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REED WALTERS, a/k/a J. R. WALTERS v. XEMA PATTERSON and BANK OF MISSISSIPPI

AUGUST 31, 1988

REED WALTERS, a/k/a J. R. WALTERS
v.
XEMA PATTERSON and BANK OF MISSISSIPPI



BEFORE HAWKINS, P.J., GRIFFIN and ZUCCARO, JJ.

GRIFFIN, JUSTICE, FOR THE COURT:

Reed Walters appeals the dismissal with prejudice of his petition in Chancery Court of Monroe County. Walters prayed for reformation of a deed to property known as the "Brown Place" and for the recognition of a constructive trust over property known as the "Town Property" . At the close of appellant's case, both defendants moved for dismissal. The Chancellor found that the Statute of Frauds, Miss. Code Ann. 15-3-1 (1972) was applicable; and that Walters fell short of the standard of proof required to establish his position. The Chancellor also found that the Bank of Mississippi, holder of a deed of trust on the "Brown Property" , was an innocent encumbrancer for value and directed a verdict in its favor. I.

The "Brown Place" and the "Town Property" were transferred by warranty deed on March 25, 1966 and September 28, 1967, respectively. Grantees were Xema Walters Patterson, sister of Reed Walters, and Sadie Bruce Walters, mother of Reed Walters, since deceased.

 The "Brown Place"

 This property consisted of approximately eighty-five (85) acres of pasture and undeveloped land adjacent to the City of Aberdeen. Reed Walters had purchased this land in 1964 for $7,500. In 1966, Walters was faced with imminent foreclosure of a deed of trust to Monroe Banking & Trust Co. (predecessor in title to Bank of Mississippi; appellee here, defendant below). Mrs. Walters and Mrs. Patterson provided the $8,000 needed to pay Walters' debt to the bank. Each contributed $4,000. Reed Walters conveyed the land to them by warranty deed.

 Both Reed Walters and Mrs. Patterson testified that Walters was orally given a right to redeem the land. According to Mrs. Patterson, the right was limited to one year. Walters testified that the right to redeem was for an

 indefinite time period - possibly extending to fifty years. There was no written memorandum of this agreement. In 1976, Mrs. Sadie Walters died. She devised the "Brown Place" to Mrs. Xema Patterson.

 After the 1966 conveyance, Reed Walters performed the following acts of possession on the "Brown Property" : (1) At some point after 1966, Bob Patterson, Xema's husband, placed a hog pen on the property. Walters contacted his mother who had the hogs removed within a week. (2) On July 22, 1968, Walters offered to the City of Aberdeen a 15 acre drained lake for garbage disposal. Mr. Patterson, who was a city alderman, did not dispute Mr. Walters' right to offer the land. (3) In 1969, Walters parked construction equipment and placed an 8 x 10 steel metal office building on the property. (4) In 1969 Walters cleared land and planted 29 acres of watermelons. (5) Walters cut "bodock" posts from the land from 1964 to 1983. (6) In 1983, Walters submitted a bill to Mrs. Patterson for backhoe work on the "Brown Place" . She assigned a right to payment of $1,779 from the United States Department of Agriculture to Walters. Mrs. Patterson testified that all of these acts were with her permission.

 On July 2, 1982, Mrs. Patterson executed a deed of trust for the "Brown Place" to Bank of Mississippi. Another deed of trust was executed on July 1, 1983. A third deed of trust was recorded in 1984 and was outstanding at the time of trial.

 In 1983, Mrs. Patterson had Reed Walters prosecuted for trespass on the "Brown Place" . In that same year, Mrs. Patterson executed an option to purchase fifteen (15) acres of this property to Mr. Denton Roberts.

 The "Town Property"

 This property consists of eight tracts of undeveloped, rental, and homestead property in the City of Aberdeen. Walters deeded this property to Mrs. Walters and Mrs. Patterson without consideration in order to avoid anticipated federal tax liens. No liens were recorded at the time of the conveyance. The grantee, Mrs. Patterson, accepted the deed and agreed to hold it ". . . to save the Internal Revenue from taking it away from him."

 Reed Walters made no restrictions or conditions upon Mrs. Patterson when the property was conveyed. Mrs. Patterson collected rent, paid taxes, paid notes as they became due, and repaired all or part of this property until 1980. The majority of this property was deeded by Mrs. Patterson to

 Walters' four children in 1976. Mrs. Walters devised her interest in this property to Reed Walters. Reed Walters' petition asserted that this property was transferred in order to ...


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