BEFORE WALKER, P.J., PRATHER AND ROBERTSON, JJ.
WALKER, PRESIDING JUSTICE, FOR THE COURT:
This is an appeal from the Chancery Court of Winston County, wherein the chancellor upheld a warranty deed executed by Monroe Allen Patterson and Rebecca J. Patterson (appellants) in favor of Merchants Truck Line, Inc. (appellees). The chancellor also found that the Pattersons were indebted to Merchants Truck Line in the amount of $8,677.12. Judgment was entered accordingly.
From 1966 until 1980 Allen Patterson managed the Merchants Truck Line, Inc. (hereinafter MTL) terminal in Louisville, Mississippi. As manager he was responsible for collecting the freight fees from MTL's Louisville customers.
Some customers paid in advance while credit was extended to others. Mr. Patterson had authority to extend credit to those customers he thought creditworthy and was responsible for collecting the bills. When a bill was paid, Mr. Patterson would mark the bill "Paid" and send it to MTL's New Albany office. He would also send a copy of the deposit slip showing where the check had been deposited, along with a daily cash report containing an itemization of those bills paid by cash.
Over the years MTL audited the Louisville terminal several times but never discovered anything other than minor discrepancies. On November 10, 1980 MTL conducted an audit of the Louisville terminal and discovered a shortage of approximately $10,000.00. The shortage was in bills which had been paid but which Mr. Patterson was listing as unpaid.
On November 13, 1980 Jimmy Roberson, secretary-treasurer of MTL and the one responsible for day-to-day operations of the company, contacted Mr. Patterson about the shortage and stated that the company was holding him responsible. Patterson responded that he would take care of the shortage.
The next day Patterson told his wife of the shortages. He stated that he did not know where the money had gone but had been aware of the shortages for some time and had been covering them up. Rebecca Patterson then phoned Jimmy Roberson and arranged to meet him in Pontotoc. Before she left, Mr. Patterson gave her a stack of bills, stating that they also had been paid but not reported as paid.
Mrs. Patterson took the additional bills to Pontotoc and gave them to Jimmy Roberson. At this meeting Roberson explained to Mrs. Patterson what the auditors found, and stated that the company was holding Mr. Patterson responsible. It was at this meeting that the parties first discussed the possibility of executing a deed to the Pattersons' property as a means of covering the shortage. The meeting concluded and Mrs. Patterson returned to Louisville. That same afternoon Roberson phoned and told her that the bills she gave him totalled $79,000.00.
Thereafter, the Pattersons decided to surrender their Louisville property to cover the shortage. A deed was prepared covering four pieces of property that the Pattersons owned. At the request of Mrs. Patterson, the deed was redrawn to exclude the house her daughter was living in. On December 16, 1980 Mr. and Mrs Patterson signed the deed in their home.
Mr. and Mrs. Patterson have remained in their home since executing the deed, and MTL has charged them no rent.
On April 1, 1981 the Pattersons filed in the Chancery Court of Winston County a bill of complaint to set aside the warranty deed alleging, inter alia, fraud, duress, undue influence, and lack of consideration. MTL filed an answer denying the charges of the complaint and a cross-bill seeking to recover from Mr. Patterson the difference in the amount of the shortage and the value of the property in the deed.
A hearing was held on January 27, 1982 and Jimmy Roberson was called as an adverse witness by the complainants. He testified that MTL had no evidence that Mr. Patterson stole the money, but the company was holding Patterson responsible since he was the terminal manager. Roberson further testified that during the November 14 meeting Mrs. Patterson suggested conveying their Louisville property to MTL to cover the shortages.
Mrs. Patterson was also called as a witness. She testified as follows: When her husband told her about the shortages he was very upset. He was afraid that he would be arrested and would go to jail. For several weeks he remained at home, refusing to leave. She didn't want to sign the deed but did so because she was afraid her husband might commit suicide. The idea of using their property to cover the shortages was Mr. Roberson's.
Mrs. Linda Simard, a neighbor and close friend of the Pattersons, testified that after all of this came up Mr. Patterson became ...