Court Opinion

ID: 7818438
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:44:59.853487+00
Date Added: 2024-06-11T16:30:40.102042
License: Public Domain

Opinion on rehearing delivered PER CURIAM On petition for rehearing appellant asks us to consider the following, among other things: 1. Appellees commenced this action in the trial court claiming ownership of five tracts of land, alleging that all tracts were conveyed to George Wilson, but introduced deeds conveying only three of the tracts and rested without producing any other evidence. Appellant contends that appellees’ proof failed as to the other two tracts. He further relies on possession of these tracts by J. B. Wilson and uncontradicted testimony by the grantor, who conveyed one of these tracts, that the deed was made to Wilson Brothers. 2. There is uncontradicted evidence that partnership funds were used to pay at least a part of the purchase price of all the lands involved. 3. There is no evidence to show that any of the tracts of land involved was paid for with any money except that belonging to a partnership of Wilson Brothers. 4. Evidence tending to show that deposits were made in bank accounts in the name of Wilson Brothers and checks were drawn on the account of Wilson Brothers was undisputed, and evidence that proceeds of operations conducted by J. B. Wilson were deposited to bank accounts of Wilson Brothers or to accounts in the name of George Wilson and, perhaps, in the name of his daughter, was not contradicted. 5. Evidence supporting appellant’s contention includes applications for crop production loans by George Wilson in which the land ownership was stated to be by Wilson Brothers, and tax assessments of the lands by George Wilson in the name of Wilson Brothers. Upon original submission, the court was sharply divided upon the question whether a preponderance of the evidence supported the chancellor’s finding that J. B. Wilson had no interest in the lands involved. The chancellor properly found that all farming operations were by a partnership consisting of J. B. and George Wilson. The majority then sustained the chancellor’s finding but found these deficiencies in the evidence: 1. Deeds to only three of the five tracts involved were ever introduced in evidence, all of which named George Wilson as grantee. The identity of the grantor in the other two deeds was never disclosed. In spite of the fact that there was some evidence that some payments on the purchase price of some of the lands and some evidence that the grantors were dealing, or thought that they were dealing with Wilson Brothers, or J. B. and George Wilson, the record was silent as to the reason the title to the land was taken in George Wilson. 2. The overall testimony of all the witnesses left the circumstantial evidence as to the ownership so evenly balanced that it could not be said that a preponderance lay either way. 3. The evidence as to the names in which the bank accounts were carried, the source of the funds deposited, the identity of those authorized to draw checks on the account, the arrangements between the depositor or depositors and the banks was vague. No explanation was made or offered as to the failure of either party to produce bank records or bank statements or the testimony of bank officers or employees, other than one whose testimony related to transactions which took place many years ago. It was not possible to determine, with any degree of certainty, whether the pertinent bank accounts were joint accounts, partnership accounts or individual accounts of one or the other of the brothers, with checking authority to the other. The affirmance of the chancellor’s decree as to the ownership of the lands was based upon the want of evidence as to the reason the deeds introduced were made to George Wilson. We have considered this case, both on original submission and on petition for rehearing over a longer period of time than we usually devote to a single case, and are still divided and uncertain as to the correct result, because of the deficiencies in the evidence pointed out. We are not able to say with any degree of certainty which party is to blame for not producing evidence covering these deficiencies. This determination does not rest solely upon placing the burden of proof in the case, because the evidence may be readily available to one party and not available to the other at all. The general rule in equity cases is that, with all the record fully developed, we should finally decide the case here instead of remanding it to the chancery court for a new trial. Narisi v. Narisi, 233 Ark. 525, 345 S. W. 2d 620. The general rule we follow in this respect is proper and should be observed in all save the most exceptional cases. Yet there are exceptions. This court has the power, in furtherance of justice, to remand any case in equity for further proceedings. Carmack v. Lovett, 44 Ark. 180. We have done this when the chancery court had based its decision on an erroneous theory. Long v. Charles T. Abeles & Co., 77 Ark. 156, 93 S. W. 67. We also did so when we found that the chancery court had erroneously decided a case upon an issue of law, leaving issues of fact undecided. Fordyce v. Vickers, 99 Ark. 500, 138 S. W. 1010. When we can plainly see what the rights and equities of the parties are, we will not remand a chancery cause. Pickett v. Ferguson, 45 Ark. 177, 55 Am. St. R. 545. On the other hand, when it is clear that the cause was tried in the chancery court upon an erroneous theory, and we are unable to determine from the evidence before us the decree that should have been rendered, we will, in furtherance of justice, remand the cause to be reopened, to permit further proof so the case may be determined upon the proper principles. Long v. Charles T. Abeles, supra (on rehearing). In Fordyce v. Vickers, supra, we said: But where the chancellor has decided a case upon an issue involving virtually a question of law, in which we find that he was in error, and leaves undecided other issues in the case involving questions of fact, which he is probably better able to pass upon by reason of his greater familiarity with the circumstances and conditions surrounding said issues, this court in its discretion may remand the case for his decision upon said issues of fact. Under the circumstances of this case, we deem it wise to remand the cause for a determination by the chancellor of the matters relative to the improvements, taxes, and rents. In Gaither v. Gage, 82 Ark. 51, 100 S. W. 80, we remanded a case for further proceedings where it was apparent that the case was tried upon an erroneous theory in the chancery court. We analyzed previous holdings in Wilborn v. Elston, 209 Ark. 670, 191 S. W. 2d 961, saying: We try chancery cases de novo, and the usual practice on appeal is to end the controversy here by final judgment, or by direcdon to the trial court to enter a final decree. There are, however, exceptions to this practice, and it rests in the discretion of this court to determine whether, upon reversal of a cause, the same should be opened for a new trial. If the cause is heard and determined by the chancellor on an erroneous theory, or if it is not sufficiently developed in the trial court, this court may remand for further hearing on the whole case, or on certain issues. [Citing cases.] This practice was followed in the instant case on the former appeal, where the cause was heard by the chancellor on what we determined to be an erroneous theory, and the testimony on what we conceived to be the pertinent issues did not appear to us to have been fully developed. Even when all the parties tried a case upon an erroneous theory and the chancery court decided the case upon that theory, we have exercised our discretion to remand such a case so that pertinent facts, not fully developed, might be ascertained. Brizzolara v. Powell, 214 Ark. 870, 218 S. W. 2d 728. In Carlile v. Corrigan, 83 Ark. 136, 103 S. W. 620, on reconsideration, we found the question, whether a preponderance of the evidence sustained a conclusion reached in the original opinion finding error but granting judgment here, not free from doubt, and, since it appeared that the evidence on that point had not been fully developed, we remanded to permit further testimony. When the appellee tried a case upon the theory that a partnership was at will and the court accepted that theory, but we found that the partnership was one for a period of at least three years unless dissolved for sufficient cause, we gave leave to the parties to take further testimony on the existence of cause for dissolution. Tankersley v. Norton, 142 Ark. 339, 218 S. W. 660. In our latest exercise of this discretion, we remanded a case in which we affirmed the chancellor as to the termination of a trust in order to permit the trustees to render an accounting to determine whether they were to be reimbursed for a financial loss. Arnett v. Lillard, 247 Ark. 931, 448 S. W. 2d 626. There we said: We agree with the chancellor that the trust may be terminated as of the date appellee pays the government mortgage. However, appellants should be afforded the opportunity to present a fair accounting of their tenure under the trust and they should be reimbursed in the event they have to that date suffered an unavoidable loss. No such contention was made at the trial level and a loss in actuality may not exist; however, it would be putting form above equity to permit an early and unexpected prepayment to burden appellants with a financial loss and to the benefit of appellee. We are clothed with discretion to order a case reopened in exceptional circumstances for additional proof if that is necessary to achieve equity. See Brizzolara v. Powell, 214 Ark. 870, 218 S. W. 2d 728 (1949). Appellant filed an answer to appellee’s original complaint, in which he alleged that he was not wrongfully interfering with appellee’s use and control of the land involved here, because it was a partnership asset of which he was properly in control and in which he had a partnership interest. He filed a cross-complaint against the appellee widow and heirs in which he alleged that all assets and property held in the name of George Wilson, with minor exceptions, were owned by a partnership consisting of George Wilson and J. B. Wilson, that the legal title was held by George Wilson in trust for the partnership and the partners, that land held in the name of George Wilson was purchased with partnership money, and that the farms involved were operated by the partnership. He further alleged that any attempt to base title to any such lands held in the name of George Wilson would constitute a fraud, actual or constructive, which should impress a trust upon the property in his favor. He asked that title to a one-half interest be vested in him, subject to mortgages and to claims of creditors against the estate of George Wilson. A reading of the chancellor’s opinion discloses that the question of title to the real estate must have ultimately been treated as if the determination of the case turned upon the existence of a trust ex maleficio or resulting trust. Every authority cited in this opinion has to do with an alleged trust, either constructive or resulting. None relates to the situation where partnership funds were used in paying the purchase price. At first blush one of them, Randolph v. Randolph, 216 Ark. 193, 224 S. W. 2d 809, might appear to be such a case, but it is not. The only reference to partnership is the contention of one brother, who joined with other siblings in the conveyance of land to another brother, that there was an agreement between him and the grantee to form a partnership for the purpose of acquiring title to the land from their cotenants and to pay for it from the proceeds of timber to be sold off the land. Even so, he did not contend that title was to be held by the partnership., He contended that the grantee agreed to convey an undivided one-half interest in the land to him. The question involved there had to do with the existence of an enforceable oral contract to convey or of a resulting trust. There was no evidence of the use of any partnership funds or of the existence of any partnership assets. We certainly agree that neither a constructive nor resulting trust was established by the evidence. Inasmuch as the authorities upon which the chancellor rested his finding were based upon this decision, we cannot be certain that there was a clear-cut decision on the partnership theory. In Harbour v. Harbour, 207 Ark. 551, 181 S. W. 2d 805, where a resulting trust was alleged, the chancery court rendered a decree in favor of a wife on the basis that the lands deeded to the husband were paid for from a joint bank account. This court found the decree on that theory erroneous, but sustained the wife’s contention that she had an equitable interest by reason of a resulting trust, and remanded the case to permit the wife to show the exact amount of her funds which were used in the purchase of the land. A case quite similar to this is Kook v. American Sur. Co. of New York, 88 N. J. Super. 43, 210 A. 2d 633, 18 A. L. R. 3d 784 (1965). There in a suit on an insurance policy, the court found that there was coverage under the policy if property held in the names of the plaintiffs was the property of a partnership consisting of the plaintiffs. The court remanded the case for the taking of further proof on the subject. That court was not satisfied with the existing proof on the subject because the terms of neither the partnership agreement nor real estate purchase agreement were disclosed. No books, records, settlements, documents, income tax returns or other evidence corroborative of an interested partner was introduced. Because the court entertained substantial doubt as to whether the partnership issues were adequately understood or canvassed at the trial level, the court, in the interest of justice, remanded the case for additional proof. Obviously, there was more proof to support appellant’s partnership theory in this case than there was in that. Because of our uncertainity as to the preponderance of the evidence, as to the theory upon which the case was decided, as to the rights and equities of the parties under the evidence before us, which seems not to have been fully developed, and in the furtherance of justice, we feel that this case should be remanded to the chancery court. There the parties shall be permitted to offer further evidence to show: 1. How the record title to the lands was ¿eld, and the identity of the grantee in any unrecorded deeds conveying the property. 2. The reasons for taking the title in the names of the grantees of all conveyances of lands alleged to be partnership property, rather than in the names of the two alleged partners. 3. The names in which bank accounts were held, the source of funds deposited thereto, the person authorized to draw checks on each such account, the arrangements between the depositors and the banks, and the disposition of the funds deposited. 4. The source of the funds used to pay the purchase price of any of the lands in which the grantee in the deeds when purchased was George Wilson. 5. Any accountings between the partners and withdrawal of partnership funds by the individual partners for their own account.