Court Opinion

ID: 7823579
Source: CourtListenerOpinion
Date Created: 2022-09-07 18:01:57.964495+00
Date Added: 2024-06-11T16:30:48.175011
License: Public Domain

Steele Hays, Justice, dissenting. I could agree with the majority if J & J Plumbing Company was adversely affected by the substitution of the lot correctly described for the lot incorrectly described. But it was not. In fact the correction benefitted J & J Plumbing because it, like the other materialmen, was placing materials on the lot to which the McGowans had no legal title and, but for the correction, its lien would have been worthless. Katterjohn Concrete Products v. Coffman, 264 Ark. 503, 573 S.W.2d 306 (1978). The erroneous description, by metes and bounds, described the property as: Commencing at the Southeast corner of said NE/4, NW/ 4; thence West 603.5 feet; along the South line of said Northeast Quarter, Northwest Quarter; thence North 25 feet to the point on the Northerly Right-of-Way line of South O Street; thence North 10° 04 minutes West, 301.00 feet to the point and place of beginning; thence North 10° 04 minutes West, 109 feet; thence East 90.4 feet; thence South 10° degrees 04 minutes East 109.0 feet; thence West 90.4 feet to the point and place of beginning containing 0.23 acres more or less. . . In fact the description should have been 863.07 feet rather than 603.5 feet. Thus, the tract intended to be conveyed was identical to the property actually conveyed except that it lay 260.02 feet to the west. I concede the parties stipulated that J «fe J Plumbing had no actual knowledge of the mortgage. But that is not controlling. There was no stipulation that it had no legal notice and the chancellor made a specific finding that the materialmen were on notice that the property being improved by them was subject to the mortgage to Merchants National Bank. The important thing is whether J «fe J Plumbing was misled by the error in the description. There was no stipulation that J «fe J Plumbing thought the property was unencumbered by a construction money mortgage so that its lien for materials would be a first lien. Significantly, J «fe J Plumbing does not argue here or below that it was under the impression it would have a first lien. Therefore, the correction deed altered its position only for the better. What is controlling under our cases is whether materialmen could reasonably have been alerted to the fact that the construction was not occurring on the incorrectly described property, but on adjacent property, in this case immediately to the west. The chancellor found J «fe J Plumbing was on notice of the discrepancy because the only construction in the pertinent subdivision, Georgetown Park, was on the lot which was later correctly described, whereas there was no construction on the lot incorrectly described, or anywhere else in the area. That finding was sustained by the proof and those factors are sufficient under our cases. In Caraway Bank v. United States of America, 258 Ark. 858, 529 S.W.2d 351 (1975), where the wrong township was used in the mortgage, we held that a third party lien claimant could have located the correct property by extrinsic evidence and by the mortgage itself. Thus a mortgage with a deficient description had priority over intervening claimants without actual notice. In Caraway Bank we quoted with approval language from United States v. Westmoreland Manganese Corp., 134 F. Supp. 898 (E.D. Ark. 1955): It is a well settled principal of Arkansas law that a mortgage will not be held void for uncertainty, even as to third persons, whereby any reasonable construction can be sustained; and where the description used furnishes a key whereby a person, aided by extrinsic evidence can ascertain what property is covered, such description is sufficient. The majority cites Gaines v. Childers, 38 Or. 200, 63 P. 487 (1901). But there is a material difference in the facts. In Gaines, the trial court found the materialman had neither knowledge nor notice of the year-old claim of the mortgagee, whereas here the correction occurred within days and to the detriment of no one. Moreover the chancellor in this case reached a contrary finding and that finding was supported by the proof. The majority relies essentially on cases which follow the rule, “first in time, first in right.” However, in many of those cases the interests of innocent third paties had intervened. Where those are lacking, as here, the equities of the case have governed. Thus, in Allen v. McGaughey, et al., 31 Ark. 252 (1876), Kimberly executed a deed of trust to Allen which erroneously described one quarter-section of a 1,200 acre tract as southeast instead of southwest. It was undisputed that Kimberly intended to convey the southwest quarter to Allen but only after a foreclosure and sale to Allen did the error come to light. By that time McGaughey had acquired a judgment against Kimberly and his judgment lien was prior to Allen’s claim. This court held the judgment lien was subject to Allen’s right to reform his deed to make it conform to the contract. In Ft. Smith Milling Co. v. Mikles, 61 Ark. 123 (1895) the same result was reached: That courts of equity can correct mistakes in contracts of all descriptions by reforming them so as to carry out the intention of the parties is beyond question. In the absence of a statute, they will interfere to correct mistakes between the original parties, even against a judgment lien, or purchasers at sheriff’s sales under executions with notice of the facts, notwithstanding the judgment under which the lien was acquired, or upon which the executions were issued, were rendered subsequent to the execution of the contracts, but prior to the reformation. In such cases the equities are dehors the contracts, and the judgment liens attach subject to them; and parties purchasing with notice cannot defeat them. I believe the chancellor should be affirmed.