430 JOHNSON V. YOUNG MEN 7 S BLDG. & LOAN ASS 7 N [187 J OHNSON V. YOUNG MEN 7 S BUILDING & LOAN ASSOCIATION. -4-2996 Opinion delivered May 8, 1933. 1. DEEDS — PRESUMPTION OF ACC E PTANCE.—Aceeptance of a deed to a son from his parents will be presurded where the grant is beneficial to him. 2. D EEDS — ACCEPTANCE.—A deed to a minor son from his parents ' may be accepted by them for him. 3. D EEDS— DELIVERY.—Any disposal of a deed, accompanied by acts, words or circumstances which clearly indicate -that the grantor intends that it shall take effect as a conveyance, is a sufficient delivery. 4. DEEDS— DEMIVERY.—Where parents executed a deed to their 'son, intending to retain possession of the property deeded until death of one of the parents, their retention of the deed and failure to record it held not to overcome the presumption of delivery. 5. DE EDS— PRESUMPTION OF DELIVERY.—Where parents executed a deed to their son, intending to retain possession of the property until the death of one of the grantors, their continued possession and control and their leasing of the property held not to nullify the apparent intention of delivery. Appeal from Craighead Chancery Court, Western Ditrict ; J. M. Futrell, Chancellor; affirmed. STATEMENT BY THE COURT. This suit was instituted in the Craighead Chancery Court by R.. L. Johnson, appellant, against the Young Men's Building & Loan.Association and C. W. Claunch and C. L. Claunch, appellees, seeking to recover on two promissory notes executed by the building and loan association and indorsed by appellee, C. L. Claunch, and others. One of the notes was originally for . the sum of $10,000 and the other was for the sum of $2,000. Certain
ARK.] JOHNSON v. YOUNG MEN I S BLDG. & LOAN Ass 7N 431 payments were made on the notes prior to the filing of the suit,-but the aggregate amount of these payments is not in controversy. Another suit was filed by tbe Chase National Bank and the banking commissioner in charge of the American Trust Company of Jonesboro against the same defendants seeking similar relief. The two suits were consolidated for trial and were determined by the chancellor against the contention of the appellant and the Chase National Bank. The cases were presented to the chancellor upon the theory that a conveyance made by C. W. Claunch and his wife, Mary A. Claunch, to the defendant, C. L. Claunch, under date of January 12, 1923, was fraudulent and void as against the rights of the appellant. The trial court found against the contention of appellant, and this appeal is prosecuted to reverse this decree. Since the only question presented for review is a determination of a question of fact, it will be necessary to review at some length the testimony. C. AV. Claunch testified, in effect, that Mary A. Claunch was his wife, and that she departed this life on January 5, 1931 ; that C. L. Claunch was their son ; that they had one other child, but that she died in infancy ; that for a long number of years he and his wife were in the hotel business in the town of Jonesboro; that more than 20 years ago they determined to erect a new hotel building in Jonesboro; that prior to their marriage Mary A. Claunch was a widow and operated the American Hotel in Jonesboro, and that she owned at that time a two-story frame house and a cottage, which two properties were valued at $9,000; that this hotel property which was owned by his wife at the time of their marriage was operated by them jointly for some 21 years, and until they erected the Claunch Hotel in Jonesboro; that on April 20, 1909, his wife purchased lots 3 and 8 of Moore's subdivision of lot 2, block 15, Flint's Addition; that in 1910 he purchased lot 4 in the same addition, and they erected their new hotel npon this property ' ; that the value of his wife's property, or about $9,000, was paid by her into the new hotel building; that afterwards his wife and he purchased lots 9 and 10 of the same subdivi-
432 JOHNSON v. YOUNG MEN 'S BLDG. & LOAN Ass 2 N [187 sion and paid therefor $13,500; that the deed was made to the witness and his wife jointly ; that this $13,500 was paid by him and his wife out of funds derived from the operation of the new hotel, and that their son, C. L; Claunch, furnished either $900 or $1;100 ; that in 1912 his wife purchased lots 6 and 7 of the same subdivision, which was deeded to him and his wife jointly. On this property is a one-story building. In 1917 his wife bought the west half of the southeast quarter of section 16, township 15 south, range 5 east, and took title thereto in her own name. All these properties were conveyed in a deed under date . of January 12, 1923, to their son. Witness further testified that when he purchased . lot 4 and part of lot 3, upon which the new hotel was built, he intended to have the •conveyance made to him and his wife jointly. When asked why he . and his wife had executed the deed of Jnnuary 12, 1923, to their son, the wit-- ness answered : "Well, my wife and I had been talking about our boy a lot, and, like lots of other people, we had all the confidence in the world in him, and we decided that,' if either of us died, he would have to, step in and be the sole manager of -everything, and we made this deed giving him •the property." . • Witness further testified that at the time this deed was executed he did not owe any debts to any one, neither did his wife owe a dollar ; that he had no intention whatever of defeating any creditors, because he had none, and did not expect at that time to ever have any creditors ; that sometime during the year 1928 he became an in-dorser for the building and loan association for certain indebtedness, and this was the first indebtedness that he had created since the execution of the deed to his son in 1923 ; • that Charles, their son, was about 17 years old when the deed was executed; that witness prepared the deed from himself and wife to their son, and they both acknowledged it before Mr. Barnett, a notary public, at the .First National Bank in Jonesboro; that, prior to making the deed, he discussed the matter with the late Judge R. H. Dudley, an attorney of Jone8boro; and that he advised him that it was not necessary to record the deed since he and his wife owed no debts ; that he and
ARK.] JOHNSON V. YOUNG MEN 'S BLDG: & LOAN ASS 'N . 433 his-wife continued to operate the property for their son from the time the .deed was. executed in 1923 until: they leased the same to Mr. Smith several years afterwards: Witness further testified that, when they. executed the deed to their son, 'Ave put it in the safe at the hotel. My.- wife, Son and I . all knew the combination,, and all: had access to the- contents of tbe safe. My son's mother told me she had explained it all to him, but I did not tell him. • • , Witness further testified that all tracts of land, re- gardless of who held tbe nominal title, were purchased with the joint efforts and with the joint money of himself and wife; that nothing was reserved about the : title to the 'property except its management; that :witness-managed the-.property during the niinority of his son.; that his son went off to school in September, 1923; .that the son had-access to the deed at all:times• after its execution and could have had actual:possession of the deed if he . had wanted. it ; that;.after his wife . died.in March, 1931, he had the deed p laced of record; that he and . his-wife attended to.all the propertT for their son up to' tbe time '.of his wife's death; that he and :his wife agreed before. the: deed was executed in 1923 that if be should die bis wife could not. look after. the.property, and if She-should die that-he could not look after.it ; that he told no one about this except Judge Dudley; that at the time this deed.was executed he had no idea.of becoming surety for the building and• loan :association or .. any one else; that his and his .Wife's•understanding was tha-f:the deed was to be kept off the record- until :after one , or the other, of tbem passed away ; that there was no reason for this; but. that it was their understanding•and agreement ; that the son executed a .power of attorney: to •him in January, 1931.; that he and bis wife would discuss matters . about the property with :their son after- the execution of the deed and would confer with him about the business infer-- ests ; that he and his wife paid the faxes which were as7 sessed against the property and kept no account thereof against the son; that witness had no property after this deed was placed of ° record ; that he began . carrying the bank account in the name of his son in.March,- 1931.
434 JOHNSON V. YOUNG MEN'S BLDG. & LOAN Ass'N [187 • Witness further testified that he and his wife, on March 20, 1930, executed a lease on the hotel property to H. E. Smith and' wife, which lease contained the following clause!' "First parties . undertake and warrant that they have good title to all property, both real and personal, included in this contract and good right to convey or lease same, and do warrant to second parties quiet and undisturbed possession in and to said hotel property and appurtenances thOrewith connected during the term of said lease." Charles L. Claunch testified, in effect, as follows : That he is 25 years old, a resident of Chattanooga, Tennessee, and is an attorney at law ; that he is the only child of Mary A. and C. W. Claunch ; that his father and mother made him a deed to all the property in controversy on January 12, 1923 ; that he has discussed it in a general way at different times during the past several years„and that he undetstood all along that he owned the property ; that he understood all along that the deed was delivered at the time it was executed; that during -all years since its execution it has been accessible ta all the family, part of the time in the safe at the hotel aTml part of the time M a deposit box in the bank ; that his mother discussed business Matters with him : at various times since he reached the age of discretion; that his mother was a womaa of considerable * business .capacity, and he always regarded her as the business head of the family; that he went to school in Virginia in 1923 and began practicing law in Chattanooga after his graduation; that he knew all along that his father and mother were handling, renting and managing the property ; that it was satisfactory with him; that the new hotel property waS purChased with the proceeds . of his mother's property prior to the marriage of his father and mother ; that his mother was active in the management of the new hotel and had an aversion to creating debts, and never became surety on any paper ; that she owed no debts in 1923 and did not owe any at the time of her death in 1931; that she told witness about the execution of the deed and where it was ; that she discussed the property with him
ARK.] JOHNSON V. YOUNG MEN 'S BLDG. & LOAN A.ss '1■T 435 as his property and relied upon the execution of the deed as conveying it t6 him ; that he had • taken particular notice of the deed on several occasions while it was in the safe at the hotel ; that the details of handling the prop-. erty since the execution of the deed have_ been in his father's hands ; that since recording this deed his father and mother have drawn checks on his account of renis to the. extent of several, hundred dollars ; that his father is entitled to receive out of the property whatever he needs ; "he is at liberty to draw checks against my bank account at Nettleton by signing my name by him.- He has a power of attorney to" sign checks, and can do it to any extent he pleases, provided he did not go contrary. to my wishes, which he has never done." Fred C. Barnett testified, in effect, that in January, 1923, he was assistant cashier of the First National Bank ; that he knew Mr. and Mrs. Claunch and their , son, Charles ; that he was a notary public on January 1 1923, and took the acknowledgment to the deed from Mr. and Mrs. 'Claunch to their son, Charles L. Claunch ; that the date of the deed, January 12. 1923, was its true date ; when the deed was presented to him for acknowledgments witness remarked, "On the stationery it" says, ' The future proprietor,' and I remarked to bim about tbe stationery : 'You are giving him the hotel?' or something to that effect." That at the time this deed was executed he knew the business condition of the Claunches ; that they had plenty of money ; actual cash on deposit usually from four to six thousand dollars ; didn't think he owed'anything. ,"Mrs. Claunch was above an average business woman." That he figured the wife and Mr. Claunch operated the hotel jointly. Upon the testimony outlined above; the chancellor held that there was an effectual deliver of the deed frOm C. W. Claunch and wife to their son, Charles L. Claunch, on January 12, 1923, and therefore dismissed the plaintiff's complaint for want of equity. Basil Baker and E. L. Westbrooke, for appellant. Chas. D. Frierson and Charles Frierson, Jr., for appellee.
-436 j OHNSON V. YOUNG..MEN'S BLoG. & LOAN ASS'S -_[1.87 JOHNSON, C. • ., (after stating the facts). It is apparent from-the foregoing statement of . facts that but one question is pygsnted here for determination, namely.: Was. there a delivery And acceptance of the deed dated January 12,1923, from C. W. Claunch and wife to their 'son; C. L. Claunchl -- • - • The acceptance of tbe deed-in the instant caSe will be presumed because the grant is beneficiaI-to the grantee, and, in • addition to this, his father or mother Could have accepted the grant for -him, the grantee then being a minor. Graham v. Suddeth, 97 Ark. 283, 133 S. W. 1023. This -court has -clearly- stated the rule in reference to the delivery of a deed-as follows : - "Any disposal of a -deed Accompanied by acts, words or circumstances which clearly indicate . that the grantor intends_ that it shall take effect as a conveyance is , a slid-ficient delivery.7-R . u .ssell v. May,. 77 Ark: 89, 90 S. W. 617. The-facts and circumstances in the instant case are to. the following ', effect : . . C. W. Claunch and wife had but one -living child, the grantee in the deed of January 12, 1923. Tbe wife and mother, owned and cOntributed toNyards the purchase of this property equally with her husband. -A very valuable portion of the, property was owned by them under conveyances which effected:an estate by -the entirety. The mother and father desired to avoid the -consequences of this .estate by executing deed to their only child, _thereby preventing either . survivor taking the title . in the event of death, : . . . It-is perfectly evident that the -mother joined in this deed with the specific intent . of. vesting a present title-in the son because she could have.bad no other reason for executing tbe deed, . She . owed no debts at the time the deed was executed, and owed no debts at the time . of her death in . January i 1931.. She had told her son of the deed and of her wishes on many occasions and had so advised her husband. The husband stands in no different light except be contracted certain surety liabilities beginning in 1928, some- five years after the execution of this deed. It is insisted on behalf of appellanf • that the retention of the deed by the grantors destroys their apparent
ARK.] J OHNSON V. YOUNG MEN'S BLDG. & LOAN Ass'N 437 intention of delivery. This is not the case. It was the purpose of the grantors to retain possession of the property until the death of one or the other of them. This is not'always inconsistent with the grant or intention of delivery of the deed. • This court held in Cribbs v. Walker, 74 Ark. 104, 85 S. W. 244, quoting from the fourth headnote : "The fact thaf a deed . was found among the effects of the grantor at his death raises no presumption against delivery if the grantor reserved an interest in the prop: erty conveyed, and therefore bad an interest, in the preservation of the deed." • Since the grantors bad the intention and . purpose of retaining the pOssession of the property until the death of one Or the other of . them, they had the right Io retain the deed to effectuate this purpose. It is next insisted by appellant that the failure to have the deed recorded is fatal to the presumption of deliverY. We canna agree to this. This court held in Irwin v. Dug ger, 142 Ark. 104, 218 . S. W. 177, quoting from the fourth headnote "The mere facts that a debtor did_not record a deed to him of land, and that his wife and son did not record deeds from him, are not of theMselves sufficient eviderice of fraudulent purpose as to constitute fraud in law, but are circumstances tending tO impeach the want of good faith of the parties." The recording of the deed in the instant . case might have defeated tbe purpose of• the grantors in retaining possession and control Of the' property until the* death of one of them, and we think a fair explanation . of it. • It is next insisted thaf the continued posSeSsioU aud • control of 'the' property' by the grantors and their lease of the property for a term . of years nullifies the •Af3parent intention of delivery. Neither can we agree to this:Their continued possession and contrel was :nothing More nOr less than . the eajoyMent Of the .estate'retained'-by them or which was . ihtended to • be retained and enjoyed:-',. No -errer appearing, the decree is affirmed.* •
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.