Beck v. Staats

Epperson, C.

In July, 1905, the parties hereto entered into a written contract wherein the defendant agreed to convey to plaintiff 80 acres of land in Saunders county on the 1st day of March, 1906. Plaintiff paid $100 in cash and agreed to assume $2,000 of an incumbrance and to pay a remainder of $2,460 upon maturity of the contract. When the contract was made, defendant owned but an undivided one-half interest in the land in controversy. He and one Harmon owned in equal shares this land and 80 acres adjoining it. In February, 1906, defendant sold and conveyed all of his interest in the land to Harmon. This action was brought to recover damages for the loss of plaintiff’s bargain. She obtained judgment in the court below for $1,105.90, and defendant appeals.

Defendant contends that before the contract was executed he had his co-owner’s verbal promise to convey his interest to defendant; that the contract was made upon the condition that Harmon would convey, but thereafter he refused, though defendant in good faith importuned him so to do. Evidence was introduced in support of this contention. In conflict therewith, plaintiff’s evidence is to the effect that defendant represented to her that he had procured Harmon’s interest in the land. It is the defendant’s theory that the rule for the recovery of damages against a vendor acting in good faith is that nominal damages only may he recovered, together with the amount deposited, with interest. He aslted for and was refused an instruction submitting this theory to the jury. We are met at the threshold of this investigation with a conflict in the decisions of this court. In Reed v. Beardsley, 6 Neb. 493, it was held: “On an agreement to exchange lands, if one of the parties performs the contract on his part by conveying, and the other neglects to do so, and finally puts it out of his power to perform, the true measure of damages is the value of the property conveyed.” The measure of damages there was the value of the consideration given by the vendee, and not the value of the property he contracted to purchase. To the same effect is McPherson v. Wiswell, 19 Neb. 117. And in Eaton v. Redick, 1 Neb. 305, the vendee, upon rescission by his vendor, was permitted to recover the amount advanced by him upon the purchase price, although himself in default. These cases have never been expressly overruled; but, in view of the decisions following the contrary rule, they cannot be said to establish the law in this jurisdiction. In Wasson v. Palmer, 13 Neb. 376, it was Said: “The proper measure of damages was the difference between the contract price and the actual value of the property at the time the contract was broken.” There the question of good faith on the part of the grantor was no part of the case and was not considered by the court. The same rule prevailed in Carver v. Taylor, 35 Neb. 429; Seaver v. Hall, 50 Neb. 878; Nolde v. Gray, 73 Neb. 373. In Seaver v. Hall, supra, after reviewing the former decisions of this court, it is said by Mr. Commissioner Irvine: “It would appear that this court has thereby placed itself on both sides of the much disputed question as to whether, when the vendor cannot make title, only nominal damages can he recovered, or whether the vendee is entitled to the benefit of his bargain. Some cases hold that the former rule applies where the vendor acted in good faith (Conger v. Weaver, 20 N. Y. 140), and that the latter applies when the vendor was guilty of fraud (Pumpelly v. Phelps, 40 N. Y. 59). * * * It may well be doubted, however, whether, in a state where exemplary damages are not permitted, the measure of recovery should depend on the good faith of the vendor. The object of the hiw is to afford compensation, and not to punish, in civil cases, and the actual damage is the same regardless of the motive of the vendor.” In Violet v. Rose, 39 Neb. 661, it was held that a vendee Avas entitled to recover damages caused by delay of his vendor in making the conveyance, and the measure of damages was the difference bctAveen the value of the property when it should have been conveyed and its value at the time of the delayed conveyance. For a wilful refusal to convey, a vendor, in McMurtry v. Blake, 45 Neb. 213, was held liable to the full extent of his vendee’s lost opportunity .to sell to advantage.

Defendant relies upon Flureau v. Thornhill, 2 Wm. Bl. (Eng.) *1078, and the decisions of the American courts in accord therewith. It was there held that, on a contract for the purchase of real estate, if the title proves bad, and the vendor is without fraud unable to make a good one, the purchaser is not entitled to damages for the loss of his bargain. Eelative to the contract, Blackstone, J., ' said: “These contracts are merely upon condition, frequently expressed, but always implied, that the vendor1 has a good title.” In Hopkins v. Grazebrook, 6 B. & C. (Eng.) *31, the vendor, at the time he contracted to sell, had substantially no estate, and the conditions of sale provided for a good title. It was held that the vendee could recover for the loss of his bargain. Such recovery Avas alloAved also in Robinson v. Harman, 1 Exch. (Eng.) *850, Arherein it appears that the defendant had agreed to grant a valid lease, when he well knew that he had no power to do so. .In Engel v. Fitch, 3 L. R. Q. B. (Eng.) 314, s. c. 4 L. R. Q. B. (Eng.) 659, damages were allowed because the defendant failed to take the necessary steps, which he could have taken, to put his vendee in possession. In Bain v. Fothergill, 7 H. L. Rep. (Eng.) 158 (see Sedgwick, Leading Oases on Measure of Damages, 45), Flureau v. Thornhill was adhered to and subsequent cases reviewed. It was there said that Flureau v. Thornhill, must be taken to be without exception. The value of the English rule, however, is. weakened somewhat by the language of Mr. Baron Pollock in Bain v. Fothergill, supra. He there adheres to the rule of Flureau v. Thornhill, but indicates ihat the doctrine of stare decisis should govern such con- ; racts. He says: “All that has been hitherto said leads to the conclusion that the case of Flureau v. Thornhill was rightly decided, at the time it was decided, on sufficient iegal principles, but if it was a decision to which at the time I could not have acceded, I should, nevertheless, Hi ink that a contract of purchase and sale of real property made at this day must be construed to be made on the footing of that decision being correct. All persons who prepare such contracts know of that decision, and that it lias been acquiesced in and acted on for a hundred years. The contracts which such persons prepare are, therefore, made with the understanding that, upon failure to make out a satisfactory title, the rule as to damages enunciated in that case will be applied. Then such rule is by intention and understanding of the parties a part of the contract.” The great weight of authority in this country is less liberal to the grantor, and holds him liable, not for mere nominal damages, but for his grantee’s loss of profits, or, as commonly stated, his loss of the bargain. “In some jurisdictions there is no deviation from this rule on account of good faith and inability to perform resulting from an unsuspected defect in the vendor’s title; there the symmetry of the law relating to sales is preserved.” 2 Sutherland, Damages (3d ed.), sec. 579. Good faith on the part of the vendor was held in Matheny v. Stewart, 108 Mo. 73, not to excuse or protect him. In Hammond v. Hannin, 21 Mich. 374, it was said: “If a party enters into a contract to sell, knowing that he cannot make a title, he is remitted to his general liability, and the exception introduced by Flureau v. Thornhill does not apply. So if a person undertakes' that a third party shall convey, and is unable to fulfil his contract, the authorities are that he shall pay full damages. * * * The cases before referred to, in which a party undertook to sell that which he did not own, and knew he could not control, may also, when the other party is hot informed of the defect, be considered as involving a degree of bad faith, and have generally been so regarded by the courts.” In Pumpelly v. Phelps, 40 N. Y. 59, it is said: “The rule that a vendor, who contracts to sell and convey real property in good faith, believing that he has a good title, and on discovering it to he defective, for that reason, refuses or is unable to fulfil his contract, is, in an action against him by the vendee for the breach, liable for only nominal damages, should not be in any degree extended, hut strictly limited to those cases coming wholly and exactly within it. And where a vendor contracts to sell lands, in which he knows, at the time, he has not title or the power of conveyance, he is bound to make good to the vendee the loss of the bargain through his default. Nor, in such case, does it excuse the vendor that he acted in good faith, and believed, when he entered into the contract, that he should be able to procure a good title for his purchaser.” In Doherty v. Dolan, 65 Me. 87, it was held: “This rule of damages is not to be varied, because the defendant, through unanticipated causes which he could not control, although acting in good faith, was unable to convey.” 2 Sutherland, Damages (3d ed.), sec. 581. See, also, Vallentyne v. Immigration Land Co., 95 Minn. 195; Arentsen v. Moreland, 122 Wis. 167, 65 L. R. A. 973; Flecten v. Spicer, 63 Minn. 454; 2 Warvelle, Vendors (2d ed.), sec. 936.

Where it is possible, and the wronged party demands it, equity will require a performance of the contract. And where a party by his contract undertakes to convey property and is rendered unable, or refuses to do so, the law will require him to respond in full compensatory damages, and it makes no difference whether he wilfully disregards his contract, or is prevented through no fault of his own from conveying the title called for by his contract. His liability is created by the contract. He agrees to convey. The contract is necessarily reciprocal. Is there any reason in law or in equity for relieving a grantor because he is disappointed in not obtaining title, any more than there could be for relieving a grantee because he had failed, through no fault of his own, in obtaining the purchase price at the appointed time? It was the duty of the defendant and his privilege to provide in his contract against obstacles, and, if he undertakes without this precaution to convey title belonging to another, he does so at his peril. Any other rule would permit one to speculate in reference to the property of another without incurring any liability on his own part, but at the same time bind his grantee irrevocably. The real issue of fact in the case at bar is whether the parties hereto made their contract contingent upon defendant's obtaining the outstanding title. This issue was submitted to the jury under proper instructions. Defendant's theory was not sound in law, nor supported by competent evidence, and the court properly overruled his request for the instruction.

The contract provided for the conveyance of the land with all the improvements placed thereon prior to the making of a certain lease. Plaintiff's evidence of value was given with reference to the land as it stood at the maturity of the contract. Defendant assigns error in the admission of this evidence, because it failed to exclude the improvements made by the tenant. The contract failed to specify the improvements not conveyed. By his answer, defendant alleged that there were certain improvements made by the tenant, who was authorized to remove the same. The evidence discloses that this tenant had removed prior to the maturity of plaintiff’s -contract. Presumably tbe improvements bad been removed and were not considered by tbe witnesses wbo testified as to tbe value. If sucb was not tbe case, it was tbe duty of tbe defendant to prove tbe continued presence of the improvements. In this be failed, but met tbe issue tendered, and himself introduced evidence as to value without reference to the excepted improvements.

Defendant requested tbe court to order the jury to view tbe premises. This tbe court refused to do, for reasons expressed in bis own words as follows: “Tbe court doubts somewhat tbe matter of sending the jury out of tbe county and judicial district. For this reason, it being a discretionary matter with the court, the request will be refused.” Section 284 of tbe code provides for a view by tbe jury of property which is tbe subject of litigation, or of the place in which any material fact occurred, whenever in tbe opinion of tbe court it is proper. There is a conflict of authorities upon this question. Some courts bold that a jury may not be sent beyond tbe territorial jurisdiction of the court, unless expressly authorized by statute. Rockford, R. I. & St. L. R. Co. v. Coppinger, 66 Ill. 510. But a fair interpretation of our statute convinces us that a different rule should obtain here, and that a trial court in its discretion may sénd tbe jury to view any property within tbe state. Section 1119 of tbe California penal code authorizes the superior court, in the exercise of a sound discretion, to cause a view to be taken by tbe jury of tbe place where tbe offense was charged to have been committed, or in which any other material fact occurred. This was held, in People v. Busle, 71 Cal. 602, to authorize a view in any county in tbe state. Section 7283 of the Ohio Rev. St. has provisions identical with our own, and it was held in Jones v. State, 51 Ohio St. 331, that a jury may be sent to any place where a material fact occurred, if within the jurisdiction of tbe state. We are of tbe opinion that the court bad the power to send the jury to view tbe premises in controversy, but it does not necessarily follow that his refusal to do so was error. The granting of such an order is by .statute made discretionary, and it is only where an abuse of such discretion appears that this court will reverse a judgment. The only reason for such an order would be to enable the jury the better to understand the evidence; and in the case at barj where the issue of fact is confined to the value of the land, we cannot see wherein the jury would have been enlightened by a view of the premises.

For the reasons given above, we recommend that Reed v. Beardsley, 6 Neb. 493, so far as it relates to the measure of damages, and those cases following the same rule, be overruled, and that the judgment of the district court be affirmed.

Duffie and Good, GO., concur.

By the Court: for the reasons stated in the foregoing-opinion, the judgment of the district court is

Affirmed.

Case Details

Case Name: Beck v. Staats

Court Name: Nebraska Supreme Court

Date Published: Jan 8, 1908

Citation: 80 Neb. 482

Docket Number: No. 14,972

Court Abbreviation: Neb.