Spragins v. Louise Plantation, Inc.

Decision Date03 December 1980
Docket NumberNo. 52252,52252
Citation391 So.2d 97
PartiesC. A. SPRAGINS, Sr., et al. v. LOUISE PLANTATION, INC., et al.
CourtMississippi Supreme Court

Charles S. Tindall, Frank S. Thackston, Jr., Lake, Tindall, Hunger & Thackston, Greenville, for appellants.

Philip Mansour, Mansour & Thomas, Greenville, for appellees.

Before PATTERSON, C. J., and WALKER and BROOM, JJ.

BROOM, Justice, for the Court:

Sales contracts involving farm lands situate in Arkansas are background to this action appealed from the Chancery Court of Washington County. Under the terms of the four contracts appellants (C. A. Spragins, Sr. and his children, Ruth S. Cranston, Martha Veal, and C. A. Spragins, Jr.-Spragins herein) agreed to sell the lands to Kay R. Taylor. Refusal of the Spragins to convey one of the farms resulted in this specific performance suit filed by complainants/appellees Taylor and Dough Boy, Inc., Louise Plantation, Inc. and Huber Farm Service of Greenville, Inc., each being a Mississippi corporation. The lower court declined to order specific performance but awarded Taylor and the three corporations damages of $112,576, plus Taylor's $30,000 down payment, totalling $142,576. From that award, the Spragins appeal, and Dough Boy cross-appeals from failure of the lower court to award Dough Boy $80,000 for services rendered.

On their direct appeal, the Spragins argue that the lower court erred in: (1) excluding the oral and documentary evidence offered by Spragins to show that Kay R. Taylor was a broker throughout and that she violated her fiduciary obligations; (2) failing to find the sales contract unenforceable under Arkansas law; (3) failing to find that Mrs. Taylor breached her fiduciary duties as a broker; (4) finding that appellant Ruth Cranston breached the sales contract; (5) dismissing the $80,000 claim for commission without prejudice; and (6) failing to order the execution by appellee Louise Plantation, Inc. of the deeds requiring the corporation's signature and delivery to effect vesting of title in appellants Spragins.

Background to this litigation are the following facts related to four farms in Chicot County, Arkansas. C. A. Spragins, Sr. owns two of the farms known as "Caney Bayou" and "Edith." His daughter, Martha Veal, owned "Indian" farm and his other daughter Ruth S. Cranston owned the other farm known as "Emenheiser" or "Boeuf River." By contracts dated June 20, 1978, Spragins (representing himself and his daughters) granted Kay R. Taylor an option to purchase each farm; these contracts provided an expiration date of August 10, 1978. Attached to each option contract was a document authorizing Taylor to locate and sell to a purchaser the land and in return she would be paid a five percent commission. The attached document provided that Spragins gave to Taylor permission to

cooperate with a broker or brokers in or out of the State of Mississippi using your own judgment in this matter.

At trial Spragins offered into evidence these option contracts and attached documents which the chancellor excluded on the ground that such evidence was an attempt to vary the terms of a subsequent contract sued upon and that the offered documents pertaining to the June 20, 1978 contracts had become merged into a subsequent contract dated October 24, 1978. The latter contract identified Taylor as simply a "purchaser" whereas the June 20th contract and attached document indicated that Taylor was acting as a "broker" in the sale of the land.

In Cause No. 38,703, C. A. Spragins, Sr. and wife Olivia W. Spragins, as complainants, sued Taylor, Dough Boy, Inc. and Louise Plantation, Inc. averring that the sale of the "Edith" farm had been consummated except Taylor and the two corporate defendants had refused to deliver unto appellants Spragins certain deeds conveying land that was to be swapped to the Spragins. In this action the Spragins sought delivery of proper conveyance of title from Louise Plantation so as to vest in the Spragins title to the land which was to be swapped to them.

In Cause No. 38,844 below the complaint as amended was filed by complainants (appellees and cross-appellants here) Louise Plantation, Inc., Kay R. Taylor, and Dough Boy, Inc. seeking the following relief: (1) specific performance conveyance of Ruth Cranston's farm as contracted in the October 24, 1978, sales contract-sales of the other three farms were consummated and not in issue here; the Cranstons who refused to consummate sale of their "Emenheiser" or "Boeuf River" farm were not involved in the other transactions; C. A. Spragins, Sr. and C. A. Spragins, Jr. were joined as defendants because they acted for Mrs. Cranston. (2) Taylor sought recovery of $100,000 for loss of profits by her. (3) Dough Boy, Inc. sought $80,000 for services rendered regarding the consummated sales of lands. In this connection it is to be noted that attached to the October 24, 1978, contract was a letter addressed to Dough Boy, Inc., signed by C. A. Spragins, Jr., Attorney in Fact as "owner," and "Kay R. Taylor, Pres." above a line under which was typed "ACCEPTED." This letter stated:

Upon sale and closing of my property located in the County of Chicot, State of Arkansas, consisting of 1600 acres, at a price of $1,000.00 per acre, you shall be paid $80,000.00 for services rendered.

Both causes were consolidated at trial. Spragins argues, in the main, that Kay R. Taylor was a "broker" throughout each of the transactions set forth above, that she violated her fiduciary obligations by failing to reveal that she represented other interests and made secret profits on the three transactions closed and, that under Arkansas statutes she acted as a "real estate broker" without an Arkansas license. Spragins, therefore, contends that the sales contract under which she claimed loss of profits for herself and a fee for services rendered by her corporation Dough Boy was unenforceable. We agree.

Before examining the facts before us, however, we must first address and resolve two preliminary issues: (1) does Arkansas or Mississippi law apply, and (2) does the parol evidence rule apply.

DOES ARKANSAS OR MISSISSIPPI LAW APPLY?

It is true that Mrs. Taylor and the appellants are all Mississippi residents; but the four farms in question are all located in Arkansas. Although the contracts were entered into in Arkansas, negotiations occurred in Mississippi, Arkansas, and Tennessee. The sale of three of the farms was concluded in Tennessee.

In cases involving a choice-of-law or conflict-of-law problem, this Court has adopted the center of gravity doctrine or the most significant relationship test. As Justice Rodgers noted in Craig v. Columbus Compress & Warehouse Co., 210 So.2d 645, 649 (Miss.1968):

This doctrine is a rule whereby the court trying the action applies the law of the place which has the most significant relationship to the event and parties, or which, because of the relationship or contact with the event and parties, has the greatest concern with the specific issues with respect to the liabilities and rights of the parties to the litigation. 15A C.J.S. Conflict of Laws § 8(2) (1967).

In order to determine the most significant relationships, this Court has looked to Restatement (Second) of Conflict of Laws for guidance. In Mitchell v. Craft, 211 So.2d 509, 515-6 (Miss.1968), Chief Justice Ethridge quoted extensively from Restatement (Second). Especially helpful in identifying choice-influencing considerations and the most significant relationship is § 6 of Restatement (Second) of Conflict of Laws :

§ 6. Choice-of-Law Principles

(1) A court, subject to constitutional restrictions, will follow a statutory directive of its own state on choice of law.

(2) When there is no such directive, the factors relevant to the choice of the applicable rule of law include

(a) the needs of the interstate and international systems,

(b) the relevant policies of the forum,

(c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue,

(d) the protection of justified expectations,

(e) the basic policies underlying the particular field of law,

(f) certainty, predictability and uniformity of result, and

(g) ease in the determination and application of the law to be applied.

In order to determine the conflict of law issue, this Court needs to examine the apposite statutory provisions of both states. Ark.Stat.Ann. § 71-1309 (Repl.1979) * outlines the procedure involved for a non-resident real estate broker to transact business in the state. A non-resident real estate broker may associate with a resident broker in order to comply with the statutory requirements. See Mississippi Code Annotated § 73-35-11 (1972).

Spragins asserts that the chancellor was manifestly wrong in failing to find the sales contract unenforceable under Ark.Stat.Ann. § 71-1301 (Repl.1979) * because Taylor did not secure a real estate license in Arkansas. Violation of the statute is punishable criminally by fine and imprisonment. See Mississippi Code Annotated § 73-35-31 (1972).

Real estate broker is defined by Ark.Stat.Ann. § 71-1302 (Repl.1979) * as one who "sells (or) ... purchases .... for another with the intention ... of receiving any valuable consideration...." The statute also disallows an unlicensed broker to bring suit for his fee in state court.

The licensing provisions of both Arkansas and Mississippi were enacted to protect sellers of real estate from unconscionable brokerage practices. Neither state's policy is in conflict with the other. Arkansas rather than Mississippi, however, appears to have more significant contacts with the issues. Although the location of the land is not the overriding consideration, that coupled with the fact that all of the contracts and brokerage agreements were executed and signed in Arkansas gives Arkansas more of an interest in the case. The parties, in addition to the foregoing reasons,...

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