AR K . ] B EL OATE V. LESS. 907
BEL OATE V. LESS. 4-4582 Opinion delivered April 5, 1937. 1. TRIAL—FINDINGS, EFFECT OF.—The chancellor's finding that "there was a complete and full settlement between the parties in Feb-ruary and March, 1929, as Of January 1, 1929, and that accounting should date 'from January 1, 1929, was, in effeci, a dismissal of claims growing out of transactions from 1917 to 1929. 2. PRINCIPAL AND AGE NT.—Uhder principal's cross-complaint praying that the agent account for his management of farm property, evidence held to show that principal was entitled to a greater sum than was awarded by the • decree. A P PEAL AND ERROR. — Cross2 complainant aggrieved by amount of • award in an action for aceounting is; where particular inac-cnracies in chancellor's findings are not indicated, precluded from objecting thereto on appeal. 4. A PPEAL A ND ERROR.—Where the judgment against appellant was smaller than it should have been, he will not, on appeal, be heard to coinplain of inaccuracies in the finding as . to amount. LIFE ESTATES—FORFEITURE FOR NONPAYMENT OF TAXES. —Craw-ford & Moses' Dig., § 10054, providing that if a life tenant neglects to pay taxes and the lands are sold,.such tenant shall forfeit the estate, does not apply to a void tax sale, and the chancellor may, in such case, properly refuse to declare a forfeiture at the instance of the remainderman. APPEAL AND ERROR —SALE FOR TAXES— PRESU M PT ION.—Where the ' proof on the issue as* to whether a tax sale of lands was void was insufficient for the Supreme Court, on appeal, to pass on the question, the chancellor's finding that the life estate involved should not be forfeited raise's 'a presumption that he regarded the sale as void or voidable. . Appeal from bawrence Chancery. Court, },lastern District; A. S. Irby, Chancellor ; affirmed. . Richardson& Richardson, W. A. Jackson and Horace Chamberlin, for appellant. White, White & White, O. C. Blackford and Smith . & Judkins, for appellees. GiuFFIN SMITH 1 C. J. Ida Less Kory, defendant and cfoss-complainant in the Lawkence chancery . • court, secured judgment • against W. •E. Beloate for $5,203.14. Beloate is here on appeal* Others have appealed frem certain provisions of the decree in which Mrs. Kory was
908 BELOATE V. LESS. [193 given judgment. The litigation is somewhat involved, and a detailed statement is necessary. Isaac Less, of Walnut Ridge, was divorced from Gussie Less in 1905. A number of years later he remarried, and died in 1917. His second wife remarried, and is now Ida Less Kory. In September, 1935, Jake Less, Morris Less, Minnie Less, Marion Less, and Emily Less Meyer, as sole heirs of Isaac Less, filed suit against Ida Less Kory, W. E. Beloate and others. They alleged that Mrs. Kory, as the widow of . th e fat i h r er , , was properly in possession of lands assigned to her as dower, and that Beloate was her agent, she being a resident of St. Louis. In substance, the charges were that through negligence in handling the .property it has deteriorated; that general and special taxes were not paid, and that part of the property had forfeited and had been sold. For these reasons the possession 'they would take upon termination of the life estate was being impaired. It was claimed that total tax delinquencies amounted to $6,020.83. They asked that the rights of Ida Less Kory as life tenant be forfeited, and that they have other relief. Without notice to the defendant, Beloate, Erwin Spikes was appointed receiver. On September 18, 1935, he made a report showing that the estate consisted of approximately 846 acres of farm lands in Lawrence county ; also four buildings in Walnut Ridge which were yielding $115 per month in rents. Beloate answered the suit of Jake Less et als., and in a cross-complaint asked damages of $2,500, and prayed that the receiver be dicharged. In anwer to the complaint of Less et als., Mrs. Kory admitted plaintiffs were the sole heirs of Isaac Less ; that the real property in controversy was set aside as her dower; that W. E. Beloate was her attorney and agent, and as such was in control of the property, and that the estate had forfeited -and had been sold for taxes. By way of cross-complaint, she alleged a written contract with Beloate, by the terms of which he was obligated to pay all taxes, keep up repairs, and pay expenses, and in
ARK.] BELOATE V. LESS. 909 addition remit to her $3,000 annually. She charged that, unknown to her, Beloate had failed to pay the taxes, and as a consequence of this negligence "and wilful failure" certain third parties had become alleged owners of the property. She further alleged that through mismanagement the property was deteriorating, that Beloate knew of the tax forfeitures, and failed to notify her of the foreclosures; that though repeatedly requested to do so, he refused to supply her with statements or to make a proper accounting ; that in 1929 she and Beloate adjusted outstanding differences and agreed that thereafter Beloate should continue to act as agent under the existing written contract whereby she was to receive the net sum of $3,000 annually, and Beloate was to pay taxes and maintain the property, and that he had defaulted in these obligations. An answer and cross-complaint to Mrs. Kory 's pleadings were filed by Beloate. It was true, he said, that in 1929 there was an adjustment of accounts, but it did not include certain contingent balances of which Mrs. Kory was well aware. Reference is here made to an opinion delivered by this court. on November 11, 1929. Kory v. Less, 180 Ark. 342, 22 S. W. (2d) 25. The decision was on an appeal from the Lawrence chancery court where the heirs of Isaac Less brought suit against Ida Less Kory and W. E. Beloate. The same property involved in this appeal was the basis of the older controversy. It was sought by the former proceeding to have a forfeiture declared on the life estate of Mrs. Kory ; to have a lien declared in favor of Gussie Less for $140 per month by reason of a settlement made prior to her separation from Isaac Less ; to restrain Ida Less Kory and W. E. Beloate from committing further waste, and to have judgment for damages. On application of plaintiffs, a receiver was appointed, and after a hearing judgment was entered against Mrs. Kory for certain sums. A part of the opinion rendered by this court on that appeal reads as follows : "After a careful consideration of the entire testimony, we have reached the conclusion that the chan-
910 BELOATE V. LESS [193 celloi's finding against the appellant (Mrs. Kory) as to waste consiSting iii daniages to the property is against the preponderance . of the evidenCe. As to all other is, 'sues, we think the finding of the chancellor is Supported by a preponderance of the evidenee." The opinion also Says: "The propefty was taken by Ida . Less subject to chatge of $140 a: month:in favOr of Gussie Less, -Mrs. Kory's portion of whiai was $46:66 per month. The property was also subject to a mortgage tO the Com :non-wealth Farm Loan Company. When the mortgage -to the COmmonwealth Farm -Loan Company matured, Ida Less refuSed to pay any portion of it, and the heirs paid the mortgage debt; and filed suit against Ida Less (Kory) for contributiOn. She' paid-her part, Which was $8166.40. In the same suit the amount due G-uSsie Less: was fixed at $4,209.22, with interest. This•was declared a lien on the lands set aside to Ida-Less (Kory) :as dower: She was, however, given the priVilege to pay this amount due G-ussie Less at. $46.66 anienth.:* * After crediting certain amounts the 'chancellor found against Ida Less KorY in favor of Gussie Less in the sum of $1,430.21." BelOate, in the :suit now on appeal, 'admitted :execution of the original agency agreement of 1917 but said that in:1918 it was; found that management of the properties required more. of-his -time than had .beeri anticipated, and, due to fixed .obliations against the property, there was donbt that the Contract- was of material value to him. Therefore, about February 1,1.918,. he went to St. Louis and talked with Mrs.-Kory. At that time, he sayS, bY oral agreement, he was released*from his obligation to make -monthly-and yearly reports. He agreed to -meet payments : of $46.66 due Gussie: Less and to pay one-third* of the interest - accruing On the Commonwealth Farm Loan Company• mortgage until its ,maturity; and at- maturity *to pay that pertion :of the principal' charge-able- against the: dower interest. Such payments being liens on the life estate, he Was himself, in turn, to have a lien as security. If at any time Mrs. Kory concluded to 'sell he'r estate or terminate the agency, he should be paid. He construed - Mrs. Kory-'s cross-complaint as cali-
ARK.] BELOATE V. LESS. 911 cellation of the agency, having the effect of maturing her obligations to him under the terms "of the 1918 oral modification of the written contract. There was an admission that the lands had forfeited for taxes, .with the explanation that income had not been sufficient to meet payments; reinit $3,000 per year to Mrs. Kory, maintain repairs; and to discharge interest payment due him on the Gussie Less and Commonwealth Farm Loan Company debts he had paid, of which Mrs. Kory had knowledge. It was alleged, and not denied, that all tax sales were void ; also, that there had .been an agreement that tax payments should be deferred as long as possible after sales, or until . the income from , the property was sufficient to discharge them. , . The further contention was made by .Beloate that many of the issues raised in Mrs. Kory 's cross-complaint were included in and concluded by- the decision in Less v. Kory, supra. After that decision had been rendered he went to St. Louis and met . Mrs. Kory and her attorney (Mr. Powell), and they settled " all matters o ' f rents,, income, and disbursements up to and including Decem-ber .31, 1928, striking a balance and- agreeing that all matters, exclusive of the judgments in • favor of Gussie Less and the Commonwealth Farm Loan Company were fully and satisfactorily settled, and such settlement is pleaded as a bar to any right upon the part of Mrs. Kory to go behind the same." He then alleged that Mrs. Kory was indebted to him in the total sum of $21,021.36. Mrs. Kory, in her cross-complaint, set out a balance of $10,000 due her on rents, with interest, to which should be added $2,120 for notes executed in her favor by Beloate, and sums otherwise due. The Jake Less plaintiffs have appealed froth that portion of the decree denying judgment in their favor for alleged waste, and from the court's refusal to cancel the life estate. The decree directs that the life estate of Mrs. Kory be not canceled ; that the contract of 1917, between Mrs. Kory and W. E. Beloate, as restated - in .1929, be ean-celed ; that Mrs. Kory haVe judgment aainst W. E:
912 BELOATE V. LESS [193 Beloate for $2,987.67 on unpaid notes and interest, and for the further sum of $2,215.47 as the amount of unpaid rents, after allowing credit equitably due; that the claim of W. E. Beloate against Mrs. Kory for monies paid the Commonwealth Farm Loan Company and Gussie Less, and for other itenis, be denied; that the cross-coinplaint of W. E. Beloate against Jake Less and others as heirs of Isaac Less be dismissed for want of equity, and that the receivership continue for such further orders of the court as may be necessary in redeeming property and paying all legal taxes against the estate, and in directing necessary repairs. The judgment against W. E. Beloate, and *denial of his claims against Mrs. Kory, are based upon , a finding by the chancellor that "there was a complete and full settlement between the parties in February and March, 1929, as of January 1, 1929, and accounting should date from January 1, 1929." This, in effect, was a dismissal of claims growing out of transactions from 1917 to 1929—a period of twelve years. One statement read in evidence, inclusive of the years 191:7 to 1927, showed receipts of $77,346.90, 'and expenditures of $86,145.39. It is contended by Beloate that his payMents * were far in excess of receipts, and that he mortgaged his own and his wife's , property to discharge obligations incurred during the period of his' agency. The record here covers 458 pages, and in Less v. Kory, it consisted of more than 1,200 pages. Beloate repeatedly stated that he did not keep books, and says that in 1918, when oral modification of the contract of 1917 was had, he told Mrs. Kory that, in order to properly keep books, an expenditure of $50 per month for help would be required. It is obvious that the method of accounting was woefully incomplete, and it must have been expensively inaccurate. As to this, Mrs. Kory could not coMplain, if she made the agreement which Beloate relies upon to work a modification of the written contract. She was interested primarily in receiving $3,000 annually as rent-
ARK.] BELOATE V. LESS 913 als, and Beloate was to pay expenses from the gross income. Mrs. Kory would not be affected by a failure to record transactions, unless, by reason of drouth or crop failure, the income proved insufficient to pay expenses and rents, in which event accurate records might have been important. The written evidence of settlement in 1929, to which the chancellor gave effect, included a memorandum of items mentioned in the decree then pending in the Supreme Court on appeal, and a reference to the 'receiver 's report. The agreement, omitting the introductory , memorandum, follows : . "Agreed 3/24/29 between Mrs. Kory and Mr. Beloate that of the above items totaling $6,596.54, if the Supreme Court holds Mrs. Kory (in receivership case) shall not pay more than $2,483.69 (which is the above item of $1,483.69, plus not more than $1,000 for the other four items of waste). Then- Mrs. Kory will pay out of receiv.- ership funds said sum of $2,483.69 (or Jess as Supreme Court maY find), and also allow Mr. Beloate a- credit of $500 which she is to advance to him at this time for his use o • n Mr. Chamberlin's fee. Otherwise—if Supreme Court holds she is to pay more than the aforesaid sum of $2,483.69, then no credit of said $500 or any part thereof is to be allowed Mr. Beloate, but he is to pay same in full and also one-half of the said sum of $1,483.69. "Out of receivership funds, which Mrs. Kory gets from receiver, she will advance or loan to Mr. Beloate the sum of $500 (on his note) with which to pay Mr. Chamberlin; and also, the sum of $250 to Mr. Beloate (on his note) with which to pay on printing briefs, abstracts, etc. Said total sum of $750 in Mr. Beloate's notes to be —one note for $375 for one year, and one note for $375 for two years. "Mr. Beloate will take care in full on and of his own account any and all judgments rendered in East Arkan-sas Lumber Company cases ; al§o all fees to Mr. Cham-berlin; also items of $89, $385, and $75, heretofore referred to, to Mrs. Kory ; also take care of all litigation, current and to accrue ; also $3,000 per year rentals (be-
914 BELOATE V. LESS [193 ginning January 1, 1929)—and all other matters under contract; also all current, future and delinquent taxes ; this memo not being meant to include all items of agreement and expense, but only those items above referred to and to be exclusive of none other. . "If Mr. Beloate can do so, as he has already proposed to Attorneys Smith and Gibson, it is agreeable that Smith and Gibson collect . Carty judgment for R. C. P. without cost of collection, out of the proceeds of which R. C. P. will lend Mr. Beloate the sum of $200 on his note for one year—to pay on East Arkansas- Lumber Company claim, provided said claim and suit therefor shall be dismissed and the balance of said claith settled by Mr. Beloate's notes to East Arkansas Lumber . Company in equal sums in one and two years." • • In appellant Beloate's abstract of teStirnom i 'there are references to Correspondence with Mrs: -Kbry, but' the letters are not abstracted. As . a consequence 'it is difficult to construe Some of , appellant's contentions. For. example . , important paragraphS in letters exchangea tween Beloate and Robert C. Powell (Mrs. Kory's at-' torney) are not brought into the record by appellant, although at the time the • 1929 agreenient was reached Mrs. Kory's claimed balance was . $15,916.77. • It is shown that the parties had formerly conferred, for on March 4 Beloate wrote Powell: "I would like to have a letter from you explaining the agreenient entered into between Mrs. Kory and mYself on the 24th,. with reference to the amount due 'her under our contract, cost of the Less v. Kory litigation, past and future, and other financial arrangements made on that day." The record as abstracted by appellee discloses letters from Beloate questioning specific items, and nowheie does he mention the controverted Commonwealth Farm Load Company and Gussie Less payments. The contingently payable indebtedness Beloate now claims under the terms of his oral agreement of 1918 was raised for the first time in the chancery proceedings from which this appeal comes.
ARK.] •BELOATE V. LESS. 915 • The circumstances under which oral modification of the' written contract was : effectuated are explained by .Beloate, who says that with termination of litigation in 'the -LeSs-Kory proceedings, he went- to St. Louis on Feb-'inary 24, 1929, and met Mr. and Mrs. Kory and Mr. Pow-ell in the' latter's office ; that after brief conversations Powell . 'took a. statement from his letter files, prepared from data supplied . by Mrs. Kory, and handed copies to him (Beloate) and to Mrs. Kory. • "At the same time," continued Beloate, "Poivell opened the door to his library, and said he :supposed Mrs. Kory and I would want 'a private : conversation about the . matter. I went into the library with Mrs. Kory. and read:the statement * * * and said::: 'Mrs. Kory,. you .know this is not 'correct." * * * I- had. filed an, account showing that :expenses exceeded income -by $8,798.49...:When I .told ler I had no intention of trying to 'hold:her .for !this, she. said she didn't know whether her. account 'was tright or not, and • if satisfactory„ with me, we would just wipe the account out which• included certain items,: but did not include anything I had paid . Mrs: Less;.nor the Less boys for the Commonwealth Farm.Loan debt, that by. agreement was to be: :kept. separate. from. my statement: She then told:me that • she had never explained . the Matter: to Mr. Kory; and didn't -want him:to .know anything about, these matters,' and!said that what :he didn't know . wouldn't hurt anything, and she wonld :rather not have it explained. She asked me to go : back into Powell's office and just make a .statement: that we had wiped . out these matters, one against the sother... When we got back in,. I did so, and told them :that :it :was ,the . understandingTthat the amount in'the.receiver's hands was to:be used te pay the judgment in favor of Gussie Less, for .the.balancedue on .h . er; life estate,: and 'the expense of litigation." • •• It will be ObServed- that Beleate - fixes February 24 as the date "of this . Conference: The mernorandUm is dated March 24. While Mis. : Kory -was 'net • reealled deny Beloate's testimony that a collateral:oral agree.:: ment was made . in the privacy , of PowelPs -library, she had previously testified:that on November 17, 1929, she
916 BELOATE V. LESS. [193 received a statement from Beloate (filed as an exhibit) designated as "Memo of amount due Mrs. Ida L. Kory from W. E. Beloate." With respect to this statement, Mrs. Kory testified: "I do not know the exact amount I received from Mr. Beloate from 1917 to 1928, at which time he owed me over $13,000. I agreed with him that if he would live up to the contract and pay all taxes and keep property in good order, I would waive the delinquencies from 1917 to 1929 and start all over again. He submitted me a statement showing that he owed me $13,- 166.77. I believe he owes me more than this, but I let it go at that. I also have his note for over $4,700, which is dated 1924 and includes interest." Exhibit "E" was attached to Mrs. Kory's deposition. It is entitled: "Memo. of settlement for year 1929 between Mr. Beloate and Mrs. Kory, dated at St. Louis Sunday, November 17, 1929." In this writing Beloate extended a credit of $3,000 for 1929 rent, against which he charged $1,000. "already paid." He then credited three items—$89, $385, and $75. There is enother credit ($1,000) "due Mrs: Kory from chancery clerk retained in receivership case to cover East Arkansas Lumber Company garnishment and which will go to Mr. Beloate and with • which he intends to pay East Arkansas Lumber Company." Still another item is "for briefs advanced to Mr. Beloate, receivership appeal, $250." The credits thus' given amount to $3,799. Beloate then takes personal credit for $500 as attorney's fee due or paid to a third party; $1,483.69 as reflected by "Less boys" judgment against Mrs. Kory, and interest of $74.18, or $1,557.87 fo'r the two items, "which Mr. Beloate agrees to pay." All told, these credits are $2,057:87, leaving a balance of $1,741.87 in fevor of . Mrs. Kory, which is handled in the following manner : "Notes of Mr. Beloate already given and now •in Mrs. Kory's hands, two of $375 each, $750; notes to be given, $550; check given today, $441.13—total, $1,741.13." Mrs. Kory . testified that she did not receive the $1,000 reserved by Beloate for payment to East Arkan-sas Lumber Company; also, that the lumber company
ARK.] BELOATE V. LESS. 917 controversy was settled in her favor, and thereafter the indebtedness was non-existent. She says that after No-vember, 1929, she did not receive any other statement, although .Mr. Kory constantly demanded such. The deposition dated November 22, 1935, closed with this statement : "He owes me up to date over $17,000, according to my contract." Beloate admitted sending the November statement, but said that at the time he wrote it he had paid Mrs. Kory more money than he had collected as rent. "From 1930 to September, 1935, inclusive, I collected $14,397.44 off the farm and town property. I paid the following : Taxes, $2,596.05 ; to Mrs. Kory, $3,595 ; and for repairs and court costs, $3,177.02. I credited on the amounts collected by the Less heirs from me on the Gussie Less and Commonwealth Farm Loan Company, $8,359.52. Mrs. Kory received from W. E. Beloate and the Carty judgment $5,352:65 ' and the notes amounting to $2,131.72. Amount received by Mrs. Kory, $5,553.65." The chancellor 's finding was that the notes and interest to date of judgment amounted to $2,987.67 and that Mrs. Kory was entitled to a further sum of $2,215.47 as the balance equitably due on rents. The method of calculation by which this result was arrived at is not clearly shown, but there is an inference that Beloate's admission that he had collected $14,397.44 was accepted as the best evidence. Against this the chancellor credited Beloate with the items of $2,596.05, $3,177.02, and $3,595 a total of $9,368.07. Interest on the five notes to date of judgment (July 6, 1936) would amount to $963.66. Judgment on the notes therefore should have been for $3,095.38, instead of $2,987.67, a difference of $107.71. Deducting $9,368.07 from $14,- 397.44 leaves $5,029.37, and Mrs. Kory's judgments, without interest, amount to $5,203.14. It will thus be seen that if, in fact, the chancellor's results were arrived at by this process, Mrs. Kory received less than she was entitled to. Beloate mentions an item of $858.14 representing one-ninth of unpaid taxes, for which he claims
918 [193 Mrs. Kory was liable, but this figure, if 'allowed as a credit to him, &es not balance with total receipts.. • Although Mrs. • Kory is a cross-Complainant, she has failed to point out- the particular • inaceuracies of the chancellor's findings, and. will be precluded' from objecting to • the result. The appellant Beloate cannot complain, as to these items, because the amount adjudged , against him is less than the analysis shows. . • •:1 -A Less, v..Kory, referred to supra, § 10054, Craw-ford . & Moses' . Digest,. was cited. ,. The law provides that if a . life tenant neglects to-pay . .taxes and the lands are sold,. such tenant 'forfeits ' the .estate. was• held, however. , , that where the . tax . sale, wider ,which a remainder-man claims a • forfeiture of-a life . estate, is yoid, the chancellor may properly refuse to declare a forfeiture. , The „appellant,. Beloate, .in -his answer and_ cross.- complaint, ,alleged that all of the. sales were • void.. The prod offered was not ,sufficient for this court , to pass upon validity . or invalidity of the sales. • A finding, by the, chancellor that the life estate should not be forfeited at least' raises . a presumption here that he . regarded the : sales as void or voidable. • • The alleged verbal agreements between Beloate and Mrs. Kory involving an indefinite obligation with re-. spect to payment of the Commonwealth Farm Loan and Gussie Less debt are vague and, uncertain. Conduct of .the parties does. not justify a : belief that it 'was intended to•become Rffectiye in the.manner here urged. The , chan-,cellor was not. in error in refusing to .enforce it. . Affirmed. • •
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