Calloway v. State Ex Rel. Mothersead

1926 OK 36, 246 P. 873, 117 Okla. 43, 1926 Okla. LEXIS 716

• Court: Supreme Court of Oklahoma
• Decided: January 19, 1926
• Docket: 15615
• Status: Published

Opinion

Opinion by

JONES, C.

This appeal involves two suits and the judgments rendered therein by the district court of Okmulgee county. In case No. 11312 in the trial court, the state of Oklahoma ex rel. Joe H. Strain, as Bank Commissioner, was plaintiff, who appears here as one of the defendants in error, and Bose Calloway et al., appellants, were defendants, and in case No. 11465, Bose Calloway, appellant here, et al. were plaintiffs, and J. Ray Brown, R. A. Hocken-smith, C. T. Huddleston, and W. G. Reynolds, appellees here, were the defendants. The two causes were consolidated, and on the trial of same to the court without the intervention of a jury, judgment was rendered in favor of the plaintiff, state of Oklahoma, in cause No. 11312, and in favor of the defendants J. Ray Brown et al. and against the plaintiff Bose Calloway in case No. 11465.

This appeal, however, only involves the merits of suit No. 11465, Calloway v. Brown et al. The first case, No. 11312, involves the foreclosure of a mortgage given by Bose Calloway to the Bank of Commerce of Ok-mulgee, Okla. ■ The bank was closed and taken over by the Bank Commissioner prior to tbe institution of tbis suit; and in case No. 11465, tbe validity of a second mortgage given to W. G-. Reynolds of Ok-mulgee is involved; both of said mortgages covering an undivided one-balf interest in 160 acres of land in Okmulgee county. Said mortgages are alleged to bave grown out of a transaction between tbe said Bose Callo-way and tbe said mortgagees, wherein R. A. Hockensmitb and O. T. Huddleston, a firm of lawyers, represented tbe said Bose Calloway as attorneys, and it is alleged by tbe appellant, Calloway, tbat be was induced to enter into said mortgage contract by reason of certain false representations made to bim by bis attorneys, Hockenspiitb and Huddleston.

Tbe plaintiff, Calloway, alleges for bis first cause of action tbat be was tbe owner of, aSnd in tbe possession of the real estate, consisting of 160 acres of land, and that on January 3, 1920, be entered into a contract with tbe defendant Hockensmitb, whereby he employed said Hockensmitb as bis attorney in a certain action then pending in the district court of Okmulgee county. The contract, in substance, provides that tbe said Bose Calloway is the owner of 160 acres of land, which is subject to a mortgage to Joe Whittendon in a sum not to exceed $2,500, and that in consideration of certain services to be rendered by tbe said Hockensmitb, and other considerations, which will hereafter appear, the said Callo-way, by warranty deed, conveyed to tbe said Hockensmitb tbe 160 acres of land, and tbe said Hockensmitb agreed to represent the said Calloway in the foreclosure suit above mentioned, and agreed tbat be would pay off said mortgage indebtedness, and tbat when the title to said land was cleared up, he would execute a quitclaim deed to tbe said Calloway for an undivided one-half interest in the land, and the said Calloway agreed to pay to Hockensmith a sum equal to one-half of the total cost and expense of getting the title cleared lip by giving bis note secured by mortgage. The contract further provides tbat in case tbe indebtedness mentioned should be more than stated, or other legal indebtedness should be found against tbe land, said Hockensmitb would immediately quitclaim back to the said Calloway.

The plaintiff Calloway’s second cause of action is based cn a transaction bad on June 7, 1920, wherein tbe said Hockensmith negotiated a sale, whereby Calloway sold to J. Ray Brown an oil and gas lease conveying an undivided one-fourth interest in tbe oil and gas rights in said land for a consideration of $1,000, and on June 30, 1920,. the said Brown conveyed to tbe defendants Huddleston and Hockensmitb an undivided one-sixth interest in said oil and gas lease, and thereafter, on December 10, 1921, tbe said Brown conveyed to C. C. Walker a one-twelfth interest in said oil and gas, and on tbe 15th day of December, 1921, Walker conveyed to Huddleston and Hoeken-smitb said one-twelfth interest; and tbe plaintiff, Calloway, alleges tbat tbe said Brown in taking said conveyance was acting as tbe agent of Hockensmitb and Huddles-ton, and that in fact the said Hockensmith and Huddleston were acquiring said oil and gas rights for themselves, and tbe plaintiff alleges tbat be was induced by said attorneys to sell an undivided one-balf interest in the coal rights underlying said land for a consideration of $1,300; tbat said coal rights were worth tbe sum of $3,750, and that said Huddleston and Hockensmitb bad arranged to sell said coal rights at said price, and did thereafter sell samé for tbe sum of $3,200. Tbe plaintiff further! alleges that he never received the consideration of $1,300 agreed to be paid, and tbat be was induced to enter into said transaction by reason of bis confidence and faith in tbe said Hockensmitb as his attorney.

Plaintiff for bis tbij'd cause of action alleges that he was induced by tbe defendant Hockensmitb to execute to one W. G. Reynolds, a conveyance of an undivided one-twelfth interest in tbe oil and gas rights in and to bis lands, and at tbe same time was also induced to execute a note and mortgage for the sum of $650; that said oil and gas lease was given as a bonus for said loan, and was of tbe value of $650, and tbat said loan drew interest at the rate of 8 per cent, per annum; that by reason of such transaction said loan is usurious and illegal; and tbat plaintiff is entitled to a cancellation of said conveyance, and is entitled to an offset against tbe principal indebtedness of $650, and to have said indebtedness canceled.

To the petition of plaintiff, tbe defendant answered and admits tbe execution and delivery of the original contract heretofore referred to, and further answering alleges tbat upon investigatiort be learned tbat there was a; valid indebtedness against tbe land to tbe amount of $3,849.72, and tbat tbe said Whittendon, the owner of said mortgage, also claimed to be tbe owner of said land by reason of certain deeds of conveyance executed by persons claiming to be tbe owners thereof: tbat be also held a note secured by chattel mortgage against tbe said Calloway for $1,295.62, and that there were back taxes against the land lor the sum of $73.60, and that the said Whittendon refused to make any setttlement as to the mortgage, and refused to quitclaim the land back to the said Bose Calloway until all indebtedness claimed was satisfied, whereupon the defendant Hockensmith so informed the plaintiff, Calloway, and 'offered to quitclaim the land back, and asked to be relieved from the terms of the contract, and released from further representing the said Calloway, which the said Calloway refused to do, and insisted that he, Hockensmith, proceed to a final settlement of all the matters involved, and that the' plaintiff, Calloway, would take care of the excess indebtedness, whereupon the said Hockensmith proceeded to make a final settlement, and paid to the said Whi'.'.tendffn the sum of $2,127.35, and executed a deed conveying to the said Callo-way a one-thalf interest in said land, whereupon the said Calloway executed the note and mortgage ¡securing same to J. Ray Brown for the aggregate sum of $3,422.62, the principal portion of which was used in the liquidation of the indebtedness due the said Whittendon.

The appellant first contends that in this case the judgment of the trial court should be reversed, because of the failure of the trial court to make special findings of fact and conclusions of law. The record discloses that no request was made until after the court had announced its judgment, at which time the plaintiff, Calloway, made a request for separate findings of fact and conclusions of law. The court thereupon made certain findings of fact and conclusions of law over the' objections of the defendants Hockensmith and Huddleston, for the reason that no timely request had been made, but failed to make certain findings that the defendant thought material. The court, however, announced that if counsel would prepare such findings as he deemed proper, that the court would either deny or approve same; but the character of the findings made or refused, we think, is not material, because under the law of this jurisdiction the request made was noc timely, as required by section 5X07, Rev. Laws 1910; section 556, C. S. 1921.

This court has held in the case of Etchen v. Texas Co., 82 Okla. 62, 199 Pac. 212, that:

“Where a request for separate findings of fact and conclusions of law is not made until after the court has announced what the judgment will be, it is not reversible error to refuse such request.”

Following the rule announced in the case of Beck v. Finley et al., 77 Okla. 213, 187 Pac. 488, and Smith v. Smith, 80 Okla. 136, 184 Pac. 82.

The second and principal contention made by appellant is that the contracts involved in this suit are1 illegal and void, iicr the reason that they were made on the part of the said Calloway under the influence, inducement, and representations of the said Hock-ensmith, and at a time when the relationship of attorney and client existed between the said Oalloway and Hockensmith. The record discloses that the plaintiff, Calloway, testified to a state of facts supporting his pleadings, and the defendant Hockensmith’s testimony was in accord with his contention as se‘t forth in his answer, and same was corroborated to some extent by other witnesses. The appellant, Calloway, in • his brief filed in this court, concedes that at the time the original contract between Calloway and Hockensmith was entered into, that no fiduciary relations existed and that same was a valid contract, but contends that the terms of the agreement were not carried out, and that same was entered into under a mutual mistake of iact, and was rescinded; and that the transaction had was under a new and verbal contract entered into between the said Calloway and Hockensmith, and contend that the verbal, or subsequent, agreement entered1 into is unfair to the appellant, Calloway, because under the terms of the original or written contract, Callo-way was to become the owner of a one-half interest of the land involved, subject to an indebtedness of $1,250, whereas under the new agreement his interest was subject to an indebtedness of $3,422.97; but we see no merit in this contention. The facts as they actually exist were that the indebtedness, ■which Calloway was required to satisfy be-i fore he could acquire a title to a one-half interest in said land, was more than auable that which he represented same to be under the terms of the written agreement; in fact, the written agreement has no bearing upon this controversy at this time, and is cited substantially in the opinion merely as showing the original basis or transaction out of which this controversy grew, and under all of the facts disclosed by this record, we fail to find evidence sufficient to establish any fraudulent or inequitable conduct practiced on the part of Hockensmith and Huddleston in dealing with the said Calloway.

In so far as all of the matters which were involved under the original contract, and which wore adjusted by reason of the subsequent verbal agreement, are concerned, the record discloses that same was finally consummated and closed on the 3rd day oí' May, four months from the date of the execution of the original agreement, and the other proceedings complained of all transpired subsequent to this date, wherein is involved the sale of certain coal interest and oil and gas rights, whereby the defendants Hockensmith and Huddleston seem to have made a profit by reason of their connection with said various transactions; but we fail to find in the record any evidence to establish the contention of- appellant that the relationship of attorney and client existed, at that time, and while considerable evidence is offered and a lengthy argument made by appellant in his brief, going to the value of the mineral interest in said, land, it is clear that it was of a very speculative nature, and whether or not the lands involved have any real and substantial coal or oil and gas values is yet a matter of speculation, and the record discloses that the appellant, Calloway, received $2,300 in cash for certain mineral interest in his one-half interest in the 160 acres of land, and we are inclined to believe that he was very fortunate to have received so large a sum, regardless of the fact that Hocken-smith and his associates conveyed the iin terest and made a reasonably fair profit, and it is very evident that same was made at the expense of the purchasers of said interest, and we do not regard such transaction as necessarily constituting fraud or improper conduct, even though the relationship of attorney and client should have existed.

The third and last contention of appellant is that the transaction wherein the appellant Calloway executed and delivered his note secured by mortgage- to the appellee, W. G-Reynolds, is usurious for the reason that he also executed and delivered to the said Reynolds an undivided one-twelfth interest in the oil and gas royalties in the lands in controversy, and he contends that this was a bonus in order to secure the loan from the said Reynolds over and above the interest of 8 per cent, per annum, asi specified in the note. If, in fact, this contention be true, we think it would constitute usury, but the appellee, I-Icckensmith, explains the transaction by testifying that at about the time this transaction was had, the appellant, Calloway, called upon him to assist him in securing a loan of $650, and from the record it appears that Calloway had frequently secured small loans from and through the appellee, Hockensmith, and on this occasion, according- to the testimony of Hockensmith, Calloway offered to give to the said I-Ioeken-Smith a deed of conveyance to a one-twelfth interest in oil and gas royalty of said land. Hockensmith made numerous efforts to secure the loan, and finally approached t-he ap-pellee, Reynolds, concerning same, and explained to Reynolds that the said Calloway had agreed to give him, Hockensmith, a lease or deed conveying a one-twelfth interest in the royalties, and Hockensmith said to Reynolds that he would give Reynolds this royalty- interest, if he, Reynolds, would make Calloway this loan, whereupon the loan was made, and at the request of Hock-ensmith, the deed conveying the one-twelfth interest in the .royalty was made direct from Calloway to Reynolds. The testimony of the appellee, Reynolds, on this point, corroborates Hockensmith, and he also testified that he would have made the loan without the deed conveying the mineral interest. And upon this state of the record the court found in favor of the appellee, Reynolds, and while the judgment in favor of Reynolds in the trial court was general, no special findings of fact being made by the ccurt on this point, it necessarily follows that the court found that there was evidence sufficient to sustain the allegations of the defendant, Reynolds, and we find that there is ample evidence to sustain the judgment of the court, and under the general rule in this jurisdiction, to the effect that where in equitable proceedings the judgment of the trial court is not against the clear weight of the evidence, the same will not be disturbed on appeal, and we therefore find that the judgment of the trial court should be and is in all things affirmed.

By the Ccurt: It is so ordered.

Note.—See under (1) 4 C. J. p. 1059 §3044 (Anno); 38 Cyc. p. 1959; 26 R. C. L. p. 1088; 5 R. C. L. Supp. p. 1439. (2) 6 C. J. p. 672 §184; p. 961; 4 R. C. L. Supp. p. 129. (31 6 C. J. p. 636 §138; p. 637 §140. (4) 39 Cyc. 978 (Anno); anno. 19 L. R. A. (N. S.) 391; 46 L. R. A. (N. S.) 1157; 21 A. L. R. 823; 27 R. C. L. p. 237; 4 R. C. L. Supp. 1749.