McGinnis v. Less , 147 Ark. 211 ( 1921 )

McCulloch, C. J.

Appellant, Ellen McGinnis, is the widow of T. J. McGinnis, who departed this life intestate in the year 1898, and the other appellants are grandchildren and heirs at law of said T. J. McGinnis. On April 16, 1898, Isaac Less sold and conveyed to T. J. McGinnis a tract of land containing 160 acres in Lawrence County, for the price of $2,500, evidenced by ten promissory notes due and payable annually for ten years after that date, with interest at the rate of ten per cent, per annum. The deed contained the following clause:

“To have and to hold the same unto the said T. J. McGinnis and unto his heirs and assigns forever against all lawful claims of all persons, and the grantor herein reserves to herself a lien upon said land for the prompt payment of said notes, and she reserves a further lien to herself upon all crops that may be raised upon said lands for the further security of said notes, for the payment of any note that may become due during the year that said crop may be raised, and it is further' understood that if said grantee does not pay the principal during the crop season when same becomes due, the amount so paid shall be considered as rent upon said described premises and the remaining notes to become due and the vendor’s lien herein retained shall be enforced by said grantor at her option, as well as the enforcement of her lien upon the said crop; the lien herein reserved upon said crop and land herein shall follow the title to any note that may be assigned, and the crop lien shall go to the assignee of the note, and the year that said note may become due and crop raised.”

Isaac Less died on January 29, 1916, and appellants instituted this action in the chancery court of Lawrence County against appellees, who are the heirs at law of Isaac Less, alleging that T. J. McGinnis took possession of the lands purchased aforesaid and occupied the same as his homestead up to the time of his death; that after the death of T. J. McGinnis the said Isaac Less took possession of said lands under the aforesaid clause of the deed and collected the rents up to the time of his death, and that his said heirs (appellees) have collected said rents since that time. The prayer of the complaint is for an accounting of the rents and profits of the land, and that the notes given by McGinnis to Isaac Less for the purchase price of said land be canceled. Appellees filed a demurrer on the ground that the complaint failed to state facts sufficient to constitute a cause of action; that the complaint shows on its face that appellants are barred by their own laches and that they are barred by the statute of limitations. The court sustained the demurrer, and, appellants declining to plead further, the complaint was dismissed.

The action is one treating the appellees and their ancestor as mortgagees in possession, and asking for an accounting. Appellees are in error in assuming that this is an action to compel specific performance of an executory contract. The writing set forth in the complaint as the basis of the title of appellants is a deed of conveyance, and not an executory contract to sell and convey. The title passed to T. J. McGinnis and descended to his heirs at law, subject to the widow’s homestead and dower rights. When the grantor took possession for the purpose of collecting rents in accordance with the stipulation in the deed, he was in the attitude of a mortgagee or lienor in possession. Though Isaac Less as a lienor was not a mortgagee in a strict legal sense, his attitude clothed him with all the rights. and obligations of a mortgagee in possession. He and his successors were subject to an accounting to the holders of the legal title, and a court of equity was the proper forum to afford that remedy. Such an occupancy is deemed to be in subordination to the rights of the mortgagor or the holder of the legal title where, as in this case, there has been a deed of conveyance. And in order to put the statute of limitations in motion against such owners there must be notice of .the change in the relationship and the hostility of the occupancy by the mortgagees who are in possession. Either this or acts of such notorious hostility as to put the owners on notice. Nor does the mere lapse of time justify the application of the doctrine of laches in denial of the rights of the owners to call for an accounting and to recover possession. There must be some other intervening equity to call for the application of this doctrine. Now there is nothing on the face of the complaint to show that there was an adverse occupancy of the land by the appellees or their ancestor for more than the statutory period. Nor does the complaint show on its face sufficient facts to call for the application of the doctrine of laches. Either laches or the statute of limitations may be raised by demurrer in a suit in chancery where the allegations of the complaint are sufficient to show the existence of those defenses. In such an action these defenses go to tne equity of the complaint and may therefore be raised by demurrer. .

We are of the opinion, however, as before -stated, that the facts stated in the complaint do not show that appellants are barred by laches or by the statute of limitations and that, if either of those defenses exist, they must be pleaded in the answer by the allegation of facts which call them into operation. The decree is therefore, reversed and the cause remanded with directions to overrule the demurrer.