Cramer v. Remmel

HART, J., (after stating the facts). (1-2) In Manchester v. Goeswich, 95 Ark. 582, it was held that the essential elements of a bona fide purchase of land are three, viz: a valuable consideration, the absence of notice, and the presence of good faith. In Moore v. Morris, 118 Ark. 516, the court held that the mere fact that there is a holding under a quitclaim deed does not defeat the claim of an innocent purchaser. The court said: “That fact is merely considered as a circumstance in determining whether or not the purchaser was in fact innocent of knowledge of any adverse claim, but the purchaser may show, notwithstanding the form of conveyance, that he was in fact without any information of any other claim of ownership.” See also The Henry Wrape Co. v. Cox, 122 Ark. 445. Tested by these principles of law, as applied to the facts of the present case, we think the decision of the chancellor was correct. (3-4) In the foreclosure suit of the Desha Bank & Trust Company against Quilling, the chancellor held that the conveyance by Myrtle Kimberlin to Henry Thane, trustee, was intended as a mortgage and upon appeal to the Supreme Court the decree of the chancellor was affirmed. Desha Bank & Trust Co. v. Quilling, 118 Ark. 114. Neither Remmel nor Cramer were parties to that suit, and of course are not bound by the decree in that case. However, the record in the present case shows the transaction to-have been intended as a mortgage. The Desha Bank & Trust Company furnished the Quillings one thousand dollars with which to purchase the interest of Myrtle Kimberlin. It was agreed that the deed should be made direct from Myrtle Kimberlin to Henry Thane, as trustee for the bank. The deed was intended as security not only for the purchase price of one thousand dollars but for the other indebtedness of the Quillings to the bank. M. W. Quilling, Jr., was to have charge of the sale of the lots and Thane was to execute deeds to the purchasers as directed by Quilling and to receive the purchase money and credit it on the indebtedness of the Quillings to the bank. This was done in the present case. Quilling made the sale to Remmel .and in writing directed the deed from Thane to he delivered to him. It is true the deed was a quitclaim one, but Remmel paid full value for the lots and the amount so paid by him was credited on the indebtedness of the Quillings to the Desha Bank & Trust Company. The legal title to the lots was in Henry Thane and Remmel paid full value for them in ignorance that there was any other claim to the lots. He testified that he thinks that Cramer went with him and Quilling to the bank to have the deed from Thane to the lots turned over to him. It is true Cramer denies any active participation in the sale to-Remmel, but the record shows that he knew Remmel was purchasing the lots and paying full value for them. During the period of the negotiation Cramer received a letter from his attorney at Stuttgart stating that he thought that the title to the lots was in Henry Thane. Other letters written by Cramer during the negotiation tencls to show that he knew that Remmel was trying to purchase the lots. He admits that he stated after the sale had been completed that he told Remmel that he thought his title to the lots was good. In explanation he states, however, that he was relying upon information given him by his attorney at Stuttgart before the sale was completed and that he afterwards made an investigation on his own account and came to the conclusion that Remmel’s title was inferior to his own. Cramer contends that it was the intention of Remmel and himself to purchase all the lots owned by the Quillings at Stuttgart and to sell them for their joint benefit; thatRemmel declined to go further with the transaction after he had completed the purchase of the lots in question and acted in bad faith with him. That was a collateral transaction, and we have nothing to do with it in the decision of the present case. We think the record shows that Remmel was a bona fide .purchaser of the lots in question and-paid for them all that they were worth. He testifies positively that he did not know of the claim of Cramer to the lots. He purchased the lots at the instance of Quilling, and neither Quilling nor Cramer ever disclosed to him that Cramer claimed any interest in the lots. It is true that the written contract between Quilling and Cramer relative to the purchase of the lots by Cramer was executed before Remmel purchased the lots, but this contract was not of record, and, as we have already seen, Remmel purchased the lots without knowing anything about its existence. There was a perfect record title in his grantor, and under the circumstances of this case he will be deemed to be an innocent purchaser and protected as such although he took from his grantor by a quitclaim deed. Case v. Caddo River Lbr. Co., 126 Ark. 240. No notice of the pendency of the case was filed in accordance with the 'statute in the foreclosure suit of the Desha Bank & Trust Company against M. W. Quilling, Jr., and Mrs. Maude P. Quilling. Therefore, Remmel had a right to rely upon the record title, notwithstanding the pendency of this suit in the Arkansas Chancery Court. In the case of The Henry Wrape Co. v. Cox, 122 Ark. 445, the court said: “The common law and equity rule of lis pendens has been abrogated in this State by statute. Since the passage of the statute a suit affecting the title or any lien on real estate is not lis pendens until a notice of the pendency of the action is filed in accordance with the statute.’-’ The decree will be affirmed.