Dodd v. Mills, 4-9493

• Decision Date: 04 June 1951
• Docket Number: No. 4-9493,4-9493
• Citation: 240 S.W.2d 25,219 Ark. 91
• Parties: DODD v. MILLS et al.
• Court: Arkansas Supreme Court

Page 25

240 S.W.2d 25

219 Ark. 91

DODD v. MILLS et al.

No. 4-9493.

Supreme Court of Arkansas.

June 4, 1951.

H. A. Tucker and Wood & Chesnutt, all of Hot Springs, for appellant.

B. W. Thomas and Hebert & Dobbs, all of Hot Springs, for appellees.

GRIFFIN SMITH, Chief Justice.

The appeal is from dismissal of plaintiff's suit to recover $5,500 she paid on the purchase price of property on Lake Hamilton. The contract stipulated that with payment of the balance of $28,970 a warranty deed showing good title, or policies of title insurance, would be furnished. After occupying the premises for several months Mrs. Dodd ascertained that restrictions running with the land limited its use to residential purposes, hence an unimpaired title could not be given. The Chancellor found that laches barred recovery.

Because credibility of witnesses is involved in the plea that the seller informed the buyer regarding the restrictions now complained of, it is necessary to mention some of the factual background.

In 1939 Horace M. Mills resigned as collector of county taxes in Texas. He was convicted of embezzlement and served a prison sentence. Upon release in 1941 he came to Garland county, Arkansas, and for the past few years has claimed Hot Springs as his home. Judgment for the tax shortage of $17,197.96 has not been satisfied. Appellee's mother, Mrs. Ida Mills, is a resident of Smith county, Texas. Horace handles her investments as attorney in fact. In this manner Mrs. Mills acquired, for $18,000, Lot 9 of Block D, Point Lookout Subdivision. The purchase was made in October, 1947. Horace testified that he used $1,800 of his own money, and that his mother paid the difference. Some improvements were thereafter made, but the value is not shown.

Mrs. Opal L. Dodd--a native of Nebraska, but for nine years owner and operator of a 'motel' at Santa Monica, California,--came to Hot Springs in July, 1948, having sold her business. She is a widow with two children: a son 20 years of age, and a daughter two years younger. The three rented a lakeside cottage for temporary use, but immediately began scanning the newspapers to determine where desirable property could be procured. In this way Mrs. Dodd found advertisements by the Park Realty Company, with which Sam Ashabranner was at that time connected. Mrs. Dodd preferred a residence fronting Lake Hamilton with grounds suitable for cottages that might be built at reasonable costs. She thought week-end lettings would produce enough revenue to justify the enterprise as a whole. In selling the California property Mrs. Dodd had received $15,000 cash and a note for $60,000.

In 1948 Ashabranner was a licensed realtor and was actively engaged in selling the type of property Mrs. Dodd believed she wanted. He testified that the Mills estate had not been listed with his company; but remembering a conversation he had recently had with Mills, the realtor concluded he would 'take a shot in the dark', and when Mrs. Dodd explained that she was not financially able to purchase another place offered at $49,000, Ashabranner took Mrs. Dodd to see Mills, who permitted an inspection of the place she later contracted to buy. Ashabranner testified that Mrs. Dodd expressed satisfaction with the place--'it was exactly what she was looking for'. However, she wanted her daughter to be satisfied. A second appointment was made with Mills. Ashabranner drove out with Mrs. Dodd and with her daughter. He was not sure that the son accompanied them. Ashabranner's testimony was that when Mrs. Dodd first inspected the property Mills told her there were some building restrictions, but he wasn't certain what they were. Ashabranner's testimony on this point is copied in the margin. ¹

The realtor thought he told Mrs. Dodd that she probably would not want to put up structures costing less than $2,000:--'you couldn't build anything very nice for less than that, could you?'--and she replied that he was probably correct. This, said the witness, was the substance of discussions relating to restrictions.

Horace Mills testified that when Ashabranner and Mrs. Dodd called the first time he told them the place was not for sale. Mills first met Ashabranner about a month before when some Texas prospects were brought to look at the place. Thereafter he had not seen Ashabranner until July 18th. After the informal inspection during the morning, Mrs. Dodd returned with her two children and Ashabranner. In the meantime Mills had communicated with the agent of a Mr. Foster, from whom he proposed to purchase a nearby home in the event Mrs. Dodd concluded to buy at the price he intended to ask. Mills said that because of painting requirements he reduced by $530 the $35,000 he had at first asked.

Before the Offer and Acceptance had been signed by either of the parties [said Mills] he voluntarily stated in the presence of all that the property was restricted to residential use. According to Mills, Ashabranner, at Mrs. Dodd's request, then telephoned and had the abstract verified, and 'Ashabranner [came from the telephone] and quoted [the language of the restrictions as set out in the abstract] almost word for word. He didn't read from notes--just gave us the substance'. The witness was quite positive that Ashabranner's discussion of the restrictions occurred in the presence of Mrs. Dodd and her two children.

The down-payment of $4,000 was evidenced by Mrs. Dodd's check-draft on a Nebraska bank. It is dated July 20--two days later than the Offer and Acceptance, and was payable to Park Realty Company. The check was written on an Arkansas Trust Company from supplied by Ashabranner.

Mills testified that 'up to that time' his discussions with Ashabranner and Mrs. Dodd had been on a cash basis; he did not know that terms were to be asked, although he consented that Ashabranner might retain a commission of $1,750, following a disagreement as to the amount.

Although Mills disclaimed any intention of selling on time-payment, he readily admitted instructing Ashabranner to apply to the First Federal Savings & Loan Association for an abstract. The Association held a $12,500 mortgage on the property.

Emphasizing his dissent from the proposal relating to credit, Mills said that Ashabranner brought Mrs. Dodd to see him the day after the Offer and Acceptance had been signed and explained why it would be necessary to make an escrow agreement. Mrs. Dodd produced letters tending to authenticate her contention that the $60,000 note was prime paper and that it could be sold upon short notice. Mills thereupon consented to a delay of 10 or 15 days.

Up to this time Mrs. Dodd had not been represented by counsel. She did not know any attorney in Hot Springs, and had to depend upon the recommendations by strangers. Ashabranner mentioned Virgil Evans, ² to whom Mrs. Dodd applied. In consequence of a temporary understanding a joint letter was addressed to Evans August 3d, identifying the sale, the then unpaid balance of $30,470, the execution of Mrs. Ida Mills' warranty deed and its deposit with Evans, Mrs. Dodd's promise to pay the balance within fifteen days, and the seller's obligation to clear the property of all liens, etc.

Mills testified to conversations with Mrs. Dodd after the joint letter to Evans had been signed. He was short of money, but succeeded in procuring from Mrs. Dodd an additional $1,500 in consideration of a 30-day extension. The new agreement was prepared by Mills and dated August 27th. In the meantime he had received from Evans as escrow agent the deed executed by his mother and held under the joint letter contract of August 3d. Evans was leaving for two weeks and expected the deal to be closed during his absence. As a matter of fact, Mrs. Dodd had employed Evans to go to California and sell the $60,000 note--a mission he successfully performed. In connection with the extension agreement, Mills testified: 'We talked it over and they agreed to pay $1,500 more if I'd give them additional time--thirty days to sell the note--which was all right with me'. Other than the conversation Mills said he had in the presence of Ashabranner, Mrs. Dodd, and her two children, nothing touching the restrictions had been mentioned--'nothing was said about it when we closed the deal'.

Mills testified that he owed certain obligations--including $18,000 to a bank at Jackson, Miss.,--and that he had pledged $183,000 worth of securities. Half of these were later sold for $20,000.

After the contract of August 3d had been made Mrs. Dodd took possession of the lakeside property and kept it until September of the following year--a period of thirteen months; but in February preceding the surrender in September, Mrs. Dodd told Mills she would not go through with the deal. Mills said that Mrs. Dodd told him she wasn't going to get out until he refunded $3,000. 'This was the latter part of February, [but] I had spoken to her two or three times--from January till then'.

On cross-examination Mills was asked why, if the reservations were explained to Mrs. Dodd, nothing was said in either of the three writings concerning them. Referring to the Offer and Acceptance, Mills replied: 'That was just an interest in the sale: I didn't consider it a sale--not final; it was just an agreement'. When asked whether he was familiar with...