Graysonia-Nashville Lumber Co. v. Saline Development Co.

Hart, J., (after stating the facts). (1) The conveyance by the plaintiff company to the Nashville Lumber Company of the timber on the Barefield land was a conveyance of an interest in the lands themselves. Liston v. Chapman & Dewey Land Co., 77 Ark. 116; Collins v. Bluff City Lbr. Co., 86 Ark. 202; Indiana & Arkansas Lbr. & Manufacturing Co. v. Eldridge, 89 Ark. 361. (2-3) In the case of Stephans v. Shannon, 43 Ark. 464, the court held: “A vendor of land who has parted with the legal title, has, in equity, a lien on the land for the tmpaid purchase money, as against the'vendee and his privies, including subsequent purchasers with notice;' and a subsequent purchaser is affected with notice of all recitals in the title deeds of his vendor, whether recorded or not.” To the same effect, see Wilson v. Shocklee, 94 Ark. 301; Green v. Maddox, 97 Ark. 398; Miller v. Mattison, 105 Ark. 201. See, also, Gaines v. Summers, 50 Ark. 322, where it is held: “A person purchasing an interest in lands, ‘takes with constructive notice of whatever 'appears in the conveyances 'constituting his chain of title. ’ If .anything appears in such conveyances ‘sufficient to put a prudent man on inquiry, which, if prosecuted with ordinary diligence, would lead to actual notice of some right or title in conflict with that he is about to purchase, it is his duty to make the inquiry, and if he does not make it, he is guilty of bad faith or negligence, ’ land the law will charge him with the actual notice he would have received if he had made it.” ■So, too, in the case of Swan v. Benson, Admr., 31 Ark. 728, it was held that a vendor’s lien for purchase money is solely a creature of equity, and does not depend upon stipulation or contract, and a purchaser with notice is bound by it. It was .also further held that knowledge that part of the purchase money remains unpaid is sufficient notice. In the application of these well settled principles of law, it may be said that the plaintiff company in equity had a lien on the timber for the unpaid purchase money against the Nashville Lumber 'Company and subsequent purchasers, with notice. The defendant company having purchased the timber on the Barefield tract from the Nashville Lumber Company, was' required to take notice of everything recited in the deed from the plaintiff company to the Nashville Lumber Company. The deed from the plaintiff company to the Nashville- Lumber Company recited that $5,298 in cash was paid at the time of the execution ,and delivery of the deed. It also provided that the remainder due, if any, was to be payable as the cutting of the timber proceeded at the rate of $2 per thousand feet. The deed was referred to in the contract which had been executed between the plaintiff company and the Nashville Lumber Company, and the contract was referred to in the deed. By an examination of this contract the defendant company could readily have ascertained that an estimate had been made of the amount of the timber upon the land, land that the cash payment was based upon that estimate, and that both parties to the contract recognized that this estimate was too low, and that an additional ¡amount wias to be paid as the timber was cut. If the defendant company had pursued with ordinary diligence the inquiry suggested by the deed from the plaintiff company to the Nashville Lumber Company, it would have led to actual knowledge of the equities of the plaintiff company. Moreover, the evidence shows that the general manager 'and the treasurer and land man of the defendant 'company had actual knowledge of the facts in the case, and their knowledge, under the circumstances, was imputable to the defendant company. See Carter v. Gray, 79 Ark. 273. Another reason for upholding the finding of the chancellor is that the undisputed evidence shows that the transaction was fair and reasonable ¡and absolutely free from fraud. It is true that A. C. Ramsey was a large stockholder in the plaintiff company, but Doctor Toland was the largest stockholder in that company, and acted for it. W. W. Brown was the president of the defendant company ¡and vice president of the Nashville Lumber Company during the time Ramsey was general manager. He stated that he knew Ramsey had purchased the timber on the Barefield land and approved of the purchase. The deed from the Nashville Lumber Company to the defendant company recites a consideration of $3 per thousand feet, and it is ¡admitted by the defendant company that this was a reasonable price. The deed from the plaintiff company to the Nashville Lumber Company recites a consideration of $2 per thousand feet. The president of the defendant company knew that Ramsey had purchased the timber in question for tbe benefit of tbe defendant company .and -approved of tbe purchase. The company proceeded to -out the timber off -of the land ¡and -accepted all the benefits of the -contract. Under these circumstances it -ought not to 'hold to the fruits of the purchase, and not be ¡bound -by the terms thereof. See, Thompson on Corporations (2 ed.), v-ol. 2, -sections 1241, 1242; Cook on Corporations (7 ed.), vol. 3, § 662. The -only remaining question to be disposed of is whether or not the chancellor erred in his finding as to the amount of timber cut from the 1-amd. A good deal of .testimony was taken on this -point, but we do not -think any useful purpose -could be served by -setting it out in detail and commenting upon it at length. We -deem it sufficient to say that we have carefully and patiently read the testimony bearing -on thi-s phase of the -oas-e, and -are of the opinion that the finding of the -chancellor i-s- not against the preponderance of the 'evidence. Therefore, -under the well ¡settled rules of t-hi-s court, his finding must be upheld. We are of the opinion that the finding -of the chancellor upon the whole ease was correct, and the decree will be affirmed.