Eaton v. Trautwein
| Decision Date | 10 October 1941 |
| Citation | 288 Ky. 97 |
| Parties | Eaton et al. v. Trautwein et al. |
| Court | United States State Supreme Court — District of Kentucky |
1. Vendor and Purchaser. — In suit for failure to carry out a contract for the purchase of real estate, vendors could not recover damages for loss of potential profits and good will due to abandonment by purchasers of realty which had for a long time been used for maintenance of a grocery store, since the proper measure of damages was the difference between the contract price and the fair value of property on date of the breach.
2. Vendor and Purchaser. — Damages for loss of potential profits and good will of grocery store which had for a long time been maintained on realty which vendees had contracted to purchase, which damages were sought to be recovered in action for breach of contract to purchase the realty were conjectural or speculative and incapable of accurate measurement and hence not recoverable.
3. Damages. — In order to recover for loss of profits as an element of damage for breach of contract, the party sought to be charged must have had notice, either from the nature of the contract or by some explanation of the circumstances at the time contract was executed, that such probable damage would ensue from a breach.
4. Covenants. — The existence of a private right of way over demised premises at time of conveyance ordinarily constitutes a "breach of covenant against incumbrances," and knowledge by grantee of the existence of such right of way does not protect the grantor.
5. Covenants. — The existence of a public highway or railroad right of way across demised land does not constitute an "incumbrance" within meaning of covenant of warranty, since parties are presumed to have contracted with reference to such incumbrance which is open, visible and notorious.
6. Contracts. — A party to contract may "waive" or relinquish rights to which he is entitled or which have been set up in his favor.
7. Vendor and Purchaser. — A purchaser by his conduct may "waive" the right to set up as a defense to an action by the vendor for damages for breach of contract any particular defense or objection which he might otherwise have.
8. Vendor and Purchaser. — In general, taking possession of realty or continuing in possession thereof or accepting a conveyance or continuing to deal with the property as equitable owner, or without protest making payments on the property after notice of the defect in title, may constitute a "waiver" of the defect in regard to the right to compel a conveyance of all the estate the vendor had agreed to convey.
9. Pleading. — Allegations of reply were admitted by defendants' demurrer thereto.
10. Vendor and Purchaser. — Vendees could not escape liability for breach of contract to purchase realty on ground that vendors could not convey good title free from incumbrances, in compliance with contract, because of existence of a private passway across realty, if vendees, with actual notice of the easement, took possession, and thereafter manifested acts of ownership, including an effort to mortgage the property, such conduct constituting a "waiver" of such defect in title.
11. Vendor and Purchaser. — In suit for breach of contract to purchase realty, wherein vendees sought to avoid liability on ground that vendors could not convey good title free from incumbrances in accordance with contract on account of the existence of a private passway across realty, what acts or declarations on vendees' part would amount to a waiver of defect in title was "a question of law" for the court, and whether such acts or declarations were done or made, or their intended effect, was a question for jury.
Appeal from Jefferson Circuit Court.
James Boswell Young for appellants.
Eugene J. Steuerle for appellees.
Before Eugene Hubbard, Judge.
Reversing.
Appellants, plaintiffs below, on October 3, 1938, proposed to sell to defendants a lot and improvements in Louisville, described as lot No. 2134, 25 x 140 feet, for $5,300, part cash, and the assumption of a loan. They were to convey unencumbered title by general warranty deed, with exception as to some taxes. The contract included certain fixtures and equipment used in the conduct of a grocery. Possession was to be given "ten days after date of deed."
Plaintiffs in petition, filed in March 1939, alleged acceptance of the contract and that following its execution defendants took possession and occupied the premises for three weeks, when they vacated without notice or cause, though plaintiffs were able and ready to perform the contract.
It is further alleged that the property had been for a long time used as a grocery store; that by reason of the abandonment the business of the store had been destroyed, and thus the value of the property damaged to the extent of $1,000; that the store had remained vacant for four months, and since it had earned on an average of $200 per month, plaintiffs had suffered a loss of $800. Other items increased the total alleged damage to about $1,840.
On motion of defendants the court struck from the petition such allegations as related to the loss of good will and trade, lost profits and minor expenditures. Plaintiffs filed amended petition, reiterating former allegations, and plead that because of the acts set forth "in addition to the damages therein alleged, they have been further damaged in the sum of $2,000, the difference between the contract price and the fair market value" of the property immediately after abandonment, and refusal to carry out the contract.
The court overruled demurrer to the amended petition and defendants answered, the first paragraph being by way of denial. In a second paragraph they say that a survey of the lot showed that it extended over the sidewalks of the city on the east, hence plaintiffs could not as a matter of law, convey to them the property embraced in the contract, and that no deed had been tendered. Plaintiffs replying admitted that the lot encroached upon the sidewalk, but that they did not know of the fact until their attention was called to it, when defendants gave them a reasonable time in which to straighten this matter up, and within a short time this defect was cured.
The court overruled demurrer to this reply, and defendants rejoined, denying its allegations, whereupon defendants filed an amended answer charging that defendants with the consent of the plaintiffs "and to fulfill their contract," applied for a loan on the property shortly after the contract was accepted; that they were notified that the loan would not be made because of the alleged encumbrances. They then notified plaintiffs of the encumbrances, and since plaintiffs could not convey good title, they gave them possession of the property.
In this pleading they say that in a deed conveying the lot to their grantors, there was excepted a passway across the rear of the lot, 10 feet in width, reserved for the use of plaintiff's grantors, and that because of this defect plaintiffs could not convey good title.
Affirmative reply to amended answer admitted that the southern 10 feet of the lot, which gave access to a barn and garage, was subject to the rights of use by others, but that defendants had "both actual and constructive knowledge of said easement," and of their own accord, with said knowledge, requested plaintiffs to vacate, and they moved in on November 25, 1938; took and held possession until December 14, when they moved out giving as their reason that the operation of a grocery store was too difficult for Mrs. Trautwein; that this complaint was an afterthought.
The court sustained demurrer to the second paragraph; plaintiffs declining to plead further the court dismissed their petition, and on appeal it is argued by appellant that the court erred in striking from the petition allegations in respect of loss of possible profits, and in sustaining the d...
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