Court Opinion

ID: 7807797
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:08:42.158383+00
Date Added: 2024-06-11T16:30:22.703409
License: Public Domain

Kirby, J., (after stating the facts). Appellant contends that the purchasers of the certificate of purchase at the tax sale occupied no position of trust and owed no duty in relation to the land purchased to the appellees holding the vendor’s lien for the remainder of the purchase money due thereon, that required ¡him to give notice to appellees of the condition before purchasing the certificate or prevent their buying same and 'holding the lands. It is true that Shafer was not the attorney of appel-lees at the time of his purchase of and the assignment of the certificate of purchase to 'him, and that he had never been their attorney, but that fact would not necessarily relieve him from any duty to inform the appellees that the lands had been forfeited and sold for taxes, and the amount required to purchase the certificate of purchase. The (undisputed facts are that appellees, the former owners of the land, had a vendor’s lien thereon to secure the payment of the balance of the purchase money, that the Blackwells were in possession of the land under their conveyance and bound to the payment of all the taxes thereon; that they permitted the lands to become delinquent for the levee taxes which were afterward sold at a foreclosure sale; that A. B. Shafer was the attorney of the Blackwells in all matters, and that he wrote the two letters to appellees as their attorney, set out in the statement of facts, assuring them when they 'became insistent for the payment of the 'balance of the purchase money that he was- endeavoring to negotiate a loan on the Blackwell property, which he felt sure would ¡be procured in from thirty to sixty days from then, January 27, 1913. and asking that his client be put to no further trouble and expense. Later, on January 1, 1914, he wrote to appellee’s attorney, informing him of the financial condition of the Blackwells; that they would not be able to pay the amount due the Kinney’s at the maturity of the notes, but that if Blackwell was given an opportunity, he would do so; that he had failed to procure the loan of which he first wrote', but hoped that money matters would ease up within a few months, and, if so, did not think he would have any trouble in securing a loan of sufficient amount to pay the indebtedness. The lands had been sold for taxes in September, 1912, and the time for redemption had expired when 'Shafer’s last letter was written, and on the 28th day after writing said letter,, he purchased the certificate of purchase of these lands sold at the tax sale for less than $800, and had it assigned in blank that he might afterward'fill in the name of appellant, “Beck,” if he desired to join in the purchase. He had often before discussed the condition with Blackwell, investigated the records to see whether the tax sale was regular, and concluded it was, and advised him to buy the certificate of purchase which Blackwell informed Mm lie co'uld not do, being nnaJble to procure the money therefor. Shafer stated he represented the Blackwells, when he personally talked with the owner of the certificate of purchase about buying it, but that he represented Beck or himself, when he bought the certificate of purchase of Gamble through Wheeler, and had it assigned in blank. He gave his individual note for the purchase money, and rented the lands to Blackwell for the year, and said that Blackwell had paid some of the rent. There was in fact, no appreciable change of possession, and Mrs. Blackwell stated that she supposed she still owned- the lands as her husband was operating them as he had formerly done. The evidence also discloses that shortly after the transfer of this certificate of purchase, Mrs. Blackwell conveyed to iShafer, as trustee, certain of her lands and property situated in the State of Tennessee, securing thereby along' with indebtedness to others a fee of $2,500 to him. He testified that tMs had no relation whatever to the purchase of the lands in controversy, nor of their sale to the Blackwells, or his holding them for their benefit, that it was for professional services already rendered and to be subsequently rendered. The Blackwells did not notify appellees that the lands had forfeited and been sold for taxes, and that the certificate of purchase could be acquired upon the payment of a certain sum therefor, neither did 'Shafer 'give them ány information of tMs fact, but bought the certificate of purchase twenty-seven days after assuring them that Blackwell would be able to pay the lands out if given time, and holding out the hope that he would shortly be able to negotiate a loan for him on the lands and take up the notes. Blackwell could not have permitted the land to forfeit for taxes and procured it to be bought in by another person for his benefit, and escaped the enforcement of appellee’s lien thereon against the land. Randolph v. Nichol, 74 Ark. 93. An insolvent debtor will not be allowed to permit his lands to forfeit for taxes and be bought in, in his wife’s name with her means even, to defeat the payment of his debts, and such transaction will be treated so far as his creditors are concerned, as a redemption in effect of the lands by him. Herrin v. Henry, 75 Ark. 273; Fluke v. Sharum, 118 Ark. 229.  (1) The Blackwells were hound to the payment of taxes upon the land, and they could not permit a forfeiture and conveyance thereof for their benefit that would have operated to defeat the lien of their grantors, and they owed the duty to inform appellees, the holder of the lien for the balance of the purchase money of the sale of the lands, of the fact that the certificate of purchase could be procured for a certain sum, which they were unable to pay, in order that appellees could make the payment and protect their interest.  (2) Shafer acquired all the information relative to the tax sale of the lands, finally resulting in his purchase of the certificate of purchase, the effect of which was to defeat the lien of appellees for the purchase money of the lands by reason of his relationship.'to appellees’ grantees as their attorney, 'and as their attorney he also knewwhenhe bought'the certificate, that if the transaction was valid, it would defeat appellees in the collection of their debt from the Blackwells, which he had only twenty-seven days before assured them would be paid if the Blackwells were given time, and he himself hoped to be able to procure for them a loan on the lands, with which to make the payment. Under these circumstances, he owed the duty to appellees to inform them that the certificate of purchase could be had for the price demanded by the holder of it, and that the Blackwells were not able to procure the money with which to buy it before he could buy for himself and defeat their claim. He did not notify them of the fact and knew that the Blackwells 'had not done so when he purchased the certificate through another person, and had it assigned in blank, and equity will not permit him to defeat the lien of appellees by any such transaction, regardless of what his intentions in fact may have been in the purchase. He stands in no better position than his principal Blackwell would have occupied had the certificate been purchased by and transferred to him, who, of 'course, could not have defeated appellee’s lien thereby. (3) Although it is true that fraud is never presumed, and when a transaction does not necessarily import fraud and may as well have occurred from a good as a had motive, that fraud will not he inferred; still fraud need not he shown hy direct or positive evidence, hut may he proved hy circumstances. Irons v. Reyburn, 11 Ark. 378; Splawn v. Martin, 17 Ark. 151; Phelan v. Dalson, 14 Ark. 79; Russell v. Brooks, 92 Ark. 518. It may he conceded that the certificate of purchase was purchased hy Shafer without any intention in fact to defraud the appellees or defeat the enforcement of their lien against the lands, and also without any agreement or intention to resell the lands to the Blackwells or hold them for their benefit, hut should the law sanction the transaction disclosed hy the record, it would in effect permit him to defeat them of their right and deprive them of their lien under such circumstances as would amount to legal fraud, and upon the testimony in the record, with the inferences fairly deducible therefrom, we are not able to say that the findings of the- chancellor are clearly against the preponderance of the testimony. The decree is affirmed. Smith, J., dissents.