Court Opinion

ID: 6544877
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:18:46.675276+00
Date Added: 2024-06-11T15:55:56.341398
License: Public Domain

on rehearing. Opinion delivered April 9, 1904. Bunn, C. J. This cause was heretofore heard and determined in this court, in affirmance of the decree of the chancellor in the court below, but on grounds different from those upon which he based his decree. It comes up again on motion for a rehearing; this time on objections to the decree of this court on the first hearing, and mainly, if not altogether, on the question whether or not Whitlock was an innocent mortgagee in the deed of trust executed to James G. Allen, as trustee for his benefit, on the nth day of September, 1882, on lot No. 7, block 130, in the city of Hot Springs, Arkansas. The question was not presented— at least not pressed — in the former hearing-. We are now to consider it, and the law applicable thereto. The evidence in this case, we think, shows, when taken altogether, that Whitlock, either personally or through his agents, had notice of the claim of Gaines, which was among the first presented before the United States commissioner appointed under an act of Congress to adjust the claims of occupants .on the reservation lands in the city of Hot Springs, among other things, and principally to determine who, if any one, had a pre-emption right to purchase, under said act of Congress, any of the lots and parcels of land in said reservation, the paramount title of the government to all of them having been previously settled by the several decisions of the Supreme Court of the United States; and certainly he had notice sufficient to put him on inquiry which, if properly pursued, would have given him full information in relation thereto. Whitlock, in effecting the loan of $3,000 to Henry Cohn and his wife, Charlotte Cohn, the patentee of the government, acted for the most part through his agent, Dr. Hay, a resident of Hot Springs, who, with said Allen, effected the loan, both examining the records together, which records showed that Charlotte Cohn was the lessee of Gaines when his claim to the preemption right was filed before the commissioner, and not the original occupant of the same, nor owner of the improvements, except in so far as she had purchased the same from her said landlord; that, in fact, her claim was groundless for the purpose of securing the preference right to purchase the lot involved, as was after-wards determined by the Supreme Court of the United States in a controversy between Gaines and the Cohns, to which, however, Whitlock was not a party. However, it is in evidence, as given by Henry Cohn, that on one occasion, while the negotiations for the loan were going on, as we infer, when Whitlock was sojourning in Hot Springs, they had a conversation about the same, and that the subject was under discussion between them, and that Whit-lock was informed by him of the claim of Gaines, and all about it, as it stood at that time. The knowledge of Whitlock, on the subject, may also be inferred from many incidental statements forming part of the testimony in the case, and from the fact that the matter of the settlement and adjustment of these claims by said commissioner was of such public notoriety that his acknowledged agent, Dr. Hay, who was dead before this cause was heard in the court below, must have known of it. And it appears in still more positive evidence that Allen, also deceased, then engaged in effecting the loan from Whitlock to the Cohns, was familiar with the history of the claim of Gaines and the lease .from him to the Cohns, and that he was at least in so far the agent of Whit-lock that he looked up the records and prepared the necessary papers in the transaction; and that Whitlock, when in Hot Springs, made Allen’s office his headquarters. The evidence convinces us that the claim of Gaines as it was presented before the commissioner was undoubtedly known to Whitlock, or should have been known to him, or his agent, when he took the deed o.f trust. Gaines (we should say the Beldings, who in the meantime stood in his shoes) instituted his suit in the United States court to correct the rulings of the commissioner by which Charlotte Cohn had secured her patent about two .years after the date of her patent. This, we think, was not an unreasonable delay in prosecuting his claim to a final determination. Our attention is called to the case of McDonald v. Belding, 145 U. S. 492, which is the leading case on the subject of what constitutes one an innocent purchaser or mortgagee in such case. That case is undoubtedly the correct law on the subject, and, when the facts are the same, would control the decision of this court in its determination of any case. But McDonald in that case paid cash for the property without actual notice of the claim of plaintiffs, or of either of them. The main question, did he have constructive notice, was denied in the findings of the court. And the case finally went off on the fact that the Beldings had waited more than seven years to prosecute their claim against McDonald, who had purchased from the patentee. The facts in that case were quite different from the facts in this case, in so far as they determine the question of innocent purchaser or mortgagee. We are of the opinion that the motion for rehearing should be overruled, and it is so ordered.