Hugus v. Sanders

• Decision Date: 19 May 1924
• Docket Number: 398
• Citation: Hugus v. Sanders, 261 S.W. 899, 164 Ark. 385 (Ark. 1924)
• Parties: HUGUS v. SANDERS
• Court: Arkansas Supreme Court

261 S.W. 899

164 Ark. 385

HUGUS v. SANDERS

No. 398

Supreme Court of Arkansas

May 19, 1924

Appeal from Hot Spring Circuit Court; Thomas E. Toler, Judge affirmed.

Judgment affirmed.

John L. McClellan and Gray, Burrow & McDonnell, for appellants.

1. It was error to refuse to transfer the case to equity. The complaint demands specific performance, i. e., to compel the vendee to accept the lease which he had refused, and pay over the exact purchase money. 5 Pomeroy's Equity Jur., 4th ed. 4875; 126 Ark. 339. That a complaint demands judgment for a sum of money only, does not necessarily stamp the action as one at law. 82 N.Y.S. 686. It is error for the court to require an equitable action to be tried as an action at law. 7 Wash. 431; 35 P. 138; 104 Ark. 322, 149 S.W. 101. Where a complaint states an equitable cause of action, or where a defense is interposed which is exclusively cognizable in equity, the case must be transferred to equity. 85 Ark. 208; 87 Ark. 206; Id. 142; 36 Ark. 228; 4 Pomeroy's Equity Jur. 4th ed., p. 3461. See also 46 Ark. 272; 95 Ark 118; C. & M. Digest, §§ 1034, 1044, 1045.

2. The question of title to real property, or the validity of same is always a question of law for the court, when, as in this case, there is no dispute as to any facts or records constituting or evidencing legal title. 85 N.E. 1107; 71 S.W. 549; 44 C. C., 110.

3. Appellants were entitled to a peremptory instruction. Appellee bound himself, and so admits, to furnish an abstract showing a record title, and we think, in the light of the evidence, that he failed in this. 73 Ore. 356, 144 P. 499; 134 Iowa 381, 105 N.W. 155; 119 Iowa 314; 93 N.W. 348; 173 N.W. 677; 214 S.W. 849; 7 A. L. R. 1162, note; 112 Minn. 388, 128 N.W. 459; 153 S.W. 641. On the question of the attorney's approval as a condition precedent, see 119 Ark. 418; 94 Ark. 263; 121 Ark. 482; 151 Ark. 343; 124 S.W. 23; 95 Cal. 626, 30 P. 789; 76 Va. 404; 68 Mo.App. 535; 26 N.Y.S. 48; 6 R. C. L. 956. An agreement specifying no time implies a reasonable time. 6 R. C. L. 896; 13 Carp. Jur. 791-2, § 1018; 116 P. 980; 154 N.W. 835; 63 So. 973; 147 N.W. 577; 223 F. 460; 254 Pa. 99, 98 A. 785.

D. D. Glover, for appellee.

The complaint stated a cause of action at law against both of the appellants, they both being made defendants therein. The Bank of Malvern did not ask that its defense be transferred to equity, at any time. Hugus alone, before filing an answer, moved to transfer to equity, and, the next day following the overruling of that motion, filed an answer, and never thereafter asked to renew the motion or to transfer. C. & M. Dig. § 1035; 52 Ark. 411; 37 Ark. 185; 87 Ark. 206; 104 Ark. 322.

OPINION

HUMPHREYS, J.

Appellee instituted suit against appellants in the circuit court of Hot Spring County, to recover $ 1,200, the purchase money for an oil and gas lease, alleging that he had performed all the conditions for the sale and purchase of said lease.

Appellant, D. F. Hugus, filed a motion to transfer the cause to the chancery court of said county and a separate answer, alleging, in his motion, that the suit was in effect a suit for a specific performance of the sale and purchase of said lease, and, in his answer, that the lease and money were deposited in escrow with appellant, the Bank of Malvern, to be delivered upon condition that appellee furnish an abstract showing a record title to the land which would meet the approval of appellee's attorneys, Reid, Gray, Burrow & McDonnell, or some member of the firm. That appellee had failed to perform the conditions of the escrow agreement. He prayed for a cancellation of the contract and for a return of the money deposited with the bank.

Appellant, Bank of Malvern, filed a separate answer alleging that it was holding the lease and money under an escrow agreement containing conditions not yet performed, and requested that it be directed to whom it should pay the escrow fund, and that, upon payment of same as directed, it be absolved from liability to either party. It did not join in or file a separate motion to transfer the cause to the chancery court. The court overruled the motion of appellant, D. F. Hugus, to transfer the cause to the chancery court, to which ruling an objection was made and exception saved, whereupon the cause was submitted to the jury upon the pleadings, testimony introduced by the respective parties, and the instructions of the court, which resulted in a judgment in favor of appellee, from which is this appeal.

The record reflects a sharp conflict in the testimony. That introduced by appellee was, in substance, as follows: On the 24th day of April, 1922, appellee agreed to sell an oil and gas lease he had purchased from C. H. Holcomb upon a twenty-acre tract of land in said county to appellant, D. F. Hugus. After the assignment of the lease had been executed by appellee, it was regarded as necessary for his wife to join in the assignment. The parties repaired to the bank where the lease was left, with direction to forward same to appellee's wife, who was in Oklahoma, for her signature. At the time D. F. Hugus drew a draft for $ 1,200 on his home bank in Louisiana, payable to appellee, which was indorsed and delivered to the bank for collection. The bank was instructed, when the lease was returned and the draft collected, to turn the lease over to D. F. Hugus and to deposit the money to the credit of appellee. At the time the papers were drawn up and left with the bank, appellee was assisting Blaine Holcomb in drilling an oil well about six miles east of Malvern, and instructed the bank to allow his father, M. E. Sanders, to act for him in winding up the lease transaction in case he could not be present. Appellee and his father admitted that he agreed to furnish an abstract showing record title to the land, which should be examined by the law firm of Reid, Gray, Burrow & McDonnell or any one of them, but denied that he was to do this before he received the purchase money for the lease. Appellee furnished the abstract, however, on the day of the transaction at the bank. They both testified that they (lid not receive or know of a letter written by Reid, Gray, Burrow & McDonnell to D. F. Hugus on April 29, 1922, pointing out defects in the title and making requirements necessary to perfect same. Blaine Holcomb testified that, after Mr. Burrow examined the abstract, he requested him to get a quitclaim deed from J. P. Allen and wife to himself to clear the title so he could approve same, and, pursuant to the request, he sent to Louisiana and got the deed; that he received it the 17th or 18th of May, 1922, but did not give it to appellee until the 6th day of June following; that he took it to Mr. Burrow's office before that to give it to him, but he was not there; that Mr. Burrow made no other complaint about the title to him. M. E. Sanders testified that Blaine Holcomb told him that Hugus' attorney had requested a quitclaim deed from J. P. Allen and wife, and Holcomb agreed to get it; that he talked to Mr. Burrow about the transaction a time or two and informed him that they were waiting and depending upon Holcomb to get the deed. Appellee testified that he obtained the Allen quitclaim deed from Blaine Holcomb on June 6, 1922, took it to the bank, and was instructed by the cashier to take it to Mr. Burrow; that he took it to his office and found it closed, and then left it at the bank. On June 10, 1922, appellee gave his father a check for $ 1,200 on the Bank of Malvern, which it refused to pay.

The testimony introduced by appellants was, in substance, as follows: the gas and oil lease in question, together with the purchase money therefor, were deposited with the Bank of Malvern in escrow under agreement that the lease should be delivered to Hugus and the money to appellee when an abstract showing a record title should be furnished by appellee and approved by Hugus' attorneys or one of them. The abstract was furnished and examined by the attorneys, who wrote a letter to D. F. Hugus on April 29, 1922, specifying the requirements necessary to perfect the title. Hugus testified that he delivered the letter and abstract to C. T. Riley, who was interested with him in the lease, with request that he give it to M. E. Sanders so that he might comply with the requirements. T. C. Riley testified that he delivered it to M. E. Sanders and requested him to comply with the requirements at once. The requirements had not been complied with on June 6, 1922. On that date D. F. Hugus notified the bank that the deal was off and the contract canceled on account of the failure of appellee to comply with the escrow agreement. He demanded a return of the money. The bank immediately notified appellee in writing of the position assumed by Hugus. An oil boom was on in the vicinity of Malvern in April when the lease was placed in the bank, but it subsided in June when Hugus declared the deal off and demanded a return of his money. The oil lease market had been active during the interim.

In the course of the trial appellee was permitted, over the objection and exception of appellants, to testify that he knew the title to the tract of land in question was all right because he got another lawyer in Malvern, Henry Berger, to pass on it, and he said it was good; and to prove by Blaine Holcomb that he was acquainted with the title and abstract to the land, and, in his opinion, the same was good.

In the progress of the trial appellants offered to prove by D. F Hugus, who was an experienced oil man, the customary time allowed in the oil business for vendors to perfect defective titles to lands upon which leases were bought and sold under contracts for abstracts showing record titles. The court excluded the evidence, over their...