Hinton v. Martin

• Court: Arkansas Supreme Court
• Writing for the Court: SMITH, J.
• Citation: Hinton v. Martin, 236 S.W. 267, 151 Ark. 343 (Ark. 1922)
• Decision Date: 16 January 1922
• Docket Number: 88
• Parties: HINTON v. MARTIN

236 S.W. 267

151 Ark. 343

HINTON v. MARTIN

No. 88

Supreme Court of Arkansas

January 16, 1922

Appeal from Union Circuit Court; Charles W. Smith, Judge; affirmed.

Judgment affirmed.

Mahoney & Yocum, for appellant.

In arriving at the intention of parties to a contract, it must be construed as a whole and not from some particular word or words. 130 Ark. 381. A purchaser is entitled to a marketable title in the absence of a stipulation to accept a different title. 85 Ark. 289; 120 Ark. 69. Where a "good and valid deed of conveyance" was provided for, held, the purchaser was entitled to a marketable title. 21 Ark. 298. The same conclusion was reached by the court in the following cases: 44 Ark. 145; (a deed of conveyance in fee of the legal title of, in and to said tract of land and appurtenances); 63 Ark. 549 (a good and sufficient title in fee simple) citing 120 N.Y. 253.

A marketable title is, "a clear record title." 120 Ark. 76; 51 N.Y.S. 828. See also 121 Ark. 482.

The parties did not agree to abide by the opinion of Marsh and Marlin.

A purchaser is not concluded by the advice of his attorney where he was not authorized to waive objections. Devlin on Real Estate (3rd ed.) vol. 3, sec. 1529; 92 P. 315. The opinion of the attorneys was improperly admitted in evidence. 91 Tex. 527; 44 S.W. 819.

Instruction No. 4 giving the jury the right to pass upon the kind of title contracted for should have been given as well as No. 5 which would have submitted the construction of the contract to the jury. 129 Ark. 473; 81 Ark. 337; 35 Ark. 156.

Powell & Smead, for appellee.

The contract shows that the parties agreed to leave the question of title with Marsh and Marlin. The opinion of these attorneys stated that the title, "is good and indefeasible," which is more than a "merchantable" title. 33 L.Ed. 53; Bouvier's Law Dic. 3d Revision, vol. 2, p. 1532.

SMITH J., MCCULLOCH, C. J., concur.

OPINION

SMITH, J.

The complaint in this case alleged that on January 28, 1921, E. C. D'Yarmitt delivered to appellee, C. M. Martin, as part payment on an oil lease, a check of D'Yarmitt, payable to appellant, Harley Hinton, drawn on the Commercial National Bank, of Muskogee, Oklahoma, in the sum of $ 2,500, pursuant to a contract for the sale of said lease. By the terms of said contract it was agreed that D'Yarmitt should pay the additional sum of $ 13,500 in payment of the balance of the purchase price of said lease upon the approval of the title thereof by Marsh & Marlin, a firm of attorneys selected to examine the title, this payment to be made by a deposit in the Bank of Commerce at El Dorado, Arkansas, and if not made on or before five o'clock of the afternoon of February 4, 1921, that D'Yarmitt should forfeit to Martin as liquidated damages the sum of $ 2,500 represented by said check.

An opinion was filed at the bank by Marsh & Marlin within the time limited approving the title; but D'Yarmitt failed to deposit the balance of the purchase price. Thereafter Hinton indorsed the check, which was forwarded to the bank at Muskogee for payment. The check was protested, and Hinton has been sued as an indorser.

The facts recited are undisputed, but there is a controversy as to the conditions under which Hinton indorsed the check. He testified that he had no interest in the transaction and indorsed the check upon the express understanding that he was doing so solely for the purpose of enabling Martin to collect it, and upon the agreement that he should not be held upon his indorsement. Hinton is corroborated by other witnesses who were present at the time the cheek was indorsed. But this testimony is not undisputed. Upon the contrary, there was testimony that the indorsement was unconditional. The instructions are not set out, and it will therefore be presumed that this issue was correctly submitted to the jury, and the verdict in favor of the plaintiff Martin is conclusive of that question of fact.

It is insisted that the title to the land was not a marketable one, and that the consideration for the contract has therefore failed.

The stipulations in the contract of sale in regard to the title are as follows: It is first recited that D'Yarmitt "has agreed to purchase and pay therefor, on the approval of the title by his attorneys, Marsh & Marlin." It is then provided that the sum of $ 2,500 is "to be paid to the said C. M. Martin as soon as title is examined and approved by the said Marsh & Marlin." And "it is understood, however, that if the abstract of title is furnished and attorney's opinion rendered approving the title by Friday, February 4, 1921, by five o'clock, P. M. * * * " that D'Yarmitt shall pay the sum of $ 16,000; and that, if he fails so to do, the sum of $ 2,500, represented by the check, should be paid to Martin as liquidated damages. The contract contained the further recital that "It is further understood and agreed that, if the said Marsh & Marlin shall approve said title, and if the said E. C. D'Yarmitt shall pay the full and total sum of $ 16,000 therefor within said time, the said bank shall deliver to the said E. C. D'Yarmitt said mineral deed with the abstract of title to be deposited in said bank by the said C. M. Martin, and shall pay over said sum of money to the said C. M. Martin. It is agreed that, should the said Marsh & Marlin find said title defective and not merchantable, and their written opinion shall so state, then the sum of $ 2,500 so deposited by the said E. C. D'Yarmitt shall be returned to him, and the said mineral deed shall be returned to the said C. M. Martin."

Upon an examination of the title a written opinion was prepared by Marsh & Marlin to the effect that the deed deposited by Martin in the bank would convey, when delivered, a "good and indefeasible" title. It is insisted, however, that this opinion did not bind D'Yarmitt, because, as is disclosed by the abstract and also by the testimony of N. C. Marsh, of the firm of Marsh & Marlin, who examined the abstract, the title depends on the adverse occupancy of the present owner, and is not a perfect paper title.

It is insisted by appellee Martin that it is immaterial that the title, as disclosed by the abstract, is not good, for the reason that the parties, by their contract, agreed that the opinion of Marsh & Marlin should be conclusive of that question, and that firm of attorneys prepared and delivered an opinion that the title was "good and indefeasible." On the other hand, it is insisted that the recital of the contract that "it is agreed that, should the said Marsh & Marlin find said title defective and not merchantable, and their written opinion shall so state," * * * conferred on the attorneys the power and duty only of determining whether the title was defective and not merchantable and that, inasmuch as it appears from the abstract, as well as from the testimony of the attorney who examined the abstract, that the record title was not perfect, the opinion approving the title was demonstrably erroneous and was not binding on the purchaser.

It is the insistence of appellant that, when the contract is construed as a whole, it discloses an agreement to convey a merchantable title as shown by the abstract, and that, as the title tendered was not a perfect paper title, the attorneys exceeded their authority under the contract in approving the title as having been perfected by the adverse possession of the vendor.

In other words, appellant contends that the examining attorneys ignored the rule announced by this court in the case of Mays v. Blair, 120 Ark. 69, 179 S.W. 331, and reaffirmed in the case of Shelton v. Ratterree, 121 Ark. 482, 181 S.W. 288, and that under the contract the purchaser was entitled to a merchantable or marketable title, and that the title was not a marketable one, inasmuch as it depended on the adverse possession of the vendor.

The testimony of Marsh makes it clear that he was familiar with the opinions of this court in the cases of Mays v. Blair and of Shelton v. Ratterree, supra, and that he used the term "good and indefeasible," rather than the term "marketable," because the paper title was not good.

There is nothing in the contract between the vendor and the vendee to indicate that the vendor had contracted to convey, or that the vendee had agreed to accept, anything except a marketable title. The contract provided that if the attorneys should find the title "defective and not merchantable," then the deposit of $ 2,500 should be returned and the trade be at an end. The word "merchantable," there used, is synonymous with the word "marketable," and is used interchangeably with it by all the courts in discussions of titles to land. Moreover, we said, in the case of Mays v. Blair, supra, that "there is an implied agreement, unless stipulated to the contrary, that the purchaser shall receive a marketable title."

In the case of Mays v. Blair we held that a title, to be marketable, must be a clear record title, and that title by adverse possession does not constitute a marketable title, which a purchaser under an executory contract is bound to accept. That doctrine was reaffirmed in the case of Shelton v. Ratterree, supra, where we refused to enforce the specific performance of a contract because the title tendered under the contract was not a title of record, but depended upon the adverse possession of the vendor.

In view of our holding in these two cases, and of the admitted condition of the title here tendered, were the attorneys justified in distinguishing between a "good and indefeasible" title and a "marketable" title, and in accepting, for the purchaser, anything less than a title which the purchaser was entitled to demand under the contract, if there is, in fact, a difference?

It...