Snell v. White

HART, J., (after stating the facts). In Hays v. Emerson, 75 Ark. 554, the court said: “It is insisted, however, that the consideration for the deed being a preexisting debt owing by the grantor to the grantee, the contemporaneous agreement for an immediate resale of the property to the grantor on a credit for the same price, stamps the conveyance as a security for the debt merely, and not an absolute conveyance, regardless of the real intention of the parties. Such is not the law. The contemporaneous agreement for a resale and purchase does not, of itself, make the deed a mortgage. The conveyance must be judged according to the real intent of the parties. If there is a debt subsisting between the parties, and it is the intention to continue the debt, it is a mortgage; but if the conveyance extinguishes the debt and the parties intend that result, a contract for a resale at the same price does not destroy the character of the deed as an absolute conveyance.” This principle was recognized in Wimberly v. Scoggin, 128 Ark. 67, 193 S. W. 264, and in addition the court said: (1) “For the purpose of ascertaining the true intention of the parties, it is a well established rule that courts will not be limited to the terms of the written contract, but will consider all the circumstances connected with it, such as the circumstances of the parties, the property conveyed, its value, the price paid for it, defeasance, verbal or written, as well as the acts and declarations of the parties, and will decide upon the contract and the circumstances taken together.” In both those cases, it was recognized that a conveyance absolute in form is presumed to be a deed, and that to overcome this presumption and to show the instrument to be a mortgage, the evidence, in the absence of fraud or imposition, must be clear, unequivocal and convincing. (2) Tested by these well established principles of law, the decision of the chancellor was correct and must be upheld on appeal. The record sets out the testimony of the parties in full, but it is not practical to set out all the evidence in detail in this opinion. A careful examination of the record, however, shows that Pearce was trying to state the testimony as he recollected it. He stated that in February, 1906, when the land was first conveyed to him that it was not worth more than $2 per acre; that he owned over one thousand acres of other land in that immediate neighborhood and knew their value. His testimony in this respect was not attempted to be contradicted. - When his whole testimony is read together, it is fairly inferable that when the deed of the date of February 15,1906, was executed that he thought the lands in question belonged to John Snell, for he took a deed from John Snell, and George Ann Snell only relinquished dower in the deed. On the same day he executed a written contract with John Snell for a resale of these lands to him and in the contract also embraced other lands of his own. The consideration in the deed to Pearce was $300. In the contract for a resale of the land the consideration was $506, evidenced by the four promissory notes of John Snell. This was a circumstance tending to show that it was not the intention of the parties to consider the transaction as a mortgage from Snell to Pearce. Only forty acres of the lands in question were embraced in this deed. In December John Snell executed a deed to Pearce for the remaining eighty acres. In this deed George Aun Snell relinquished dower. On the 14th day of December, 1906, George Ann Snell executed a deed to Pearce for the 120 acres of land in controversy and the consideration is recited to be $250. It is fairly inferable from all the testimony in the record that it was ascertained by Pearce that the title to the land was in George Ann Snell instead of her husband, and for that reason the last mentioned deed was executed by George Ann Snell. This conclusion is borne out by the fact that Pearce testified that on that day he again agreed to resell the land to John Snell and that a written contract to that effect on the same printed form as the first contract of resale was entered into between them. Pearce said that he made no effort to keep either of these contracts because they had ceased to be of any binding force because Snell had failed to make the payments required; that he only happened to have the first contract because it was among some old papers. According to the testimony of both Pearce and White the Snells began to pay rent in 1910 to Pearce. They continued to pay rent to him until the date of bringing this suit. For the eight years prior to the institution of this action Pearce had been paying the taxes on the land. It does not’ appear that the land had risen in value much until a few years before the institution of this action. It is true this testimony is contradicted to a great extent by the testimony of George Ann Snell and her husband, but they make no attempt to explain why they permitted Pearce to pay the taxes on the land, and to pay rent to JVhite for him. ' Tested by the rule above announced, the chancellor was warranted in holding that the conveyance to Pearce was an absolute deed and was not a mortgage. The plaintiffs forfeited their rights under the contract of sale executed by Pearce by not making the payments required by the contract, and the chancellor was justified in so holding under the evidence. It follows that the decree must be affirmed.