Opinion ID: 175882
Heading Depth: 5
Heading Rank: 2

Heading: Real Estate Prong

Text: We also conclude the Estoppel Certificate, which in relevant part essentially obligates KFI to pay off the Mortgage in the event of Acklin's default on the bridge loan, does not fall within the real estate prong of the Arkansas Statute of Frauds. Although the parties do not cite any cases on point, in Riley v. Atherton, 185 Ark. 425, 47 S.W.2d 568, 568 (1932), the Arkansas Supreme Court held that an oral or unsigned agreement to satisfy a mortgage does not fall within the Arkansas Statute of Frauds. The reason for the rule is . . . that a mortgage is a mere security for a debt, and the property may be released from the mortgage by parol agreement, or by a written one. Id. (internal marks omitted). See also Schlumpf v. Shofner, 210 Ark. 452, 196 S.W.2d 747, 749-50 (1946) (holding an oral agreement by a second mortgagee to purchase the first mortgage and permit the mortgagor to redeem the first mortgage did not fall within the real estate prong of the Arkansas Statute of Frauds, because such agreement [is] not . . . regarded as a contract for the sale of land or a transfer of title thereto). Not every oral or unsigned agreement relating to real estate falls within the real estate prong of the Arkansas Statute of Frauds. See, e.g., Russell v. Williams, 197 Ark. 1086, 126 S.W.2d 614, 617-18 (1939) (holding an oral agreement to create a partnership to speculate in lands did not fall within the statute of frauds); Johnson v. Bellmont, 172 Ark. 851, 291 S.W. 77, 80 (1927) (holding an oral agreement relating to an oil lease did not fall within the statute of frauds). The statute is not so broad as to prevent proof by parol of an interest in lands; it is simply aimed at the creation or conveyance of an estate in lands without a writing. Russell, 126 S.W.2d at 617 (quoting Chester v. Dickerson, 54 N.Y. 1, 13 (1873)); cf. Ozan Lumber Co. v. Price, 219 Ark. 709, 244 S.W.2d 486, 486-88 (1951) (holding an oral agreement to purchase timber fell within the statute of frauds). The Estoppel Certificate neither creates nor conveys an estate in land and, therefore, does not fall within the real estate prong of the Arkansas Statute of Frauds.