Parkerson v. R-5, Inc.

305 So. 2d 592, 1974 La. App. LEXIS 3387
CourtLouisiana Court of Appeal
DecidedDecember 10, 1974
DocketNos. 6501, 6502
StatusPublished
Cited by17 cases

This text of 305 So. 2d 592 (Parkerson v. R-5, Inc.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Parkerson v. R-5, Inc., 305 So. 2d 592, 1974 La. App. LEXIS 3387 (La. Ct. App. 1974).

Opinions

GULOTTA, Judge.

Plaintiffs appeal from a judgment decreeing that an earlier consent judgment [593]*593between the parties ordering specific performance of a contract to purchase immovable property is unenforceable since the act of sale was not passed on or before the expiration date fixed by the judgment. The consent judgment provided that the plaintiffs, the sellers, furnish good and merchantable title, but granted specific performance of an agreement sued upon which provided that the sellers would warrant title only against their own acts. Defendants refused to take title on or before the expiration date because of plaintiffs’ inability to convey a good and merchantable title.

Some factual background is necessary. On January 19, 1969, Sam J. Recile and Fargo Realty Co. acquired nine contiguous tracts of land, known as the Walnut Street properties, bounded by Walnut Street, Leake Avenue, Front Street and Audubon Park. At the time of purchase, Recile knew from his personal inspection of the property, and from the 1968 survey which was attached to the title binder that several encroachments (a fence, step and a shed) existed on one of the lots which rendered the title defective. However, since Recile’s intention was to acquire, the property adjacent to that lot on which the encroachments were placed, he chose to take title despite the defects. Once he acquired the second piece of property, the encroachments would not constitute an impediment.

Later in 1969, Recile met with plaintiff, James Parkerson, in the hope of convincing him to finance the anticipated development. An agreement was reached by which Parkerson advanced funds to Recile, and instead of a mortgage, Parkerson took title to the Walnut Street properties. It should be noted that in this transaction other properties were also transferred to Parkerson in anticipation of various real estate ventures, but these properties are not now involved in this litigation. Contemporaneously with the transfer of title from Fargo Realty Co. and Recile to Par-kerson, a net profits agreement was executed which bound the parties to share equally in the development or sale of the property. When Recile failed to develop the property, both parties became dissatisfied with the agreement, and as a result, they entered into a new agreement to purchase and sell, dated October 26, 1970, in which Parkerson agreed to sell to Recile, Fargo Realty Co., Transworld Title Corp., and S. Evans, Inc. the Walnut Street properties. The Recile group failed to take title on the date specified, and after several extensions and defaults, a new agreement to purchase and sell was executed on May 3, 1971. This agreement supposedly resolved all the financial difficulties between the parties. It was executed on a standard real estate form, except that Parkerson only contracted to warrant title against his own acts. Furthermore, another corporation, R-S, was substituted for Fargo Realty Co., and the agreement was executed in the name of R-S and Recile. Subsequently, the name R-5 was changed to Auster Oil and Gas Co.1 Upon the failure of the Re-cile interests to take title on or before the expiration date as set forth in the May 3, 1971 agreement, plaintiffs2 filed suit for specific performance to compel the transfer. Thereafter, a consent judgment was entered into ordering specific performance of the May 3, 1971 agreement, which included the provision for restrictive warranty, and further providing for the delivery of a good and merchantable title.

On the date specified in the consent judgment for the transfer of title, plaintiffs attempted to deliver the same title that they had acquired from the defendants, and the Recile interests refused to accept that title contending it was unmer-chantable because of the encroachments. Plaintiffs were unable to make the title [594]*594merchantable by removing the encroachments until nine months after the expiration date for the passing of the act of sale at a cost of approximately $15,000. Upon defendants’ initial failure to take title in January, plaintiffs sought by rule to have appropriate orders issue compelling defendants to take title or clarifying the consent judgment. This rule was dismissed.3 After removing the encroachments, the Par-kersons sought to make the consent judgment executory. Subsequently, the Recile interests filed a separate suit for a declaratory judgment praying that the consent judgment be declared unenforceable because merchantable title was not tendered on January 10, 1973 (the expiration date for passing the act of sale) and for a cancellation of a subsequent judicial mortgage.4 Both suits were consolidated for trial.

The trial judge granted defendants’ request for a declaratory judgment decreeing that the consent judgment was a valid judgment, but was unenforceable after January 10, 1973, the expiration date for the passing of the act of sale. He also ordered the judicial mortgage in favor of the plaintiffs erased and canceled. In his reasons for judgment, he stated that the consent judgment did not merely grant specific performance of the May 3 agreement (providing for a restrictive warranty) but was more in the nature of a novation requiring delivery of a good and merchantable title.

Plaintiffs, in seeking reversal, claim the consent judgment is ambiguous, and as such, the court should look to the pleadings, and actions of the parties, and hold that Parkerson was not obligated to deliver to the Recile interests any better title than he was obligated to deliver under the May 3 agreement, which required only a restrictive warranty.

Plaintiffs also contend that in a transaction which involves the same parties “good and merchantable title” means that the subsequent purchasers are only required to deliver to the sellers the same title that they originally received from the purchasers. Tn other words, “good and merchantable title” in this instance means good and merchantable as between the parties and not against the world.

Defendants contend that even if plaintiffs’ interpretation of “good and merchantable” is correct, they are, nevertheless, not compelled to accept title because a January, 1973 survey showed several encroachments in addition to those shown on the 1968 survey. They contend, therefore, that the title is not the same title that Par-kerson acquired from Recile in 1968.

Defendants also contend that the consent judgment is complete on its face and that the plaintiffs cannot seek to vary the terms of the agreement in the absence of allegations of fraud or error. Defendants also contend that “good and merchantable title” presupposes the existence of no impediment whatsoever either as between the parties or otherwise, and is a title which is not suggestive of litigation. Because of the inclusion of these words, defendants contend that they were not obligated to take a defective title despite the fact that they might have known about the encroachments.

None of the arguments advanced has merit because the consent judgment on its face is clearly contradictory. The consent judgment orders “specific performance of an agreement to purchase dated May 3, 1971.” That agreement provides “the seller shall deliver to the purchaser title without any warranties except against their own acts.” Nevertheless, the consent judgment further provides that the seller [595]

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Davis v. Farm Fresh Food Supplier
844 So. 2d 352 (Louisiana Court of Appeal, 2003)
Blitch Architects, Inc. v. "The Avenue Partnership"
632 So. 2d 850 (Louisiana Court of Appeal, 1994)
Succession of Koch
487 So. 2d 635 (Louisiana Court of Appeal, 1986)
Godfrey v. Project Square 376
477 So. 2d 920 (Louisiana Court of Appeal, 1985)
Chaisson v. Chaisson
454 So. 2d 890 (Louisiana Court of Appeal, 1984)
Braning v. Braning
449 So. 2d 670 (Louisiana Court of Appeal, 1984)
Bagby v. Dillon
434 So. 2d 654 (Louisiana Court of Appeal, 1983)
City of New Orleans v. Vanlangendonck
433 So. 2d 432 (Louisiana Court of Appeal, 1983)
Stone v. Stone
647 P.2d 582 (Alaska Supreme Court, 1982)
STATE, DEPT. OF TRANSP., ETC. v. KG Farms, Inc.
402 So. 2d 304 (Louisiana Court of Appeal, 1981)
Continental Insurance Co. v. Bayless & Roberts, Inc.
608 P.2d 281 (Alaska Supreme Court, 1980)
Martin v. Holzer Sheet Metal Works, Inc.
376 So. 2d 500 (Supreme Court of Louisiana, 1979)
Martin v. Holzer Sheet Metal Works, Inc.
363 So. 2d 544 (Louisiana Court of Appeal, 1978)
Parkerson v. R-5, Inc.
309 So. 2d 679 (Supreme Court of Louisiana, 1975)

Cite This Page — Counsel Stack

Bluebook (online)
305 So. 2d 592, 1974 La. App. LEXIS 3387, Counsel Stack Legal Research, https://law.counselstack.com/opinion/parkerson-v-r-5-inc-lactapp-1974.