Kay v. Carter
| Decision Date | 18 February 1963 |
| Docket Number | No. 46341,46341 |
| Parties | Stuart S. KAY v. Harold D. CARTER and Charles P. Kelley and Anna M. Kelley. |
| Court | Louisiana Supreme Court |
E. M. Nichols, Nichols & Drewett, Lake Charles, William C. Pegues, III, DeRidder, for relators-defendants.
Joe J. Tritico, Lake Charles, Jones & Jones, Baton Rouge, for respondent-defendant.
Certiorari was granted in this concursus proceeding in order that we might review a decision of the Court of Appeal, Third Circuit, which affirmed a district court decree sustaining a motion for a summary judgment filed (as herinafter shown) on behalf of one of the defendants. See 142 So.2d 836.
From the pleadings and annexed documents (on all of which the mentioned motion was solely predicated) it appears that on July 12, 1961 Charles P. Kelley entered into a written agreement to sell to Harold D. Carter certain lands, with improvements thereon, situated in Beauregard Parish. At the same time Carter, as stipulated, deposited with Stuart S. Kay (Kelley's then attorney) the sum of $500 to apply on the purchase price.
The written contract contained the following other pertinent stipulations: * * *
'If purchaser fails to comply with this agreement, seller shall have the option to retain said cash payment as liquidated damages, or to require specific performance.'
The abstract was timely furnished; and on or about July 28, 1961 Stuart S. Kay (attorney for Kelley) received a written opinion from J. B. Jones, Jr., (attorney for Carter) which noted some thirty-two asserted defects in the title to the lands involved and set forth numerous requirements for remedying them. Among those listed were certain recorded mineral reservations and leases and grants for the establishing of roads, most of which rights were held by the Long-Bell Petroleum Company and its affiliates. The opinion noted also that the title is presently in Anna M. Kelley (wife of the seller, Charles P. Kelley, as her separate and paraphernal property).
In response to the opinion Kay, through a letter of August 11, 1961, notified Jones that some of the requirements were either impossible or impractical to meet. The remainder, he said, could be complied with, but that for complying according to the suggestions furnished to him additional time would be needed; and he requested a time extension.
Subsequently, on August 22, 1961, Kay (for his client Kelley) wrote to Jones stating that steps had been taken, particularly with respect to the possible claims of the Long-Bell companies, which had rendered the title merchantable; and in proof thereof he tendered certain instruments. Rejecting the title thus offered, and demanding a return of the $500 initially deposited by him with Kay, Carter (through his attorney Jones) took the position that there remained substantial and uncorrected defects
Thereupon, Kay placed in the registry of the court the $500 which he held in escrow and instituted this concursus proceeding. In the petition, to which the described written contract was attached, he prayed that Carter, Kelley, and the latter's wife, be cited to appear and 'to assert their respective claims to the fund herein deposited * * *.'
The defendants answered and set forth the facts, substantially as outlined above, which preceded the commencement of the litigation. Additionally, the Kelleys alleged that the title tendered was merchantable, and Carter averred that it was not; the aforementioned correspondence was attached to the pleadings; and the Kelleys and Carter each asked to be awarded the $500 placed in the registry of the court by Kay. Also, the Kelleys prayed for a judgment ordering specific performance of the agreement to purchase. (The prayer for specific performance, along with the allegations relative thereto, was stricken from the answer of the Kelleys pursuant to a motion by Carter.)
Thereafter, Carter moved for a summary judgment, he relying solely on the pleadings (together with the annexed documents) and invoking Article 966 of the Louisiana Code of Civil Procedure which provides in part: 'The plaintiff or defendant in the principal or any incidental action, with or without supporting affidavits, may move for a summary judgment in his favor for all or part of the relief for which he has prayed. * * *
As we have heretofore noted the district court sustained the motion for a summary judgment filed by Carter; it decreed him to be the owner of the funds in question; and the Court of Appeal affirmed the rulings.
From the foregoing recitation it is apparent that the issue presently posed for determination is whether the pleadings and annexed documents show with certainty that the Kelleys had no merchantable title to convey to Carter within the thirty-day period provided for in the agreement to sell and purchase. The Kelleys maintain that such is not shown. They contend that at least there is disclosed the existence of a genuine dispute as to material fact, particularly in view of their assertions that the proof timely obtained and tendered cured all defects and rendered the title merchantable.
In deciding the mentioned issue consideration should be given to certain principles of law that are often employed in specific performance actions for determining whether or not titles are merchantable. In this connection we pointed out in Schaub et al. v. O'Quin, 214 La. 424, 38 So.2d 63 () that not all seeming defects render a title unmerchantable, especially those based on objections which are obviously groundless; it is when there are outstanding rights in third persons (not parties to the action) who might thereafter make claims of a Substantial nature against the property, and hence subject the vendee to Serious litigation, that the title is deemed not merchantable.
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...no writ)[8] Tull v. Mulligan, 48 P.2d 835, 842 (Okla. 1935), citing Pearce v. Freeman, 254 P. 719, 720 (Okla. 1927)[9] Kay v. Carter, 150 So.2d 27 (La. 1963). [10] One example of a temporary cessation of production clause is as follows: If after the discovery of oil or gas the production th......
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CHAPTER 9 APPLYING TITLE DEFECTS UNDER A TYPICAL PURCHASE AGREEMENT
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