Court Opinion

ID: 7815466
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:34:34.652969+00
Date Added: 2024-06-11T16:30:35.277732
License: Public Domain

Ed. F. MoF addin, Associate Justice, (Dissenting). The point to which I direct my dissent is the decision of the majority to allow the Loes to prevail over the Overtons. I am convinced that all of the equities are in favor of the Overtons. Their assignments were prior, both in time of execution and in time of recording, to the Loe assignments; and the Loes had notice of facts and circumstances which put them on inquiry, and they are bound by all the knowledge that such a reasonable inquiry would have disclosed. We have a long line of cases in Arkansas so stating such rule. See Bland v. Fleeman, 58 Ark. 84, 23 S. W. 4; Waller v. Dansby, 145 Ark. 306, 224 S. W. 615; Jordan v. Bank of Morrilton, 168 Ark. 117, 269 S. W. 53; and Richards v. Billingslea, 170 Ark. 1100, 282 S. W. 985. Glen Loe was the only one of the Loes who testified. He said Johnson came to him in need of cash and offered to sell a $12,000 oil assignment for $6,000. Johnson had the assignment with him. Here is the record: “Q. Who drew this assignment? A. I don’t know, sir. Q. Did he just show up with an assignment there to you? A. Yes, sir. Q. And said ‘I want $6,000 for this’? A. Yes, sir. Q. And you had never seen it or heard of it before ? A. I had heard of it, yes, sir. Q. When did you hear of it ? A. Oh, probably that morning. Q.....Anyhow you heard of it that morning and closed it during the day? A. Yes.' Q. Without any effort to determine whether it was good? A. Well, he told me that he had an oil payment for $12,000 and he would take $6,000 for it, and I had seen the equipment on his well, and I thought it was worth $6,000. And I didn’t see how I could lose, because he incorporated the lien on it. Q. You say you have known Mr. Johnson a long time? A. Yes, sir. Q. If you had come up to Lewisville or had your attorney come up here and check the record, he would have found these assignments to the Over-ton defendants which had been on record for over a month when you paid out this money or first heard of the deal? A. I wouldn’t know; I haven’t checked the records till yet. Q. You don’t know yet? A. No, sir. Q. But if they were recorded in September you would have found them, wouldn’t you? A. If I had been looking for them I probably would. Q. Or if your attorneys had been looking for them? A. Yes, sir. Q. Do you have an attorney ? A. Sure I have an attorney. Q. Who? A. Herrott and Ritchey. Q. They are available to you at any time ? A. Yes, sir, they get $200 a month for looking after my business; I hope they are available. Q. You expect them to ? A. Yes, sir.” When we look at the $12,000 oil assignment from J ohnson to Loe, we see that the instrument which Loe took specifically stated, “It is understood that the payment of no part of said $12,000 is a personal obligation of the assignor herein but that said sum shall be due and payable to the said Bert and/or Glen I). Loe only out of 7/8ths of the first oil produced, saved, and sold ”. I maintain that when a man comes in with an instrument already prepared reading like the foregoing and offers to sell $12,000 worth of oil for $6,000, the purchaser is put on notice that there is something’ “fishy” about the deal. In the normal course of business a man just does not sell $12,000 for $6,000. The very way in which the transaction was handled between J ohnson and Loe was sufficient to put Loe on notice, and Loe has himself admitted that if he had pursued such notice he would have learned of the Overton assignments. Under these facts and circumstances, I cannot see how the majority can overrule the Chancellor’s finding of facts. He is what the Chancery Court found as regards the Loe assignment: “. . . . that the said assignment above described from A1 Johnson and wife to the Loes is null and void and should be cancelled and held for naught, and that all reference to, and the reservation of, said oil payment ... is invalid.... and said assignment should be reformed to exclude any reference to said oil payment .... ” The Chancellor saw the people who testified. Glen Loe and J ohnson were the only two people who testified as to the good faith of the Loes. They were both interested parties and their testimony stands contradicted as a matter of law. The Chancery finding, as previously copied, shows the Chancellor’s reaction. I maintain that when Glen Loe made the admissions and testified as he did the Court was justified in believing that he shut his eyes to material facts of which he had notice. The Trial Court was justified in holding that the equities were in favor of the Overtons; and the Chancery decree should be affirmed.