Lindsey v. Hornady

George Rose Smith, J. This controversy is between rival purchasers of 150 acres of timberland, formerly owned by the nineteen heirs of T. A. Neely. The chancellor ruled in appellee Hornady’s favor in this action to quiet his title to the land. The appellants contend that the chancellor erred in refusing to sustain their claim to an undivided nineteen forty-seconds interest in the property. The facts are best stated in chronological order. In early July, 1946, both Hornady and the two appellants were negotiating with the Neely heirs for the purchase of this timberland. On July 10 Hornady made an oral contract with four of the heirs, by which he agreed to buy the property for $3,500. This agreement was subject to these conditions: (a) That the other adult heirs agree to the sale; (&) that Hornady institute probate proceedings for the sale of the interest of the nine minor heirs; (c) that Hornady be the successful bidder at the probate sale; and (cl) that after the conveyance Hornady reconvey the land without the timber to Henry Neely, one of the heirs, for $1,000. Thus in effect the appellee agreed to buy the timber for $2,500, and Henry Neely agreed to buy the land for $1,000. Hornady prepared a warranty deed to be signed by all the adult heirs. Four of them signed and acknowledged it on July 10. The deed was then left in the custody of a notary public, with the understanding that the other adult heirs would come in and sign it if they agreed to the sale. The notary was not authorized to deliver the deed to the grantee; on the contrary, after every one had signed he was to deliver it to one of the grantors, who was to retain it until the sale was completed and the consideration paid. On July 20 all the other grantors except Henry Neely called at the notary’s office and signed the deed. Thus the matter stood until early in September, when Carl Neely became dissatisfied with what he considered to be the slow progress of the probate proceedings. He borrowed the deed from the notary and in company with appellant Lindsey submitted it to his attorney, T. S. Lovett, Jr., for an opinion as to whether he was bound by his oral agreement with Hornady. Mr. Lovett advised Neely and Lindsey that the oral contract was unenforceable and that Neely was free to sell to the appellants if he wished. Acting on that advice Carl Neely conveyed his interest to the appellants, who promptly recorded the deed. Between then and September 21 several other Neely heirs also became dissatisfied and sold their interest to appellants. By these deeds the appellants acquired the nineteen forty-seconds interest they now assert. Hornady was the highest bidder at the probate sale and received the guardian’s deed on September 24. In October Henry Neely signed the original deed and it was delivered to Hornady, who then conveyed the land to Henry Neely with a reservation of the timber. Checks for the purchase price were sent to the various heirs, but those who had already sold to the appellants refused to accept the tender. Hornady then brought this action against the appellants to quiet his title and to cancel the deeds to them. By cross-complaint the appellants sought partition. We think Carl Neely’s attorney was right in his view of the law. Although the heirs may have been morally bound by their agreement with Hornady, the statute of frauds rendered the contract unenforceable. The deed itself was the only writing signed by the vendors. To satisfy the requirements of the statute a written memorandum must state the consideration and all other essential terms of the agreement. St. L., I. M. & S. Ry. Co. v. Beidler, 45 Ark. 17. Here the deed recited a consideration of one dollar and made no mention whatever of those terms of the contract having to do with the probate proceedings and the reconveyance to Henry Neely. It was therefore not sufficient to take the agreement out of the statute. To avoid the effect of the statute of frauds the appellee contends that there was a valid deposit in escrow or in the alternative that delivery and passage of title took place when the deed was left with the notary. As to the first contention, a deposit in escrow is effective only if the deed passes irrevocably beyond the grantor’s control. Masters v. Clark, 89 Ark. 191, 116 S. W. 186. Here the notary acted as the grantors’ agent in retaining the deed and was instructed to return it to one of the grantors. These facts also answer the alternative contention; for delivery of a deed to the grantor’s agent, to be held by him until the purchase money is paid, cannot be treated as a delivery to the grantee. American Central Fire Ins. Co. v. Arndt, 129 Ark. 309, 195 S. W. 1075. We conclude that the appellants’ assertion of title to an undivided interest in this land must be sustained. The decree is accordingly reversed and the cause remanded.