Case Name: Norman Lind YOUNG v. Mrs. Helen W. STEVENS et al.
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1967-06-05
Citations: 252 La. 69
Docket Number: No. 48459
Parties: Norman Lind YOUNG v. Mrs. Helen W. STEVENS et al.
Judges: PIAMITER, J., dissents with written reasons.
Reporter: Louisiana Reports
Volume: 252
Pages: 69–99

Head Matter:
209 So.2d 25
Norman Lind YOUNG v. Mrs. Helen W. STEVENS et al.
No. 48459.
June 5, 1967.
On Rehearing Nov. 6, 1967.
Rehearing Denied April 29, 1968.
On Second Rehearing March 25, 1968.
Fernand F. Willoz, III, New Orleans, for defendant-appellee, applicant.
Harry T. Howard, III, Charles E. Richards, Jr., Chaffe, McCall, Phillips, Burke, Toler & Hopkins, New Orleans, for plaintiff-appellant-respondent.

Opinion:
SUMMERS, Justice.
Presented for determination as the principal question in this suit is whether the title to certain real estate is merchantable.
On March 9, 1965, by written agreement designated "Agreement to Purchase or Sell", Mrs. Helen W. Stevens offered and agreed to sell for $24,750 the premises referred to as: "1228 Arabella Street, Single, Two Story On grounds measuring about 40' x 120' or as per title." The sale was to be on terms of credit and was conditioned on the ability of the purchaser to obtain a satisfactory loan, as detailed in the agreement. Latter & Blum, Inc., was designated in the agreement as the real estate agent for the transaction.
Norman L. Young agreed to purchase the property and signed the acceptance on March 10, 1965. As required by the agreement, he deposited $2,475 with the seller's agent, which was 10 percent of the purchase price.
The agreement further provided that:
"The seller shall deliver to purchaser a merchantable title, and his inability to deliver such title within the time stipulated herein shall render this contract null and void, reserving unto purchaser the right to demand the return of the deposit from the holder thereof, and reserving unto agent the right to recover commission.
"Either party hereto who fails, for any reason whatsoever, to comply with the terms of this offer, if accepted, is obligated and agrees to pay the agent's commission and all reasonable attorney's fees and costs incurred by the other party, and/or agent in enforcing their respective rights."
The prospective lending agency in this transaction, The Carruth Mortgage Corporation, caused a survey of the premises to be made for the account of the purchaser Young on May 4, 1965. The lot was surveyed as Lot "X" fronting on Arabella Street in Square 44, Hurstville, Sixth District of the city of New Orleans, said square being bounded by Nashville Ave., Prytania St., Arabella St. and Perrier St. The survey revealed the following encroachments:
1. A concrete drive strip belonging to Mrs. James Van Burén Gresham, the adjoining property owner, encroaching onto the lot in question from the property on the Prytania Street side to the extent of one foot at the intersection of the Prytania Street side property line at Arabella Street and tapering back in diminishing width to a point on the Prytania Street side property line about 25 feet distant from the front of the lot on Arabella Street.
2. A fence belonging to the adjoining property owner, Mrs. James Van Burén Gresham, encroaching onto the property on the Prytania Street side commencing about half way back from the front of the lot, to the extent of 1 foot 3 inches, and tapering down to the property line about two-thirds of the distance from Arabella Street to the rear of the lot.
3. A fence encroachment at the rear of the lot onto the adjoining lot in the rear to the extent of 10 inches 6 lines near the Prytania Street side of the lot and tapering down to 3 inches to 5 lines towards the Perrier Street side.
4. A fence encroachment onto the adjoining property on part of the Perrier Street side to the extent of 6 inches 0 lines.
Being of the opinion that the driveway and other encroachments made title to the property unmerchantable, the purchaser Young notified the seller Mrs. Stevens that he considered the contract void. But Mrs. Stevens was unwilling to declare the purchase agreement null and void or to return his deposit; nor was she able to clear the encroachments revealed by the survey. Young then instituted suit against Mrs. Stevens and the agent Latter & Blum for the return of his deposit with interest, attorneys' fees and costs. Mrs. Stevens answered admitting the encroachments, but she denied that they rendered her title unmerchantable. She asked for the forfeiture of Young's deposit of $2,475, for attorneys' fees and for costs of the proceedings.
Mrs. James Van Burén Gresham, the adjoining property owner, steadfastly refused to remove the encroaching driveway or fence on the Prytania Street side of the lot in question. Mrs. Stevens therefore asserted a third-party demand against her for indemnification in the event it should be held that the encroachments rendered the property unmerchantable.
Latter & Blum answered and set forth its position as a stakeholder of the deposit. It also prayed for judgment against Young for its commission of $1,485, together with attorneys' fees in the amount of $500 with interest'and costs.
A motion for summary judgment was tried upon a joint stipulation of facts. Whereupon the trial court dismissed plaintiff's suit and declared Mrs. Stevens to be entitled to the deposit, less the amount due the real estate agent. This-result made an adjudication of the third party demand unnecessary.
The Court of Appeal reversed the judgment and declared that plaintiff was entitled to the refund of his deposit and to attorneys' fees and costs; it held that Latter & Blum would have to proceed against the seller and defendant Mrs. Stevens for its commission; and it remanded the cause for further proceedings to permit the prosecution of defendant's third party demand against Mrs. Gresham. (190 So.2d 264.)
Certiorari was granted on the application of Mrs. Stevens.
Property has a merchantable title when it can be readily sold or mortgaged in the ordinary course of business by reasonable persons familiar with the facts and questions involved. Roberts v. Medlock, 148 So. 474 (La.App.1933). "(O)ne should not be made to accept a title tendered as good, valid and binding unless it is entirely legal from every point of view." Bodcaw Lumber v. White, 121 La. 715, 721, 46 So. 782, 784 (1908). The promisee in a contract to sell is not called upon to accept a title which may reasonably suggest litigation. Marsh v. Lorimer, 164 La. 175, 113 So. 808 (1927). And while the amount involved may be small, "it cannot be said that because of this fact the danger of litigation is not serious. No one can be forced to buy a lawsuit " Rodriguez v. Shroder, 77 So.2d 216, 224 (La.App.1955). See Patton on Titles § 46 et seq. (2d ed. 1957) ; 92 C.J.S. Vendor and Purchaser § 209, 211 (1955); 55 Am.Jur. Vendor and Purchaser § 252, 253, 254 (1946).
The encroachments upon the property in this case undoubtedly suggest litigation; for the purchaser could not take peaceful possession of the entire property if part of it is occupied by Mrs. Gresham, who, the record shows, refuses to surrender the controverted strips. No circumstance more clearly suggests litigation than this fact. Truly, Young would be buying a lawsuit, .or he would have to take less footage than the agreement calls for, either condition being a violation of the requirement that he be furnished a merchantable title. In like manner, a person buying property whose improvements encroach upon his neighbor is likely to sustain a law suit to defend his right to possession of the property sold to him beyond his title. Kay v. Carter, 243 La. 1095, 150 So.2d 27 (1963) ; DeSalvo v. Doll, 209 La. 1063, 26 So.2d 140 (1946); Jacobs v. Freyhan, 156 La. 585, 100 So. 726 (1924) ; Schroeder v. Krushevski, 186 So.2d 640 (La. App.1966); Clesi, Inc. v. Quaglino, 137 So. 2d 500 (La.App.1962); Papalia v. Hartson, 52 So.2d 775 (La.App.1951).
The same result obtains, therefore, whether the adjoining property owner's improvements encroach upon the property to be sold or whether the property to be sold encroaches onto the adjoining property. What makes the title unmerchantable in either instance (and both occur here) is not necessarily the extent of the encroachment, but the fact that it suggests litigation. The law will not require Young to assume Mrs. Stevens' controversy with her neighbor.
Indeed, the prospect of litigation is the very circumstance which would destroy the principal cause of a contract to purchase a home. A person buying a home wants, above all, peaceful occupancy among peaceful neighbors. Selling him property which will probably bring on a lawsuit is contrary to that motive and furnishes a basis for nullifying the contract. La. Civil Code art. 1823 (1870).
It will not do in such a case to contend, as Mrs. Stevens does here, that the encroachments are de minimis. To begin with the encroachments consume about 1/40th of the lot area. This is significant. But what is more noteworthy is the fact that, until this time, no one has been able to remove the objectionable encroachments without a lawsuit, not even the vendor Mrs. Stevens who advances the contention that they are insignificant.
We are able to distinguish the authorities relied upon by Mrs. Stevens. Insofar as we deem it appropriate to discuss those distinctions, we make these observations: Hunley v. Ascani, 174 La. 712, 141 So. 385 (1932) deals with discrepancies in the quantity of ground between the dimensions given in a contract to purchase and sell and in the dimensions in the title sought to be conveyed pursiiant thereto. The case does not involve an encroachment which suggests litigation. Scurria v. Russo, 134 So.2d 679 (La.App.1961) likewise has to do with a shortage in the area of the property contracted to be sold, not with an encroachment suggesting litigation. O'Reilly v. Poché, 162 So.2d 787 (La.App.1964), and Werk v. Leland University, 155 La. 971, 99 So. 716 (1924) simply recognize the established proposition that where there is a conflict between the calls in a deed and a survey referred to in the deed the survey governs.
We conclude that the title in question is not merchantable.
The pertinent part of the "Agreement to Purchase or Sell", quoted in the beginning of this opinion, entitles the purchaser to a return of his deposit when the seller is unable to convey a merchantable title.
The allowance of $500 attorneys' fees to Mr. Young is amply supported by the record before us and the work performed under the eye of the Court.
For the reasons assigned the judgment of the Court of Appeal is affirmed and is recast as follows:
It is hereby ordered that Latter & Blum, Inc., return to Norman Lind Young the sum of $2,475 deposited in connection with the contract in question.
It is further ordered, adjudged and decreed that there be judgment herein in favor of plaintiff Norman Lind Young and against Mrs. Helen W. Stevens in the sum of $500 as attorneys' fees, with legal interest from date of judicial demand until paid, together with legal interest on the deposit of $2,475 from date of judicial demand until paid, and for all costs of these proceedings.
It is further ordered, adjudged and decreed that this case be remanded to the trial court for further proceedings in connection with Mrs. Stevens' third party petition against Mrs. Gresham, and for a determination of such additional issues as the nature of the case may require.
PIAMITER, J., dissents with written reasons.