Walls v. Humphries
2013 Ark. 286
Ark.2013Background
- This case involves competing oil-and-gas rights interests in Van Buren County.
- Appellants Walls and Hernandez de la Lama appeal a circuit court summary judgment favoring New Century, Paraelifta, Claughton, and SEECO.
- Appellees argued they were bona fide purchasers without notice of appellants’ unrecorded interests.
- Hernandez had a 1999 real-estate contract sale to the Hermans with mineral rights; the contract was not filed of record.
- Humphries leased the oil-and-gas rights to New Century in 2004 and later conveyed interests to Paraelifta and Claughton in 2004; Walls acquired the property in 2008.
- The circuit court ultimately granted summary judgment, but the appellate court reversed and remanded for factual resolution on possession and notice issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether appellees are bona fide purchasers without notice | Hernandez’s possession gave actual notice of an interest. | Appellees were innocent purchasers; possession does not necessarily negate their notice. | Question of fact on exclusive possession precludes summary judgment. |
| Whether attorneys’ fees were properly awarded | Fees were inappropriate under 16-22-308 because dispute was title-related, not contract breach. | Fees allowed if the dispute arises from breach of contract related to sale of goods or similar matters. | Fees improperly awarded; reversal and remand on fee issue. |
Key Cases Cited
- Hamilton v. Fowlkes, 16 Ark. 340 (Ark. 1855) (possession may trigger notice to purchaser; inquiry duty for purchase)
- Moore v. Oates, 143 Ark. 328 (Ark. 1920) (subsequent purchaser bound to notice of occupancy)
- First Nat’l Bank v. Gray, 168 Ark. 12 (Ark. 1925) (possession puts purchaser on inquiry; constructive notice)
- Scott v. Carnes, 183 Ark. 650 (Ark. 1931) (premise that possession invites inquiry by purchaser)
- Hanners v. Giant Oil Co. of Arkansas, Inc., 373 Ark. 418 (Ark. 2008) (fee award question under contract-based relief; not always allowed)
- Wetzel v. Mortgage Elec. Registration Sys., Inc., 2010 Ark. 242 (Ark. 2010) (recording statute governs validity against subsequent purchasers)