Case Title: Ashworth v. Hankins

Citation: 408 S.W.2d 871

Docket Number: 5-4077

State: arkansas

Court: Arkansas Supreme Court

Date: 1966-12-12T00:00:00Z

Document:
408 S.W.2d 871 (1966) Leon ASHWORTH et ux., Appellants, v. H. C. HANKINS and Mrs. H. C. Hankins, Appellees. No. 5-4077. Supreme Court of Arkansas. December 12, 1966. *872 Murphy & Burch, Fayetteville, for appellants. Putman, Davis & Bassett, Fayetteville, for appellees. COBB, Justice. On October 18, 1962 appellants brought an equity action against appellees for specific performance of a contract for the sale of certain real property. Both parties resided in Washington County where the subject property was situated. A lis pendens was duly filed by appellants on October 18, 1962. At trial on March 29, 1963, the Court sustained a demurrer to plaintiffs' evidence and a decree was entered for defendants (appellees here). An appeal was perfected. Thereafter, on May 24, 1963, while the case was on appeal, appellees executed and delivered for a valuable consideration a deed to the property to one Ollie Tackett. This deed was duly recorded on May 29, 1963. On November 30, 1964, this Court reversed and remanded the cause, holding that appellants had made a prima facie case for specific performance. Ashworth v. Hankins, 238 Ark. 745, 384 S.W.2d 254 (1964). After remand, appellees filed a motion to dismiss appellants' complaint for want of equity jurisdiction. The motion stated that appellants no longer owned the subject property; that there was no longer any basis for equity jurisdiction, and that plaintiffs' complaint should be dismissed without prejudice. Plaintiffs' response was that a lis pendens had been filed; that any grantee of the subject *873 matter took the property with notice and subject to the ultimate outcome of the case, and that the Chancery Court had jurisdiction to either cancel and set aside the deed executed by the defendants or, in the alternative, to award plaintiffs damages. For reversal appellants contend that the Chancery Court erred in granting appellees' motion to dismiss. It is appellants' position that the Chancery Court (1) had jurisdiction to grant specific performance of the contract and (2) had jurisdiction in the alternative to award appellants damages. Appellants urge that the lis pendens, filed pursuant to Ark.Stat.Ann. § 27-501 (Repl.1962), put the subsequent purchaser on notice and therefore the property was conveyed subject to the outcome of this suit, including appellate review. In the case of Mitchell & Shaw v. Federal Land Bank of St. Louis, Mo., 206 Ark. 253, 174 S.W.2d 671 (1943), where a lis pendens was filed, we quoted with approval from 38 C.J. 4 as follows: The applicable lis pendens statute, Ark. Stat.Ann. § 27-501, supra, states as follows: Therefore, the purpose of a lis pendens is to put bona fide purchasers or mortgagees upon notice that the title to certain real or personal property is being litigated. See 54 C.J.S. Lis Pendens § 1, p. 571, from which we quote: Litigation is obviously not completed until appellate review is had in cases where appeals are perfected. We therefore hold, and possibly for the first time on this precise point, that the statutory effect of a lis pendens follows the litigation to its conclusion. We are supported in this rule by case authorities from other jurisdictions. We quote from Stuart et al. v. Coleman, 78 Okl. 81, 188 P. 1063, 10 A.L.R. 411 (1920): See also Patterson et al. v. Old Dominion Trust Co., 149 Va. 597, 140 S.E. 810, 141 S.E. 759 (1927); also Hart v. Pharaoh, 359 P.2d 1074 (1961) Okl. In this case, there was no decree other than of dismissal and no execution could issue. Indeed there would have been no yardstick by which the penal sum of a supersedeas bond could be computed. We find no merit in appellees' contention as to the necessity of a supersedeas bond to preserve appellants' rights as to the property pending appellate review. Appellants also contend that the chancery court had jurisdiction of the case to determine the alternative issue of damages. We agree. In McMillan Feeder Finance Corporation v. Stephens, 240 Ark. 167, 398 S.W.2d 535 (1966), we reiterated the rule that where an equity court takes jurisdiction of a case involving enforcement of a contract, it does so as to all matters in controversy and may allow damages. See also Askew v. Murdock Acceptance Corporation, 225 Ark. 68, 279 S.W.2d 557 (1955). We quote from Corbin on Contracts, Vol. 5A § 1161: See also Grummel v. Hollenstein, 90 Ariz. 356, 367 P.2d 960 (1962). It is now the duty of the trial court to proceed to hearing on appellants' action for specific performance and if the Court finds that appellants are entitled to such relief but that specific performance is not possible, then it is the duty of the equity court to assess damages, if any may be shown by appellants, as a result of the breach of contract. The case is reversed and remanded for further proceedings not inconsistent with this opinion. Reversed and remanded.