Bremhorst v. Phillips Coal Co.
| Decision Date | 18 January 1927 |
| Docket Number | 37465 |
| Citation | 211 N.W. 898,202 Iowa 1251 |
| Parties | HENRY BREMHORST, Appellee, v. PHILLIPS COAL COMPANY, Appellant |
| Court | Iowa Supreme Court |
[Copyrighted Material Omitted]
Appeal from Wapello District Court.--W. M. WALKER, Judge.
Action at law, to recover damages for the breach of an alleged contract to execute to plaintiff a quitclaim deed for "rights to coal and minerals" underlying a tract of land of which the plaintiff was the surface title holder. The cause was tried to a jury, which returned a verdict of $ 6,407.50, which the court reduced to $ 5,000, for which it entered judgment. Defendant appeals.
Reversed.
F. G Orelup and C. W. Whitmore, for appellant.
Jaques, Tisdale & Jaques, for appellee.
DE GRAFF, J.
This action is for damages predicated on the breach of an alleged contract between plaintiff and defendant. In brief, the plaintiff pleads that it was agreed that the defendant was to execute to plaintiff a quitclaim deed for rights to coal and minerals underlying 27.219 acres of land, located outside the city limits of Ottumwa, Iowa, for a consideration of $ 100, of which $ 50 was paid to the defendant at the time of the agreement, and that, then and there, the defendant signed the following written instrument, known in the record as Exhibit G, to wit:
The defendant, in answer, denied that any contract was entered into between the parties, as alleged and claimed by the plaintiff, and asserted that the plaintiff proposed to pay $ 100 to defendant for a quitclaim deed covering the rights to coal in that portion of his land from which the coal had been mined; and that the receipt for the $ 50 was given with the understanding that a definite contract, to be represented by a quitclaim deed, should be prepared by the plaintiff, which should describe the land according to such understanding. It is further alleged, in answer, that, upon receipt of the plaintiff's draft of the quitclaim deed, it was discovered by the defendant that the said deed called for coal which had not been mined out; that thereupon the defendant tendered back the $ 50 to plaintiff, which tender the defendant kept good; that the defendant relied upon the oral assurance of plaintiff that all he desired for the $ 100 was a quitclaim deed for mining rights in land lying along the north road, running "east and west from the Center School House, and under which the coal had been mined out;" that the consideration was nominal, and would not apply to any land having coal under it; and that, "either by mistake, fraud, or error, plaintiff misled the defendant as to the true location of his land."
It is undisputed that plaintiff is the title holder in fee of the land in question by deed of May 3, 1915, "except all coal, mining and other rights now owned by the Phillips Fuel Company," obtained under deed dated November 11, 1905, from Ellen Armstrong, trustee of Elizabeth Hale, who died in 1901; that the land is subject to a certain easement acquired by the defendant by duly recorded deed, March 9, 1911, through its predecessor, the Phillips Fuel Company; that defendant became the owner of the right to mine coal under said land, which right was dominant to plaintiff's land, as evidenced by the recorded deed; that the title to a part of plaintiff's land is also subservient to a recorded coal lease, known as the Erskine lease, which the defendant had executed, July 6, 1914. It is shown that the defendant was the owner of the right or easement of vertical support, in that the grantor, in deed of March 9, 1911, had sold the right of waiver of damages from the surface owners for any damages to the surface caused by the removal of coal.
Much of the complaint in the record with regard to the rulings of the trial court in the admission of evidence and the instructions given and refused arises from the failure to differentiate a receipt from a contract, as applied to the writing Exhibit G, and also the failure of the court to recognize the right of vertical support in the defendant. Of these matters we will speak later.
The material question on this appeal involves the rule or measure of damage to which the plaintiff is entitled by reason of the alleged breach of contract to execute the deed. It is clear that the subject-matter of the alleged contract refers to an interest in and concerning real estate; but part payment of the purchase price on an oral contract takes the contract out of the statute of frauds. Section 11286. Code of 1924; Sykes v. Bates, 26 Iowa 521; Chamberlin v. Robertson, 31 Iowa 408. We are not concerned, therefore, with the rule that the statute of frauds must be invoked either by plea or by objection made at the time of the introduction of the evidence. Gilman v. McDaniels, 177 Iowa 76, 158 N.W. 459; Kerr v. Yager, 158 Iowa 69, 138 N.W. 905; In re Assignment of Snyder, 138 Iowa 553, 114 N.W. 615; Holt v. Brown & Co., 63 Iowa 319, 19 N.W. 235.
The pleaded contract involved only a quitclaim to plaintiff of the "right to coal and minerals." We cannot adopt as the theory of this case that the execution of the quitclaim would have restored to plaintiff the land in the condition in which nature left it. A quitclaim deed merely conveys whatever title the grantor may have, and any implication that he has a good title or any title whatsoever is excluded. It contains no warranty of title. 2 Tiffany on Real Property (2d Ed.) 1692, Section 453.
I. What is the measure of damage, under the facts, for a failure to execute a quitclaim deed by the promisor? The term "damages" in general means the pecuniary compensation or indemnity which the law awards to an injured party for the breach of a contract or a duty. The term involves the idea of a loss that must be made good, and that the party injured shall be put in as good condition as he would have been if the injury had not been inflicted. 3 Elliott on Contracts, Section 2120 et seq.
The general principle in all actions for breach of contract is that the verdict must give the plaintiff, in damages, the difference between what he would have had, if the contract had been performed, and what he actually has received. The result reached is that the damages should be such as may fairly and reasonably be considered, either arising proximately and naturally,--that is, according to the usual course of things,--from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract, as the probable and proximate result of the breach. Hadley v. Baxendale, 9 Exch. 341; Griffith v. Burden, 35 Iowa 138, loc. cit. page 144.
The trial court instructed, in substance, that the measure of damages is the difference in value of the land with the coal and mining rights existing against it as an incumbrance or easement, and the value of the land without such incumbrance. This was error.
To obtain the proper perspective in this case, it is essential to understand the historical sequence of the title to the land in question. Elizabeth Hale, through her trustee, as the owner of the unit of title, created a severance of the fee to surface rights, mineral rights, and right of vertical support. We may think of her as the erstwhile owner of the three fees now in question: that is, (1) to the surface, (2) to coal, and (3) to vertical support.
Let us suppose that the instant action was prosecuted by Elizabeth Hale. Let us further suppose that, in 1919, the defendant made a valid contract that, in consideration of $ 100, he would execute back to her a quitclaim deed for the "right to coal and minerals," and had failed to do so. What claim for damages would she have against the defendant? It would have been a sufficient answer on the part of the defendant, under the record facts, in a suit by her for damages, to say that, under a quitclaim deed:
"First, you are not entitled to the value of the coal mined out by me under the north 13 of your 28 acres; second, you are not entitled to the value of the coal under the south 8 1/2 acres now held under lease from me to the Erskines; and third, you are not entitled to the fee for vertical support or for prospective damage to any part of the 28 acres, because, in 1905, for a consideration, you conveyed the coal and mineral rights under 160 acres of land owned by you, including this 28-acre tract, and at that time you sold and conveyed the third fee for vertical support, as well as the second fee to coal rights under all the land."
This would have constituted a complete answer, and a true statement of fact. Elizabeth Hale had received one compensation for damages for both the right of vertical support and the coal, and, having once been fully paid, neither she nor her successor in title could, in justice or in law, demand a second compensation for the same thing.
It is true that, where the owner of a fee conveys rights to coal and minerals, he impliedly reserves the right to vertical support notwithstanding; but, if these fees are severed and separated, a different situation presents itself. A grant of coal and mineral rights does not include implied severance of the right to vertical support. Mickle & Co. v. Douglas, 75 Iowa 78, 39 N.W. 198; Collins v. Gleason Coal Co., 140 Iowa 114, 115 N.W. 497.
Under the instant circumstances, plaintiff had no right to look to the defendant to restore the value of...
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