(273 S.W.)

time within 15 days to inspect and reject the AMERICAN INV. CO. v. WARDLOW et al. Benton county land in lieu of the $7,700 cash

(No. 58.)

(Supreme Court of Arkansas. June 15, 1925.) Mortgages 183-Vendor held estopped to claim vendor's lien superior to subsequent mortgage.

Where vendors in consummation of contract for exchange of property gave warranty deed to one designated by agent of the other party to the exchange, to enable loan to be made thereon, and mortgage company subsequently making such loan knew that vendors had conveyed for that purpose, and not in reliance on their vendor's lien, although it also had notice that consideration recited in warranty deed had not in fact been paid, held that vendors were estopped from asserting that their vendor's lien was superior to the mortgage lien.

Appeal from Benton Chancery Sam Williams, Chancellor.

payment, and, if the land were rejected as the payment, the contract was to be treated as canceled, and all papers relating to the deal were to be returned. If and when consummated Wardlow was to be entitled to the landlord's share of the crop then growing on the Texas land, and the landlord's share of the crop on the Arkansas land was to go to the farms company.

McNear and Mrs. Sands returned with Wardlow and his wife to this state, and on February 11, 1922, they went to Wardlow's house to inspect the 77 acres. They took with them E. W. Ford, of Siloam Springs, to take the acknowledgement of Wardlow and

his wife to a deed for the 77 acres. Ford was a notary public and the agent for procuring Court: loans of the American Investment Company of Oklahoma City, Okl.

Action by F. T. Wardlow and another against the American Investment Company. From a decree for plaintiffs, defendant appeals. Reversed and remanded, with directions.

McNear, and he directed Wardlow and wife The land was inspected and accepted by to execute and deliver to him a warranty deed, in which one J. B. Lamerre was named as grantee, and this deed recited a consideration of $3.000. Wardlow testified that the

McGill & McGill, of Bentonville, for appel- deed was made to Lamerre, instead of the lant. farms company, for the reason that McNear Floyd & Beasley, of Bentonville, for ap- explained that it was better to have the title pellees.

SMITH, J. D. D. Wardlow owned a 77acre tract of land in Benton county, Ark., and in the spring of 1922 he and his wife went to Hidalgo county, Tex., on an excursion train conducted by T. W. McNear, Jr., and a Mrs. Sands, who were the agents of the United Farms Company, a corporation engaged in selling real estate in Texas. The Wardlows were shown, upon their arrival in Texas, a farm of 22.61 acres, which they contracted to buy at the price of $450 per acre, which totalled $10,174.50. They executed a note for $7,700 and another for $474.50, both payable on demand, and agreed to pay the $2,000 balance of the purchase price by assuming the payment of vendor's lien notes for that amount, payable in five equal installments, against the Texas lands.

By the terms of the contract of sale the farms company agreed that, on or before May 1, 1922, or within a reasonable time thereafter, it would deliver to Wardlow a warranty deed of date February 8, 1922, to the 22.61 acres, with an abstract showing a good and merchantable title, the same to be passed upon by any reputable licensed attorney in the lower Rio Grande valley, and a reasonable time was to be allowed the farms company to meet and answer any requirements made by the examiner in regard to the title.

The contract of sale provided that the farms company should have the right at any

in the name of an individual so that they could more easily procure a loan on the land and pay off the vendor's lien on the Texas land, which was stated to be $2,000. Wardlow further testified that McNear agreed that he would take the deed and the contract to Kansas City and have them approved by the farms company, and that not more than 30 days would be required for that purpose, after which the Farms Company would pay off the lien on the Texas land and send Wardlow a deed to the Texas land and an abstract of the title thereto. Upon the execution of the deed by Wardlow to Lamerre, McNear surrendered to Wardlow the $7,700 note. Soon afterwards the Farms company wrote Wardlow requesting payment of the note for $474.50, and on February 27th Wardlow remitted to cover this note, which was returned to him marked paid on March 6th.

In the meantime Wardlow went to Kansas City to see if he could get the farms company to rescind the contract of sale, but that company declined to do so. Wardlow then announced his willingness to proceed with the contract, and asked that it be completed at once, and advised the farms company that he could get the money to pay the $2,000 note, but was advised that the company was arranging to make a loan with the Benton county land as security to pay off the vendor's lien notes against the Texas property.

The testimony establishes the fact that the proceeds of the mortgage loan, application for which had been made in the name of

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Lamerre, was to be applied to the satisfac-mony fails to establish the fact that the tion of the outstanding vendor's lien on the Texas land, which was represented to be $2,000, but which proved to be something over $3,000, with the interest and costs of the foreclosure proceeding which was had in Texas to enforce that lien. This proceeding in Texas appears to have resulted from the delay in discharging that lien.

We think the testimony supports the appellees' contention that the mortgage company knew that the Wardlows had conveyed to Lamerre for the purpose of obtaining money to apply on the vendor's lien on the Texas land, and that the consideration of $3,000 recited in the deed from the Wardlows to Lamerre had not in fact been paid. For some reason, which is not made plain, Lamerre conveyed to Mrs. B. W. McNear, and the loan was finally made to her. This loan was for only $1,500, and it does not appear from what source the balance needed to discharge the lien on the Texas land was to be secured. We think it may also be said that, notwithstanding this conveyance from Lamerre to Mrs. McNear, the mortgage company remained charged with notice of the fact that the consideration recited in the deed from the Wardlows to Lamerre had not been paid.

It was, of course, impossible to close the original contract of sale after the Texas land was sold under the decree forclosing the vendor's lien, and the Wardlows brought this suit to cancel this contract of sale, and to have a vendor's lien declared in their favor for the $3,000 consideration recited in their deed to Lamerre, less a small amount of rent which the Wardlows had collected on the Texas land. The relief prayed was granted, and the court decreed a lien in favor of the Wardlows for $3,000, and adjudged that this lien was superior to the mortgage lien for $1,500, and directed a sale of the property in satisfaction thereof.

To affirm this decree, appellees invoke the rule, and cite cases supporting it, that a subsequent purchaser or incumbrancer who has knowledge of the fact that a portion of the purchase money due on a sale of land remains unpaid is not protected against the equitable lien of the vendor. Appellant concedes the correctness of this rule, but contends that it does not apply here for the reason that the testimony shows that the vendors were not relying on this lien as security for the consideration recited in the deed from them.

As we have said, we think the testimony is sufficient to charge the mortgage company with notice of the fact that the $3,000 had not been paid the Wardlows, but the testi

mortgage company had any notice that the proceeds of the mortgage loan should not be paid to the mortgagor to whom the loan was made. Had the loan gone through as the parties contemplated, the Wardlows would have acquired the Texas property, and their conveyance to Lamerre would have operated to completely divest them of the title to the Benton county land.

The testimony is very clear that the purpose of the deed to Lamerre was to enable him, or his vendee, to negotiate a loan on the To clear up the title Benton county land.

to this land so that the loan could be made it became necessary to meet certain objections which the examiner of the title made thereto, and Wardlow assisted in meeting these requirements.

We conclude, therefore, that the mortgage company, although it knew the $3,000 had not been paid, was warranted in believing that the Wardlows were not relying upon the equitable lien to secure its payment. Indeed, we think the Wardlows are estopped from asserting that their vendor's lien is superior to the mortgage lien after they had conveyed the apparent title for the purpose of enabling their vendee to procure a loan, knowing, as we think the testimony shows, that the mortgage company was asked to make the loan upon the assumption that the mortgage lien would be the first lien. We think there is no testimony upon which to base a finding that the mortgage company would have made this loan except the assumption that the mortgage lien would be the first lien when the loan had been closed.

The loan which was made was made to the person who held the record title, and' we think, under the circumstances, the mortgage lien is superior to the lien of the Wardlows, although the mortgage company had notice that the $3,000 had not been paid the Wardlows.

The testimony does not show that the Wardlows ever directed the mortgage company not to proceed with the loan.

We conclude, therefore, that the court below was in error in decreeing that the Wardlows' equitable vendor's lien was superior to the mortgage lien, and that decree is reversed, and the cause will be remanded, with directions to enter a decree adjudging the mortgage lien to be superior to the lien of the Wardlows.

Only the mortgage company has appealed from the decree of the court below, and we therefore consider only the question raised on its appeal, that of the priority of its mortgage lien.

(273 S.W.)

3. Sales

479 (14)-Buyer sued by seller held not precluded by sale of equity to third party from maintaining cross-action against seller for latter's failure to resell article repossessed pursuant to Tennessee law.

That original buyer, under a conditional sales contract governed by Shannon's Code (Tenn.) §§ 3666, 3668, 3669, sold his equity in the article to a third party with the seller's consent, held not to preclude such buyer, when sued by the seller on the original contract. from maintaining cross-action against the seller based on latter's failure to resell the property according to such statutes.

4. Courts 511-Right created in favor of buyer by law of another state will be enforced through comity.

A right created in favor of a buyer by the law of Tennessee (Shannon's Code, §§ 3666, 3668, 3669), will be enforced through comity by the courts of other states.

On Rehearing.

$1,760 upon a note given for the purchase money of an automobile bus. It was alleged in the complaint that appellant sold the bus to appellee in Memphis, Tenn., under a conditional sales contract for $6,134, of which sum $1,134 was paid in cash, the balance being payable in installments, evidenced by seven promissory notes; that the conditional contract provided that the title to the bus should remain in appellant until the purchase money was paid in full, and that upon failure to pay same at maturity appellant should have the right to repossess and sell it at public auction, credit the amount received on the purchase money, and recover the balance from appellee; that on December 12, 1922, there remained due and unpaid $2,288.08, whereupon appellant seized and sold the bus at public sale, at which sale it brought $528.08 and that said amount was applied upon the debt, leaving a balance of $1,760.

Appellee filed an answer admitting all the allegations in the complaint except the allegation that appellant sold the bus at public sale in the manner provided under the law in Tennessee; and also filed a cross-bill to recover $4,000 which he had paid appellant on the purchase price of said bus, upon the ground that appellant had rescinded the contract by failing to advertise and sell the bus in accordance with the laws of Tennessee.

The cause was submitted to a jury upon the pleadings, testimony, and instructions of the court which resulted in a verdict in favor of appellee on his cross-bill for $4,200 which was reduced by the court to $3,900. A judgment was rendered in accordance with the verdict as reduced, from which is this appeal.

[1] A motion for a new trial was filed upon several grounds, one of which was that the verdict returned by the foreman was not the verdict of the jury. Appellant introduced two of the jurors in support of his motion who testified, in substance, that the verdict agreed upon by the jury was to the effect that neither appellant nor appellee should recover anything from the other, and that neither had assented to the verdict returned into court by the foreman of the jury. On cross-examination, however, they admitted that, when the verdict was returned and read by the clerk, the court asked if it was the Appeal from Circuit Court, Crittenden verdict and they, with the other jurors, held County; Geo. E. Keck, Judge.

5. Appeal and error 171(1)—Party on appeal cannot contend for theory of case different from that contended for in trial court. Party on appeal cannot contend for theory of case which is different from that contended for in trial court.

Suit by the White Company against Z. T. Bragg, who interposed a cross-bill. Judgment for defendant, and plaintiff appeals. Affirmed.

S. V. Neely, of Marion, for appellant.

Caraway & Isom, of Marion, for appellee.

HUMPHREYS, J. Appellant brought this suit in the circuit court of Crittenden county against appellee to recover a balance of

1

up their hands in approval. Section 1300 of Crawford & Moses' Digest provides a method for testing the correctness of a jury's verdict. The statute reads as follows:

"The verdict shall be written, signed by the foreman and read by the court or clerk to the jury, and the inquiry made whether it is their verdict. If any juror disagrees, the jury must be sent out again, but if no disagreement is expressed, and neither party requires the jury to be polled, the verdict is complete and the jury discharged from the case."

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The purpose and intent of this statute was to prevent a juror from impeaching the verdict after it had been returned into and accepted by the court.

"It is well settled that a juror will not be heard to say that he never assented to the verdict after an opportunity has been given him to express his dissent when the verdict was rendered." 3 Ency. Ev. 228; 8 Enc. Ev. 973. The motion to set aside the verdict was properly overruled.

[2] The statute of Tennessee covering conditional sales of property, digested in Shannon's Code, is as follows:

"When any personal property is sold upon

condition that the title remain in the seller un

* 串

ey due on the notes; that the balance due thereon was $2,288.08 and that appellant took possession of the bus in Memphis for the purpose of selling it in accordance with the terms of the contract and the laws of Tennessee. There is a conflict in the testimony as to whether the sale of the bus was ad vertised and made in accordance with the law. This issue was submitted to the jury under correct instructions and decided adversely to appellant. The finding of the jury is, therefore, conclusive upon it.

[3, 4] Appellant makes the further contention, however, that because appellee had sold his equity in the bus to O. B. Cook he had no right to recover the amount he paid appeltil that part of the consideration remaining lant as purchase money for the bus. The unpaid is paid, it shall be the duty of said sell-record does show that by and with the coner, having regained possession of said prop- sent of appellant, appellee sold his equity in erty because of the consideration remaining unthe bus to O. B. Cook, but also shows that paid at maturity, to, within ten days after re- appellant did not release appellee from the gaining said possession, advertise said property original contract. On the contrary, appellant for sale to the highest bidder, by brought suit against appellee upon the orig. said no-inal contract. We are unable to see why appellee cannot maintain a cross-action under the original contract if still bound by the contract. The Tennessee statute provides that the original purchaser may recover the purchase money paid to the vendor if said vendor retakes the property and fails to sell it at public sale after advertising the sale in the manner and for the time prescribed by the statute. The statute created a right and not a remedy and the right will be enforced, through comity, by courts of other states. No error appearing, the judgment is affirmed.

* * * to

* printed posters, tice to be posted at least ten days before the day of sale, and to contain a description of the property to be sold, and time and place of said sale. Unless the debt is satisfied before the day of sale, then it shall be the duty of said original seller * sell said property, and, with the proceeds of said sale, satisfy the amount of his claim arising from said conditional sale, and the expenses of advertisement, if any, and the remainder of said proceeds, if any, he shall pay over to the original purchaser; but the said original seller and purchaser may at any time, by agreement, waive the sale provided in this article."

*

The Supreme Court of Tennessee upheld this act as constitutional and construed it as meaning that:

"It is the positive duty of the original vendor to resell the property upon his reclamation thereof under the contract, and for his failure to do so within the manner and time required by the statute, the original purchaser may recover from him the entire amount paid on the contract, without set-off or abatement for the use, hire, or rent of the property.”

See Shannon's Code 1917, pages 3345-3348. The undisputed testimony shows that on December 12, 1922, default was made in the payment of the balance of the purchase mon

On Rehearing.

[5] On rehearing, our attention has been called to the fact that appellee sold his equity in the bus to O. B. Cook, and that his right as original purchaser under the statute of Tennessee to recover the amount he paid appellant had passed to the subvendee. Appellant has cited the case of Teshopick v. Lippincott (Tenn. Ch. App.) 48 S. W. 130, in support of its contention that appellee had no right to recover on his cross-bill, because he had sold his equity in the property to O. B. Cook before filing same. This question was not made an issue in the trial court by the pleadings, testimony, and instructions of the court. It is well settled in this state that "a party cannot on appeal contend for a theory of the case different from that which it contended for in the trial court." Southern Ins. Co. v. Hastings, 64 Ark. 253, 41 S. w. 1093; Shinn v. Plott, 82 Ark. 260, 101 S.

W. 742. In view of this rule, it is unnecessary for us to discuss the effect of the decision cited upon the Tennessee statute involved in the instant case.

The motion for a rehearing is therefore overruled.

(273 S.W.)

2. Chattel mortgages 48 Description of mortgaged property held sufficient to create lien thereon as against subsequent mortgagee. Description of property in chattel mort- On the 15th day of February, 1923, C. S. gage, as being on a sufficient portion of undi- Beck executed a chattel mortgage on his onevided half interest of mortgagor in a rice crop half interest in the rice crop to be grown on of 200 acres, more or less, to be grown on his the land in 1923 to Peter Beckler, to secure farm during year of 1923, to pay an indebted-him for advances made in the sum of $2,755.ness which he owed mortgagee, held sufficient to create a lien thereon as against subsequent mortgagee.

Appeal from Prairie Chancery Court; Jno. vate and produce during the year 1923, on what E. Martineau, Chancellor.

HART, J. (after stating the facts as above). The record shows that the mortgage given on the rice crop by Beck to Snerly was filed for record prior to the mortgage on the same crop given by Beck to Beckler, and that no part of the mortgage indebtedness of either

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