Miller v. Schwinn

• Decision Date: 24 June 1940
• Docket Number: No. 7409.,7409.
• Parties: MILLER v. SCHWINN, Inc.
• Court: U.S. Court of Appeals — District of Columbia Circuit

72 App. DC 282, 113 F.2d 748 (1940)

MILLER v. SCHWINN, Inc.

No. 7409.

United States Court of Appeals for the District of Columbia.

Decided June 24, 1940.

Milton Strasburger and David Hornstein, both of Washington, D. C., for appellant.

Joseph T. Sherier, of Washington, D. C., for appellee.

Before STEPHENS, MILLER, and VINSON, Associate Justices.

VINSON, Associate Justice.

The plaintiff, appellant here, brought an action in the District Court on two contracts relating to exchange of certain real properties, alleging breach thereof by the defendant, appellee here. On answer by the defendant that the plaintiff himself could not have performed, and trial of the issues, the court directed a verdict for the defendant. From that action the plaintiff here appeals.

Disposition of the appeal requires consideration of certain provisions of the contracts and conduct of the parties in reference thereto. The first contract was entered into on June 5, 1936, and provided in part:

"(1) That the plaintiff * * * shall convey * * * unto the defendant * * * by deed with special warranty, free and clear of encumbrance, all that parcel of land situate in Montgomery County, Maryland, shown as parcel `C'. * * *

"(2) That the defendant * * * shall convey or cause to be conveyed, unto the said plaintiff * * * by deed with special warranty, certain parcels of land in the District of Columbia, encumbered by certain deeds of trust, and $850 in cash. * * *

"(4) That the respective parties hereto, in order to indemnify each other against loss as a result of the breach of the contract of exchange herein entered into, agree that in the event either of the respective parties hereto shall fail to comply with the terms of this contract then in that event the defaulting party shall pay to the party aggrieved the sum of Five Thousand Dollars ($5000) liquidated damages. * *

"(5) That the title to each property shall be good of record and in fact, subject only to * * * encumbrances herein mentioned, if any. Should either title, upon examination, be found defective this agreement shall, at the option of the vendee of such property, be and become null and void, but neither party hereto shall be liable to the other for any damage by reason of such defective title, and they hereby accordingly release each other from any such liability.

"(8) That the plaintiff * * * guarantees that the land to be conveyed by him is zoned for apartment purposes and that he will put in suitable and sufficient sewer and water services for the property at his own expense before date of settlement."

The plaintiff arranged to secure sewer and water service for parcel C as required by the contract but, in so doing, perpetually and irrevocably dedicated (June 15, 1936) to Washington Suburban Sanitation Commission of Maryland, a strip of land six feet wide entirely across one side thereof (201.7 ft.) for installation and maintenance of a sewer designed to serve other property as well as parcel C (referred to herein as the dedication). No actual notice of this dedication was given to the defendant.

When time came for consummation of the exchange contract, August 15, 1936, the defendant stated it was unable to perform. Thereafter, a supplemental contract was entered into August 31, 1936, whereby: "The day and date of the * * * contract of June 5th, 1936, is hereby extended from August 15, 1936 to October 16th, 1936. (2) In consideration of said extension as aforesaid, the defendant * * * agrees to pay to the plaintiff * * * the sum of Two Thousand Five Hundred Dollars * * *". Shortly before this extended performance date, the defendant again stated it could not perform, because title to its own property was involved in another transaction.

Thereupon, after demand made and refused, the plaintiff brought this action to recover $5,000 for liquidated damages under the first contract and for $2,500 damages for breach of the extension contract. Institution of this action informed the defendant for the first time that the plaintiff had made the dedication to the Commission. On the basis of this information it answered that the plaintiff could not have conveyed parcel C free from encumbrances as required by the contract and hence was not entitled to recover. With this the District Court agreed.

In challenging the action of the District Court in directing a verdict against him, the plaintiff advances two propositions. First he contends that the defendant is precluded from asserting as a defense that the plaintiff had put it out of his power to convey parcel C free from encumbrances since it, at the time of the breach, assigned only inability on its own part as reason for non-performance. In this contention there is no merit. The plaintiff's irrevocable dedication preceded by a considerable interval both statements by the defendant, hence the latter events cannot be said to have induced the former. Nor can it be said that the defendant was under a duty to complain of the dedication prior to the performance dates of the two contracts in view of the unchallenged finding of the District Court that it did not learn of the same until institution of this action.¹ Under these circumstances neither repudiation of the contracts nor silence respecting the dedication can work an estoppel against assertion as a defense to this action that the plaintiff could not have fulfilled a vital condition of the contract, conveyance of parcel C free from encumbrance. "If the promisee plaintiff could not or would not have performed the condition in any event, the manifestation of unwillingness or inability of the promisor defendant to perform will not give rise to a cause of action because the promisee plaintiff cannot allege and prove that he would have become entitled to receive performance by complying with the condition, had it not been for the promisor's defendant's misconduct." Williston on Contracts, 3rd Ed. § 698A.²

We come then to the plaintiff's second contention — that the dedication did not violate his undertaking to convey the same free from encumbrance.

An encumbrance has been defined as "every right to, or interest in the land granted, to the diminution of the value of the land, but consistent with the passing of the fee of it by the conveyance". Prescott v. Trueman, 4 Mass. 627, 629, 3 Am.Dec. 246. The plaintiff's dedication of the six foot strip across one side of parcel C to the Commission gave the latter perpetual and absolute authority to install, repair and replace therein a sewer to provide service for other property as well as parcel C. Existence of an easement of this character is regarded by the great weight of authority as contravening a covenant against encumbrances.³

The plaintiff argues, however, that the contracts in the instant case indicate that the parties did not intend that the dedication should be regarded as violative of his undertaking to convey free from encumbrance. He points out that the main contract of June 5, 1936, required him to "put in suitable and sufficient sewer and water services" for parcel C; that this property lay within the jurisdiction of the Washington Suburban Sanitation Commission of Maryland and any plan for sewer installation was subject to its approval; that the plan recommended by the Commission's Chief Engineer, requiring the dedication, represented the least expensive and therefore most desirable method for making sewer service available to parcel C and other property in that vicinity; and that as the only plan considered, it was approved by the Commission and acted on. From all this, the plaintiff argues that the provision in the contract requiring him to put in sewer facilities must be regarded as excepting the dedication incident thereto from categorization as an encumbrance.

The contention is plausible but not persuasive. Alternative methods for providing parcel C with sewer facilities, not requiring dedication of a portion thereof, were not explored by the Commission or its Engineer; apparently, because of the fact that the plaintiff, indicating principal interest in securing sewer facilities for another nearby property also owned by him, did not object to dedication of a portion of parcel C in order to achieve that end, and, further, the prospect that other plans would have involved greater expense. It appears from the record, and in ruling against the plaintiff the District Court implicitly found, that it would have been feasible to furnish parcel C sewer facilities without dedication of a portion thereof for a main or common sewer line.⁴ Although such a plan would have involved greater expense, the plaintiff was required by the contract to provide such facilities "at his own expense", not at the expense of parcel C. These considerations, and the fact the defendant was informed at no time during the negotiations that a dedication would be made, make it clear that the requirement of the plaintiff to furnish parcel C sewer facilities cannot be regarded as indicating an intention to create an exception to the undertaking to convey free from encumbrances.

In further support of his contention that the dedication is not to be regarded as an encumbrance, the plaintiff makes another argument predicated on the fact that parcel C was subject to a zoning regulation prohibiting building within eight feet of the boundary of the property.⁵ It is argued that dedication of six feet of this strip to the Commission for sewerage purposes deprived the defendant of nothing. Ownership subject to an easement for light and air is obviously something different from ownership subject to an additional easement for installation, repair and replacement of a sewer line serving several properties. Moreover, the zoning regulation does not represent a permanent prohibition against building to the same extent as the irrevocable dedication. Not inconsistent with testimony in the record regarding the nature of the zoning regulation is the possibility...