Johnson v. Cherr

726 S.W.2d 4 (1987)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

In 1974, Johnson (P) purchased 348 acres of land for $125,000 with his grantor reserving a vendor's lien on the property. P moved onto the property and made improvements. P and his wife divorced in 1981 and P purchased her community interest but began to experience financial difficulties. P fell behind all of his payments and the grantor posted the land for foreclosure. At all times, P claimed 200 acres of the 348 as his homestead. Because of the homestead status, P was unable to obtain loans. P then meet Cherry (D) and obtained a loan from D. Documents were executed by P and D; a general warranty deed from P and D covering all 348 acres; a two-year lease agreement; and an option for P to repurchase the land. P got $120,000 from D and D assumed the $38,000 note P's wife held. The lease provided for semiannual payments of $12,510 each. P could exercise his option for $132,000 and reassumption of the note to his ex-wife. The option was open for six months following the conclusion of the leasehold and was conditioned upon P making two lease payments. P failed to make the second lease payment. D initiated eviction and P sued D claiming that the transaction was simply a loan in disguise. D claimed that it was a sale. P got judgment, and the deed was canceled. The court of appeals reversed; there was no debt owned by P on the executed documents nor was P under any obligation or debt to repurchase the property.