Baton Rouge Investment & Realty Co. v. Bailey

103 So. 184, 157 La. 838, 1925 La. LEXIS 1978
CourtSupreme Court of Louisiana
DecidedFebruary 2, 1925
DocketNo. 24905.
StatusPublished
Cited by4 cases

This text of 103 So. 184 (Baton Rouge Investment & Realty Co. v. Bailey) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Baton Rouge Investment & Realty Co. v. Bailey, 103 So. 184, 157 La. 838, 1925 La. LEXIS 1978 (La. 1925).

Opinion

THOMPSON, J.

This suit is for $6,000, being the double of an amount deposited by the plaintiff as earnest money under an agreement to purchase from the defendant certain farming lands described in plaintiff’s petition.

The basis of the demand is that the defendant had receded from his contract and promise of sale by failing and refusing to make, or to tender to the plaintiff, within the term fixed, an unincumbered, title to the land, such a title as could be approved by plaintiff’s attorney and such a title as plaintiff was entitled to demand and to receive.

The contract between the parties was made on April 28, 1920, and the deed was to be executed on January 1, 1921, but the acceptance by the plaintiff was conditional or was subject to the approval of the title by the plaintiff’s attorney.

The price of the sale was to be $30,610, one-third of which was to be paid in cash when the’ deed was accepted, and the balance in one and two years thereafter with interest.

It was agreed in the contract that if the plaintiff failed to take title after it had been approved by plaintiff's attorney, the $3,000 deposited was to be forfeited to the defendant as liquidated damages, and in the event the defendant refused to make the sale he was to ¿return to the plaintiff the said deposit of $3,000, and in addition to pay the plaintiff an equal amount.

The title to the property was investigated by plaintiff’s attorney and the land was found to be incumbered with mortgages, and this fact was made known to the defendant and his attorney prior to January 1st, the day on which the deed was to be executed.

The plaintiff’s attorney and the defendant and his attorney met on December 31st, when a formal deed was signed by the defendant (it having been previously signed by the plaintiff), which deed, the check for the cash payment, and the two notes representing the deferred payments were left in escrow with plaintiff’s attorney, and the matter was postponed until January 3d to give the defendant an opportunity to clear the property of incumbrances.

Nothing was done by the defendant towards removing the incumbrances within the delay, arid on January 8th the plaintiff’s attorney notified the defendant that the matter would have to be closed out not later than 12 o’clock noon on January 10th.

No step having been taken within this second delay to clear the land of the incumbrances, a formal written demand was made on the defendant for the return of the deposit and for the payment of the additional forfeiture. In this notice the defendant was specifically advised that the demand was made by reason of his failure to comply with the terms of the contract and to make the title as agreed on in the contract.

The notice was received by the defendant on January 15th and this suit was filed on the 25th of that month.

The pleadings allege, and the evidence establishes beyond a doubt, that the defendant at no time tendered to the plaintiff, or was in a position to make to the plaintiff, such a title as could be approved by plaintiff’s attorney, or such a title as plaintiff could be required to accept until nearly six months after the time fixed.

As a matter of fact the defendant, on June 28, 1921, after the close of the case, *841 moved the court to reopen the case to enable the defendant to show that since the trial of the case all mortgages and incumbrances of whatever character against the land had been canceled, and erased from the public records, thereby judicially admitting that up to that time defendant could not have made an unincumbered title to the land.

The property was acquired by the defendant on February 8, 1917, and as a part of the purchase price the defendant assumed the payment of $6,491.40, which was secured by a mortgage on the land.

This debt seems to have been paid by the defendant prior to January, 1, 1921, but the mortgage was not canceled until the 13th of that month.

On January 7, 1918, the defendant made and caused to be recorded in the mortgage records an affidavit setting forth that he was indebted to his wife, Mildred Elizabeth Bailey, in the sum of $10,000, which amount he had received from her as the proceeds of the sale of her separate property and which were used by him. (

Thereafter, to wit, on November 8, 1918, the defendant obtained against his wife a separation from bed and board, and this was followed by a judgment of final divorce, the last-named judgment being rendered on February 18, 1920.

It does not appear from the record that the defendant’s wife accepted the community within the delay following the judgment of separation from bed and board, as provided for in C. O. 2420, but on January 28, 1919, an agreement was entered into between the defendant and the attorneys for his wife, by Which the defendant acknowledged his wife’s interest in the community, and agreed to pay her the sum of $10,000 in full satisfaction of all claims, paraphernal, and of the community theretofore existing between them. Of this amount $5,000 was paid in cash and the balance was to be paid in three equal annual installments, with interest at 5 per cent, per annum. The $5,000 paid in cash was to be applied on the recorded paraphernal claim of Mrs. Bailey, and that claim was canceled to that extent on the mortgage records.

So that, at the time the sale was to have been made to the plaintiff and indeed up to January 13, 1921, there'stood upon the public records a mortgage and vendor’s privilege on the property for the sum of $6,418.67, and, up until after the trial of this suit, a mortgage in favor of the defendant’s wife for $5,000, with several years’ interest.

Under these circumstances it could scarcely be contended that defendant was at any time prior to June 28, 1921, in a position to execute to the plaintiff a clear and unincumbered title to the land which he had obligated himself to do on January 1, 1921.

The defendant, prior to June 28, 1921, could not have sohght specific performance on the part of the plaintiff of his contract to purchase.

The plaintiff was therefore clearly within his legal rights when, .on January 15, 1921, he notified defendant that he had defaulted on his contract.

The plaintiff had been extremely indulgent to the’ defendant and had given him more than a reasonable time to comply with his contract and to raise the mortgages on the land.

The plaintiff could not be expected to wait an indefinite period, dependent on the will and pleasure of the defendant. There was therefore nothing else left for the plaintiff to do but to notify the defendant that he had defaulted in his obligation and to seek recovery of the amount of his deposit.

After this notice, and after the filing of the suit, it was obviously too late for the defendant to offer to make title.

The learned counsel for defendant say that defendant was never put in default and that no demand was made on him to make title.

*843 The answer to this is that the defendant was obligated-to present to the plaintiff a title that plaintiff’s attorney could approve, and this was to be done within a definite and fixed time.

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Cite This Page — Counsel Stack

Bluebook (online)
103 So. 184, 157 La. 838, 1925 La. LEXIS 1978, Counsel Stack Legal Research, https://law.counselstack.com/opinion/baton-rouge-investment-realty-co-v-bailey-la-1925.