Horning v. Ferguson.

• Decision Date: 08 April 1947
• Docket Number: No. 472.,472.
• Parties: HORNING v. FERGUSON.
• Court: D.C. Court of Appeals

52 A.2d 116

HORNING

v.FERGUSON.

No. 472.

Municipal Court of Appeals for the District of Columbia.

March 7, 1947.

Rehearing Denied April 8, 1947.

Appeal from The Municipal Court for the District of Columbia, Civil Division.

Action by Courtland D. Ferguson against George D. Horning, Jr., to recover damages arising out of a contract for the sale of real property. Judgment for plaintiff and defendant appeals.

Reversed with instructions.

R. H. Yeatman, of Washington, D. C., for appellant.

George E. Sullivan, of Washington, D. C. (Donald M. Sullivan, of Washington, D. C., on the brief), for appellee.

Before CAYTON, Chief Judge, and HOOD and CLAGETT, Associate Judges.

CLAGETT, Associate Judge.

This is an action brought by appellee, plaintiff below, against appellant arising out of a contract for the sale of defendant's former residence in Kenwood, Montgomery County, Maryland. The controversy involves a narrow strip of land which defendant did not own but which plaintiff claims was represented to him as being part of the property. The trial court, sitting without a jury, awarded plaintiff damages of $2,500. Defendant appeals.

At the time of the sale to plaintiff, defendant owned a lot having a frontage of 150 feet and a depth of over 135 feet, improved by a large house landscaped in terraces and planted with trees and shrubbery. Subsequent to his original purchase of this property, defendant had contracted to purchase a strip of land 30 feet wide adjoining the west boundary of his property, and had built on the strip a lily pool and other landscaping improvements, including a flagstone walk connecting the strip with the main lot and also shrubbery which bordered the strip in such a way as to indicate to an average person that the strip was a part of defendant's lot. Defendant later obtained a release from his contract to buy the small strip, but he was permitted to retain its use together with the lily pool, landscaping and shrubbery.

In 1942 defendant, desirous of selling the property because he was on sea duty with the United States Navy and because his family was reluctant to stay in the house alone, instructed one Lebling, a real estate agent, to offer the property for sale. The agent obtained the exact dimensions and other information concerning defendant's property from the land records of Montgomery County, Maryland, and placed an advertisement in a newspaper, including a photograph of the residence.

Plaintiff, in response to the advertisement, was shown the property by the agent, who, believing his statement to be true, represented to the plaintiff by reference to some poles and the shrubbery that the 30-foot strip was included in the property offered for sale. At the same time he also informed the plaintiff of the correct measurements and acreage of defendant's property.

Relying on the agent's representations, plaintiff on September 23, 1942, entered into a contract, in Maryland, to buy the property for $33,500, making a $1,000 deposit to be held by the agent as part of a $3,000 cash payment to be paid on or before the settlement date, November 23. Defendant and his wife ratified the contract in Maryland on September 24. At the time, plaintiff had a lease running until June 1943 on his then residence, but after signing the purchase agreement he made an arrangement on October 8 with the owner of the leased premises under which his lease was cancelled effective December 1 and that property was leased to another person. In addition, prior to discovering that defendant did not own the 30-foot strip, plaintiff, with the consent of defendant, did some redecorating in the Kenwood house, which had been theretofore vacated by the defendant.

Being uncertain as to the location of the property line in the rear of the lot, plaintiff employed a surveyor, and on November 17 or 18 he learned, as a result of this survey, that the 30-foot strip was not included in the lot as described in the purchase contract. On November 18, after learning the true facts, he paid the balance of the cash payment of $3,000 to the title company with instructions to the latter to retain the entire cash payment until the controversy regarding the 30-foot strip had been settled. On the following day plaintiff demanded of defendant an adjustment on the purchase price for failure to convey the 30-foot strip. Defendant refused to make any adjustment on the price but offered to release plaintiff from any obligation to carry out the contract, to return the cash payment of $3,000, as well as to pay the agent's commission. On November 24 (the day after the closing date set by the contract) defendant renewed his offer to release plaintiff, but in the meantime the latter had on November 21 executed two deeds of trust to the property and otherwise complied with the terms of the contract, and the deed signed by defendant and wife dated November 18 and placed in escrow with the title company was delivered to plaintiff. Prior to receiving defendant's letter of November 24, plaintiff moved into the property. Subsequently, in about April 1945, after considerable negotiations plaintiff purchased a strip having a frontage of 36.6 feet, which included the 30-foot strip. He spent $2,500-whether for all of the property bought or for 30 feet thereof the record is not clear. It was this $2,500 which represented the damages awarded plaintiff.

The trial court made written findings of fact and conclusions of law. The court found for the plaintiff on two principal grounds: first, that by his act of omission in failing to instruct his agent as to the true facts of the nonownership of the 30-foot strip, defendant unwittingly set in motion the chain of circumstances by which the agent misrepresented that the 30-foot strip was part of the land to be sold to plaintiff; and, second, that under the doctrine of respondeat superior defendant was liable for the detriment suffered by the plaintiff because of the misrepresentation of the agent. The trial court also concluded that plaintiff had not waived the misrepresentation by proceeding with the contract, since, in the interim, before discovering the truth, plaintiff had not only obligated himself to surrender his home to another but had changed his position by starting to redecorate his new residence. The trial court also included in its conclusions a statement that defendant had ‘acted with the utmost integrity.’

Defendant has assigned three errors: (1) That since plaintiff was furnished by the agent with a complete and accurate legal description of the land to be sold he was put in a position to make his own investigation and hence had no right to rely upon the representations of the agent; (2) that plaintiff by carrying out the terms of the written contract with prior knowledge of the facts elected to affirm the contract and waived any misrepresentation; and (3) that the trial court adopted an erroneous measure of damages.

We have concluded that the trial court ruled correctly on appellant's first point and that this case is governed in this respect by Seek v. Harris, 76 U.S.App.D.C. 404, 132 F.2d 19, rather than by Shappirio v. Goldberg, 20 App.D.C. 185, affirmed 192 U.S. 232, ¹ 24 S.Ct. 259, 48 L.Ed. 419.

With respect to the question of waiver, the principle is well settled that when a contract is wholly executory, if one party learns that the other has been guilty of fraud in the inducement, or as to the subject matter, and in spite of such knowledge insists on...