Case Name: Reed v. Rumph
Court: Arkansas Supreme Court
Jurisdiction: Arkansas
Decision Date: 1926-01-11
Citations: 170 Ark. 258
Docket Number: 
Parties: Reed v. Rumph.
Judges: Chief Justice McCulloch and Hart, J., dissent.
Reporter: Arkansas Reports
Volume: 170
Pages: 258–271

Head Matter:
Reed v. Rumph.
Opinion delivered January 11, 1926.
D. D. Glover and McKay & Smith, for appellant.
GaMghcm & Sifford, T. W. Hardy and Powell, Smead & Knox, for appellee.

Opinion:
Smith, J.
Appellants, who were the plaintiffs below, allege in their complaint that they, together with their sister Nannie Berry, were the sole heirs-at-law of their mother, Fannie Reed, who died April 2, 1885, and that at the time of their mother's death she owned a 160-acre tract of land in Ouachita County. That Fannie Reed, their mother, had mortgaged this land in 1885 to one D. W. Chandler to secure advances to be made by said Chandler to enable Fannie Reed to make a crop in the year 1885, and upon the security of this mortgage Chandler made advances to Fannie Reed amounting to $51.82. That Fannie Reed died before the crop was gathered, and it was agreed between these appellants and their sister Nannie Berry that this sister should remain in possession of the land and ont of the proceeds of the crop should pay Chandler the indebtedness secured by the mortgage to him. That this was done and the indebtedness fully paid, and that, pursuant to this agreement in regard to the possession, Nannie Berry continued to occupy the land after the death of Fannie Reed, it being understood that Nannie Berry should occupy and cultivate the land and keep the taxes paid, her possession being for the benefit of herself and her tenants in common, to-wit, her brother and two sisters, who were the plaintiffs below land are the appellants here. That Nannie Berry made a crop on the land in 1886, and obtained advances to enable her to do so from Chandler in the sum of $82. That this debt of $82 was the personal obligation of Nannie Berry, aud was not secured by the mortgage which her mother had executed the previous year, but it was alleged that this debt of $82 was fully paid, aud that nothing was due Chandler on account of advances for either 1885 or 1886.
It was further alleged that, notwithstanding the fact that nothing was due under the mortgage, one J. C. Russell, in 1892, applied for and secured letters of administration on the estate of Fannie Reed, and thereafter the claim of Chandler for $82 was probated against the estate, and the land was sold in satisfaction of this demand.
Various irregularities in this sale are alleged; in fact, a conspiracy is charged between Chandler and Nannie Berry to procure the sale of the land. Chandler became the purchaser at the administrator's sale, which was confirmed, and, after cutting the timber off the land, Chandler conveyed it to Nannie Berry by a quitclaim deed-. The administrator's deed was dated August 2, 1895, and the deed from Chandler to Nannie Berry was executed February 11,1904.
We do not review the testimony tending to establish the allegations of the complaint in which it was prayed that this deed from Chandler to Nannie Berry be can celed, for the reason that it appears that the plaintiffs here were the plaintiffs in a former suit, which was decided adversely to them and is conclusive of the question.
Nannie Berry died in 1910, and was survived by an only child, a daughter named Parthenia, who had married one Arthur Sewell, and to this union two children were born, one a son named A. W., the other a son named John W. Sewell. These children are minors, and their mother Parthenia is dead.
In 1911 plaintiffs here brought suit to recover an undivided three-fourths interest in the land, and partition thereof was prayed. This complaint recited the ownership of the land 'by Fannie Reed, the execution .and payment of the mortgage hereinbefore referred to, the fraudulent appointment of an administrator of her estate, the probate of a demand against her estate which she did not owe and which had been paid by the person who did owe it, the irregularity of the appraisement, the inadequacy of the price at which t'he land was sold by the administrator, and the collusion between Nannie Berry and Chandler by which the sale was effected. ' This complaint prayed that the deed to Nannie' Berry from Chandler should be treated as a conveyance to her as trustee for the benefit of herself and her tenants in common, the plaintiffs here, who were the plaintiffs there.
Upon these allegations the court was asked to appoint a commissioner to state an account as to the rents, etc., and that the mortgage executed by Fannie Reed be canceled land held for naught, and that Nannie B'erry be declared a trustee under the deed to her from Chandler, and that partition of the land be decreed.
The depositions in that case were lost, but the pleadings were produced and offered in evidence at the trial from which the present appeal comes, and it appears from the answer filed in thiat case that issue was joined as to all the allegations of the complaint, and the answer alleged that title was claimed under the administrator's deed and also by virtue of the more than seven years' possession by Chandler after receiving the administrator's deed before conveying the land to Nannie Berry. An attorney who participated in the trial of that cause testified that a day of the court was consumed in the trial. At the conclusion of that trial a decree was entered dismissing the complaint as being without equity. This decree was offered in evidence, and it is therein recited that the cause was heard on the pleadings and exhibits, the depositions of witnesses and documentary evidence, from all of which the court found "that the complaint of plaintiffs should be dismissed for want of equity and as not established by the proof introduced in said cause."
Upon this finding of fact it wias there decreed "that the plaintiffs take nothing herein by virtue of their complaint, and that the same be and is hereby dismissed for want of equity, and as having not been established by the proof." Upon this record the defendants herein entered a plea of res judicata.
Appellants now say this plea is unavailing, as nothing more was there adjudged than that the complaint was without equity, and that this finding resulted from the fact that the defendants were in the actual possession of the land au/d had alleged a title adverse to the plaintiffs, and upon this finding nothing remained for the chancery court to do but to dismiss the cause and remit the plaintiffs to their action at law.
We do not, however, so understand the effect of the decree. The cause was not transferred to the law docket, as it might and should have been if the chancery eourt had found only that there was an adverse holding of the land which presented an issue triable at law.
The complaint prayed equitable relief by way of the cancellation of the mortgage, and the declaration of an existing trust, and, if the court had found that the testimony sustained the allegations raising these issues, the equitable relief prayed could have been granted as an incident thereto, and partition could also have been ordered.
The chancery court had jurisdiction for this purpose, and that jurisdiction was invoked by the plaintiff, and, having acquired this jurisdiction, partition could have been decreed, had the testimony supported the allegations of the complaint, although defendants asserted an adverse holding. Trapnall v. Hill, 31 Ark. 345; Moore v. Gordon, 44 Ark. 334; Criscoe v. Hambrick,, 47 Ark. 235; Hawkins v. Layne, 48 Ark. 544; Cannon v. Stevens, 88 Ark. 610.
The case of Wheeler v. Bennett, 79 Ark. 210, sustains the plea of res judicata in the present case. That was a suit brought to vacate a decree of the chancery court, in which it was recited that the defendants had been constructively summoned but had made default, and a decree of partition had been rendered and the report of the commissioners making partition confirmed. Suit was brought to set this decree aside, and it was alleged in the complaint praying that relief that the party asking it wias not served with summons, did not appear in the suit, and had no information of the pendency thereof until after the rendition of the decree. The defendants in the suit to vacate the prior decree alleged, among other defenses, that the plaintiffs had, at a former term of court, instituted the same action, in the same court, setting forth the same cause of action, and seeking the same relief, and that the court had rendered a final decree, upon the pleadings and proof, dismissing the complaint for want of equity. This decree was pleaded in bar of that suit.
The decree pleaded in bar of the suit recited that: "This cause is heard upon the pleadings, affidavit of plaintiff and the record of decree and report of partition in the case of Bennett v. Bugg, and, upon consideration, the court finds that there is no equity in the plaintiff's complaint," and upon this finding the cause was dismissed. The court then said: "It is urged in behalf of appellant that the decree in the former suit was in effect a nonsuit or dismissal for want of proseen tion, and was therefore without prejudice to another suit upon the same cause of action. The recitals of the decree do not sustain that contention. It appears therefrom that the cause was heard hy the court 'upon the pleadings and affidavit of plaintiff and the record of decree,' etc., and that upon consideration the court found no equity in the complaint, and dismissed it. The defendants in that suit (appellees Bennett and Lollar) were constructively summoned, and made no appearance; so, notwithstanding the default, appellant was required hy law to prove his cause of action against them. Kirby's Digest, § 6253. The court found the proof to be insufficient to sustain the allegations of the complaint, and dismissed it. That decree was not appealed from or set aside, so far as this record discloses, and therefore barred appellant from prosecuting another suit upon the same cause of action."
We conclude therefore that the decree rendered in the former ease is conclusive of the issues raised in the present case, as the former decree was never appealed from or set aside, and has become final.
There was a branch of this case which was heard and disposed of along with the main case which we next proceed to consider. It was alleged that the plaintiffs had employed G. S. Rumph to dispose of their interests in, the land, and that Rumph had disposed of their interest without properly accounting to them for the proceeds which had been derived from the sale of the land. Oil had been discovered in the vicinity of the land here in litigation, and Rumph was speculating in oil leases. He discovered that these plaintiffs apparently owned an interest in the land, and he wrote the appellant George Reed the following letter:
"I have been working for sometime to try and get the Berry lands straight, but have had a pretty hard time. A man in Chicago has been paying the taxes on some. Now, George, I am sending you an option to sign to me an oil and gas lease, so I can try and sell same, but before I can do much with it I will have to get abstract and see if yon and yonr sister actually own any interest in same. Please let me know what the man in Chicago name is and see what rights he has. Now, George, this option on the oil and gas lease is, if I can get anything out of it for you, I get a commission of ten per cent., and you all that own the land will get the balance. 'Some claim you and your sister have no interest in same at all, hut that will come out whenever the abstract is made. If your wife is up there, have her sign with you before a notary public and send back to me, and I will have your sister sign.
"Now whatever I get, if anything, I will give all to you after taking out for the abstract and ten per cent, commission. If it shows up you all have no interest, I will be out what I spend on it, and the man in Chicago will get it or whoever the legal heirs are. Attend to this at once, so I can get same finished up. I have about three hundred acres in that part of the country, and, if possible, I am going to try to get some man to take it all; if not, I will do the best I cau as I promised you. ' '
Bumph caused an abstract of the title to the land to be prepared at his own expense, which was submitted to an attorney, who, after examining the abstract, expressed the opinion that appellant Beed and his sisters— Seed's coappellants here-—-could recover an undivided three-fourths interest in the land. This abstract had omitted the record of the decree in the former case which we have just discussed, and upon discovering this decree the attorney then advised Bumph and appellant Beed that this decree would bar a second suit.
Bumph testified that, pending the examination of the abstract by the attorney, and prior to the discovery of the omitted decree, he had agreed on behalf of appellants that the attorneys in the case should have as their fee, in the event the land was recovered, an undivided half interest in the recovery, and that Bumph and the three appellants should divide the remaining half interest equally. The attorneys with whom this agreement was made did not file the present suit.
Rumph also testified that, after being advised that appellants could not recover any interest in the land, he was importuned by appellant Reed to pay him something for himself and his sisters to secure a release of their interest in the land, but witness declined to do so for the reason that he did not know that he would be able to secure anything for a quitclaim deed. He admitted that appellants had previously conveyed their interest in the land to him as trustee, but he testified that this was done to protect himself , and the attorney in the event the land was recovered, so that he could make a division of the proceeds of the recovery. Rumph further testified that Reed was so importunate that he land his sisters be paid something that he finally agreed to pay Reed $150 and his sisters $50 each in full acquittance of any claim they might have for any part of the money which he might obtain for a quitclaim deed to the purchasers of the land from the 'Sewell heirs, and that, pursuant to this' agreement, he paid those amounts aud took receipts therefor, which he offered in evidence, and that, when this payment was made, he was taking the chance of losing the sums thus paid ias well as the cost of the abstract, as he did not then know that he would ever receive anything for his deed.
The court below accepted Rumph's version of this transaction and dismissed the suit against Rumph for the sum received by him for his quitclaim deed. It is admitted that Rumph received in cash and in oil $4,500 for his quitclaim deed.
This part of the decree is, we think, against the clear preponderance of the evidence. The letter we have set out above is unmistakable in its meaning and reserves to Rumph only ten per cent, of such sum as might be recovered through his efforts. The deed from appellants to Rumph was made to him, not individually, but as trustee, and we think the purpose of the trust should be decreed to be to effectuate tbe agreement contained in tbe letter.
It is true, nothing was conveyed by the quitclaim deed, as appellants owned no interest in-the land, but there was involved in the sale of the lease a large sum of money, about $70,000, and the purchaser was unwilling to accept the lease until the deed from appellants to Rumph was out of the way, and this objection to the title was disposed of by buying from Rumph as trustee a quitclaim deed, and for this deed the sum of $4,500 was paid.
The receipts to Rumph above referred to recite that the sum paid was "in full settlement for and satisfaction of all demands of any character or kind whatever against him for and in consideration of the deed executed to him for my interest" in the lands here involved. This receipt was dated October 7, 1922, whereas the quitclaim deed from Rumph as trustee to the purchasers of the oil lease was dated October 2, and was then in escrow awaiting the approval by the probate court of the lease from the guardian of the minor Sewell children.
The testimony shows that the exact sum to be paid Rumph had not then been agreed upon, and was finally definitely fixed after receipts had been executed. But the relation 'between Rumph and appellants was one Galling for the exercise of the highest candor and good faith, and we do not think he sufficiently disclosed to them the probable value of his quitclaim deed. On the contrary, he admits telling Reed that appellants had no valuable interest in the land, and he also testified that the sum paid him was virtually a gift.
Under the facts of the case we think this speculation of Rumph was not one to be approved, and that he should be required to settle with appellants, the beneficiaries under the trust deed, which was without consideration except that expressed in the letter from Rumph to Reed. Myers v. Linebarger, 134 Ark. 231.
The decree of the lower court below, therefore, will be affirmed, except in so far as it relates to Rumph, and as to him it will he reversed, and, as the cause appears to have been fully developed, it is here ordered that Rumph be allowed' a credit of $450 as commissions and the amounts evidenced in the receipts, and that appellants have judgment against him for the balance.