answered the cross-complaint of the Building & Loan Association and the trustee in the mortgage, denying its allegations, and setting up that they had executed a warranty deed to Welch for the actual consideration of $ 142.50, and that the sum of $ 425 mentioned in the deed was not the true consideration. They prayed that the intervention of Mosley be dismissed, and their deed to Welch be confirmed, and for all proper relief.

The above are substantially the issues and the facts upon which the court rendered a decree vesting the title to the lots mentioned in Mosley and divesting the title out of Welch and wife and out of Wade and Kuhl, and also entered a decree in favor of the Building & Loan Association against Wade and Kuhl for breach of warranty in their deed to Welch in the sum of $ 425 with interest at 6 per cent. from January 16, 1920, and also foreclosing the mortgage on the other property mentioned therein. It was shown that the Building & Loan Association derived from the mortgage foreclosure the sum of $ 1,824.35, leaving a balance due it under the decree of $ 618.40. From the decree of the court Wade and Kuhl and Mrs. Kuhl prayed and were granted an appeal.

Both the appellants, Wade and Kuhl, testified that Welch had authority to sell the lots in controversy and to collect the first payment, but they also testified that he had no authority beyond this. But whether Welch had any actual authority to collect...