Conley v. Davidson.

• Decision Date: 12 September 1930
• Docket Number: No. 3475.,3475.
• Citation: 291 P. 489,35 N.M. 173
• Parties: CONLEYv.DAVIDSON.
• Court: New Mexico Supreme Court

35 N.M. 173

291 P. 489

CONLEY

v.DAVIDSON.

No. 3475.

Supreme Court of New Mexico.

Sept. 12, 1930.

Syllabus by the Court.

Statute requiring husband and wife to join in conveyances affecting community realty is inapplicable in suit for breach of husband's executory contract to exchange (Comp. St. 1929, § 68-403).

Section 68-403, Comp. 1929, which provides that the husband and wife must join in all deeds and mortgages affecting community real estate and that transfers or conveyances thereof attempted to be made by either husband or wife alone shall be void and of no effect, has no application in a suit for damages resulting from breach of husband's executory contract to trade or exchange community real estate.

Good-faith rule for measuring damages for breach of executory contract to convey realty requires good faith in entering contract.

The good-faith rule for measuring damages resulting from breach of executory contract to transfer real estate requires good faith in entering into the contract as well as thereafter.

Trial court's fact findings, supported by substantial evidence, will not be disturbed on appeal.

Findings of fact supported by substantial evidence will not be disturbed on appeal.

Rule permitting prevailing party to present to Supreme Court error against him held inapplicable where appellee's judgment is affirmed (Rules of Appellate Procedure, rule 15, § 2).

Section 2 of rule 15 of the Rules of Appellate Procedure, permitting the prevailing party to preserve and present to this court error against him, if its effect is to save an erroneous judgment in his favor or to entitle him to a new trial if his judgment is reversed, has no application in a case where appellee's judgment is not erroneous, but is affirmed.

Appeal from District Court, Chaves County; Richardson, Judge.

Action by H. C. Conley against H. H. Davidson. Judgment for plaintiff, and defendant appeals.

Affirmed, and cause remanded.

The good-faith rule for measuring damages resulting from breach of executory contract to transfer real estate requires good faith in entering into the contract as well as thereafter.

See, also, 283 P. 52.

Reid, Hervey, Dow & Hill, of Roswell, for appellant.

O. E. Little, of Roswell, for appellee.

CATRON, J.

From a judgment awarding plaintiff damages, resulting from breach of contract by defendant, appeal is taken.

Appellant and appellee entered into a written contract for the trade or exchange of real estate. The contract prescribed the basis of the trade, provided for furnishing abstracts showing good and merchantable title, giving possession, and delivering deeds. The property sought to be traded by appellant was community property. He executed and tendered a deed to appellee, which appellee would not accept because appellant's wife had not joined in its execution. Both appellant and appellee endeavored to induce appellant's wife to execute the deed and consummate the contract, but to no avail. Thereupon appellee sued appellant for breach of contract and was awarded damages in the sum of $2,716.25.

[1] 1. Appellant contends that the contract of exchange, involving community property of appellant and his wife, is void and of no effect, and relies upon section 68-403, Comp. 1929, which is as follows: “The husband has the management and control of the personal property of the community, and during coverture the husband shall have the sole power of disposition of the personal property of the community, other than testamentary, as he has of his separate estate; but the husband and wife must join in all deeds and mortgages affecting real estate; Provided, that either husband or wife may convey or mortgage separate property without the other joining in such conveyance or mortgage; and, Provided, further, that any transfer or conveyance attempted to be made of the real property of the community by either husband or wife alone shall be void and of no effect, except, that the husband may convey directly to the wife or the wife to the husband without the other joining in the conveyance.”

The foregoing statute provides that the husband and wife must join in all deeds and mortgages affecting community real estate, and that transfers or conveyances thereof attempted to be made by either husband or wife alone shall be void and of no effect.

The contract in the present case is neither a deed nor a mortgage, nor does it attempt to transfer or convey real estate. It is an executory contract by the husband alone, whereby he binds himself to do certain things. Manifestly the statute can have no application to the contract, unless it be in a case involving specific performance thereof.

But appellant cites Adams v. Blumenshine 27 N. M. 643, 204 P. 66, 20 A. L. R. 369, as supporting his contention. The foregoing case had for its object specific performance of the husband's contract to sell and convey community real estate. On page 650 of 27 N. M., 204 P. 66, 68, we held: “If the premises were community property, then it became necessary for both husband and wife to join in any deed conveying the same under the provisions of chapter 84, Laws 1915, and any transfer or conveyance of the same attempted to be made by the husband alone was void and of no effect. If a transfer or conveyance of the property by these husbands without their wives joining would be void and of no effect, then a contract to make such a transfer or conveyance would likewise be void and of no effect, at least so far as specific performance of the contract is concerned.”

Based upon the foregoing, appellant apparently contends that, if a deed in the present case executed by the appellant alone would be void and of no effect, then the contract to make such deed would likewise be void and of no effect.

There is no merit in this contention, for the present suit is for damages resulting from a breach of contract and not for specific performance thereof. This distinction was suggested in the Adams Case.

[2] 2. Appellant argues that, because he acted in good faith and honestly endeavored to carry out his contract, the inability to do so not resulting from any fault of his but solely by reason of the refusal of his wife to execute the deed and thereby consummate the contract, he is liable only for damages in the amount of the purchase money paid, interest thereon, and necessary expenses incurred by appellee. This is generally known as the good-faith rule. 27 R. C. L. 633, § 390.

If this contention be correct, then, no purchase money having been paid, appellant's only liability for breach of his contract would be the necessary expenses incurred by appellee, which the record discloses would not exceed $10.

The general rule is that the purchaser is entitled, as general damages for the refusal or inability of the vendor to convey, to recover the difference between the actual value of the land and the agreed price to be paid therefor. This is generally known as the loss of bargain rule. 27 R. C. L. 631, § 388. This rule when applied to contracts for exchange of land where neither party has conveyed is stated as follows: Plaintiff is permitted to recover the difference between the value of the land which he was to convey and that which he was to receive. This is the rule adopted by the trial court in determining the damages awarded.

Appellant does not contend that under the good-faith rule he is absolved of all damages, but he does contend that the wrong measure of damages was used and thereby a nominal damage of $10 was raised to $2,716.25.

That the authorities are much in conflict as to the good-faith rule and the application thereof is apparent from reading the case of Crenshaw v. Williams, 191 Ky. 559, 231 S. W. 45, and the exhaustive note thereto, 48 A. L. R. 5-12, et. seq. See,...