Thanks for visiting! Welcome to a new way to research case law. You are viewing a free summary from Descrybe.ai. For citation checking, legal issue analysis, and other advanced tools, explore our Legal Research Toolkit — not free, but close.
S. & M. Oil Co. v. Mosley
Citations: 227 Ark. 250; 297 S.W.2d 926; 1957 Ark. LEXIS 302Docket: 5-1123
Court: Supreme Court of Arkansas; January 28, 1957; Arkansas; State Supreme Court
Jack Mosley initiated a lawsuit against S. M. Oil Company, seeking to have the company declared a constructive trustee of a filling station property in Eudora and to compel the execution and delivery of a deed back to him. The Chancery Court granted this request, leading to the appeal. The case's background reveals that Mosley and W. R. Smith formed S. M. Oil Company in 1951, with each contributing $10,000 for corporate stock; however, the Smiths only paid between $800 and $1,800, resulting in financial troubles for the company. In March 1952, after the company faced difficulties and Mosley assumed its liabilities, S. M. Oil Company conveyed the filling station property to Mosley. The company had incurred a loan of approximately $12,800 for the filling station's construction and was in the process of securing a $15,000 loan from a New Orleans bank, which was to be secured by a first mortgage on the filling station. When the New Orleans bank was ready to finalize the loan in May 1952, the title had already been transferred to Mosley. To facilitate the loan, Mosley and his attorney requested that W. R. Smith agree to transfer the title back to S. M. Oil Company, which Smith consented to. After the property was deeded back, the New Orleans bank loan was secured, but Smith then refused to reconvey the property to Mosley. Consequently, Mosley sought legal remedy to have the S. M. Oil Company declared a constructive trustee and to recover the property, which the Chancery Court granted, forming the basis for the appeal. Numerous cases involving constructive trusts have been reviewed, highlighting significant rulings. Key rules identified are: (a) a constructive trust in real estate can be established through parol evidence, which must be clear, cogent, and convincing; and (b) absent a familial or confidential relationship, evidence must demonstrate that the original promise to reconvey was made with fraudulent intent. A mere failure to reconvey is insufficient to prove such intent. In this case, the Chancery Court's decree is affirmed based on evidence presented by the appellee, demonstrating that Smith had agreed to reconvey property to Mosley after a mortgage with the New Orleans bank was finalized. Smith acknowledged this agreement, yet later claimed that Mosley was to execute another deed back to the S. M. Oil Company, asserting a shared equity interest post-mortgage. The court found Smith's position unsubstantiated, particularly given the disparity in financial contributions to the company, casting doubt on his claim of an ultimate reconveyance. Smith did not disclose the ultimate reconveyance in prior conversations, supporting the conclusion that he intended the immediate reconveyance to Mosley without further conditions. The Chancery Court determined that Smith failed to provide adequate proof for his claims, leading to the affirmation of the decree. Mosley’s wife, while a party to the case, only claimed dower rights, allowing for the reference to Mosley as the primary appellee. Additionally, express trusts concerning land must be evidenced by a written instrument, per the relevant statute.