Watts v. Blair

McCULLOCH, C. J. This case involves a controversy concerning the title to a certain tract of land in Searcy County, formerly owned by H. A. L. Watts, one of the appellants, who conveyed the same to his children, the other appellants, by deed executed September 1, 1909. The lands constituted the homestead of Watts and he and his children, who were grantees in the deed, remained in possession without any visible change in the original possession until the time of the commencement of the present suit, but the deed to the children was never recorded until after appellee acquired an interest in the land, as will hereinafter appear. In the year 1913 Watts executed a note to a local bank to secure a debt for borrowed money and appellee signed the note as his surety. Subsequently he executed another note with Peter Adams and Asa Watts as sureties. Watts defaulted in the payment of both of those notes. When the note on which Adams and Asa Watts were sureties fell due said sureties, pursuant to an agreement with H. A. L. Watts, paid the said note and the latter executed to the sureties a new negotiable promissory note for the amount of those advances, and also executed to them a mortgage on the lands in controversy to secure the payment of said notes. After the note on which appellee was surety fell due appellee paid the amount of that note pursuant to agreement with H. A. L. Watts, who executed to appellee a negotiable promissory note for that amount and also executed a mortgage on the lands in controversy to secure the payment of the notes. H. A. L. Watts defaulted in the payment of both of these notes, and a suit was instituted in the chancery court to foreclose both of the mortgages. There was decree of foreclosure, and a sale by the court commissioner, and appellee became the purchaser at the sale, and the sale was subsequently confirmed by the chancery court. The sale to appellee was confirmed by the chancery court on April 5, 1916, and on April 15, 1916, the deed of H. A. L. Watts to his children was filed for record. Appellee instituted this suit to recover the lands in controversy and subsequently tbe cause was transferred to tbe chancery court, and progressed to a final decree in appellee’s favor. The testimony in the case shows that the sureties of H. A. L. Watts bad no knowledge of the execution of the deed by the latter to bis children at the time they accepted the mortgages from him. Tbe children of H. A. L. Watts resided on the premises with him apparently, as members of bis family as they bad done before the execution of the deed to them, and their possession was therefore referable to that fact, and not to any claim of ownership. Tbe fact that they occupied the lands in that way did not constitute notice of a claim of ownership or of such facts as would put purchasers on inquiry. The mortgagees were in fact innocent holders of negotiable instruments and were entitled to protection against the secret claim under the unrecorded deed executed by H. A. L. Watts. White-Wilson-Drew Co. v. Egelhoff, 96 Ark. 105; Haldiman v. Taft, 102 Ark. 45. Appellee purchased the lands at a sale under the decree of the chancery court and is likewise entitled to the protection which the holders of the respective mortgages enjoyed. Decree affirmed.