Millman v. Swan

• Decision Date: 19 March 1925
• Citation: 141 Va. 312
• Court: Virginia Supreme Court
• Parties: J. M. MILLMAN v. J. A. SWAN, JR.

Page 312

141 Va. 312

J. M. MILLMAN v. J. A. SWAN, JR.

Supreme Court of Virginia, Richmond.

March 19, 1925.

Case submitted for decision before Judge Kelly qualified.

1. VENDOR AND PURCHASER — Abatement of Purchase Price — Deficiency in Acreage — Mistake as to Fire Limits. — The principle that a vendee is entitled to an abatement of the purchase price, where there is a deficiency in acreage or loss of a part of the acreage contracted for by title paramount, has no application to a case in which the purchaser is asking an abatement of the purchase price because the subject of the sale was within the fire limits of a town and not without them as represented by the vendor and his agent.

2. SPECIFIC PERFORMANCE — Appeal to the Equitable Discretion of the Chancellor. — In suits for specific performance of contracts the appeal is to the equitable discretion of the chancellor, a discretion, however, which is not arbitrary. The specific performance of a contract is not a matter of absolute right, but rests in a sound judicial discretion. The contract, to be specifically enforced, must be equitable, and free from fraud, misapprehension, or mistake.

3. SPECIFIC PERFORMANCE — Not Decreed where Inequitable. — A court of equity does not decree specific performance when it would be inequitable to do so.

4. SPECIFIC PERFORMANCE — Abatement of Purchase Price — Mistake as to Fire Limits — Case at Bar. — The instant case was a suit for specific performance by the vendee of a lot and the vendee also asked an abatement of the purchase price because of a false statement of the vendor and his agent that the lot was outside of the fire limits of the town when in fact it was within the fire limits. This statement was made innocently and in good faith by the vendor. When the vendor bought the lot it was outside of the fire limits but after he acquired it the fire limits were extended so as to include the lot. The lower court decreed specific performance of the contract and a substantial abatement of the purchase price.

Held: That there was a mutual mistake as to the fact that the fire limits had been extended to include the lot in question; and, as there was no suggestion of fraud or intention to deceive, the decree compelling the vendor to perform a contract which he never intentionally agreed to, and to convey his property at a price nearly one-third less than he agreed to, was erroneous.

5. VENDOR AND PURCHASER — Deficiency in Title — Quantity or Quality — Specific Performance — Abatement of Purchase Price — Fire Limits — Case at Bar. — It is well settled that the vendor, when there is a deficiency in title, quantity, or quality of the estate, cannot force the vendee to take the property, the option nevertheless rests with the vendee to require the vendor to convey it, or such part of it as he is able to convey, with an abatement of the purchase money for any such deficiency. But this rule has no application to a case where property is described as being without the fire limits of a town but is found to be within them. Such building restrictions cannot accurately be said to constitute a deficiency or defect in the title, quantity, or quality of the estate. Certainly the municipal authorities, in ordaining such restrictions, did not purpose to decrease the value of the property.

6. MUNICIPAL CORPORATIONS — Building Restrictions — Fire Limits — Knowledge of Ordinance — Case at Bar. — In the instant case, a suit by a vendee for specific performance and an abatement of the purchase price, complainant claimed to be ignorant of the fire limits of the town in which the lot was situated.

Held: That the fire limits were prescribed by ordinance and complainant could not be permitted for his own advantage to disclaim knowledge of the ordinance which had the force of law.

7. ORDINANCES — Knowledge of Ordinance. — In is a matter of common knowledge that, in actions for personal injuries upon the public streets, all are charged with actual notice of the provisions of ordinances enacted for the regulation of traffic and for the public safety, and if such actual knowledge is always imputed in cases where life, limb, and liberty are involved, there is a much stronger reason for holding it applicable where the question is one involving a mere contract obligation.

Appeal from a decree of the Circuit Court of Culpeper county. Decree for complainant. Defendant appeals.

The opinion states the case.

Grimsley & Miller, for the appellant.

Hiden, Bickers & Button, for the appellee.

PRENTIS, P., delivered the opinion of the court.

The question here involved is whether or not Swan, the vendee of a certain lot in the town of Culpeper, is entitled to specific performance of the contract, and also to an abatement of the purchase price of the lot, because of a false statement of a material fact, relating to a local restrictive building ordinance, which induced him to buy, inadvertently made both by and for Millman, the vendor.

The litigation grows out of these circumstances:

The vendor and vendee both owned lots in the town, but Swan was anxious to buy the lot of Millman, because it adjoins the Southern Railway, in order to erect a warehouse thereon for use in his business, and because it was more desirable than his own, which was not located on the railroad. Both employed Jones as their agent to sell their lots, but Swan was unwilling to part with his own unless he could buy Millman's lot. Both lots were offered at public auction on the same day and under the same advertisement, which, after describing them, contained this clause: "Both of the above described lots are out of the fire limits. That by itself makes these lots more valuable. It enables owner of same to build with much less cost than you could build in the fire limits." This statement was true as to Swan's lot, but untrue as to Millman's lot.

The town council had adopted an ordinance limiting the kind of buildings which could be erected within a specified area, which because of the required construction made it much more expensive to build upon lots within that limited area. When Millman bought his lot in 1919, it was outside of this area, as then defined. After he acquired it, however, the boundaries were extended so as to include his lot. At the time of the auction sale he innocently and in good faith confirmed the statement of his agent, Jones, that the lot was outside of these fire limits, as they are called. At that sale Swan, the vendee, declined to confirm the sale of his own lot at $1,530.00 until after he agreed to buy the Millman lot as the highest bidder therefor at $4,000.00. He relied upon the statement that the lot was outside of the fire limits, and hence that he could build a warehouse suitable for his business of cheaper construction than if located therein.

A few days thereafter and before the terms of the sale had been complied with, Swan discovered the fact that he was prohibited by the town ordinance from building such a warehouse as he contemplated, and that in order to utilize the lot thus in his business it would be necessary for him to spend a very much larger amount in the construction of a building of brick, cement, or stone, the materials required by the ordinance. He then notified Millman that because of this misrepresentation he would insist upon an abatement of the purchase price. Millman declined to accede to his suggestion, but offered to rescind the contract. It also appears that Swan could then have repurchased the lot he had sold at an advance of $50.00, according to two witnesses, or by his own admission for an advance of $300.00. He declined to do so and instituted this suit, setting up these facts, praying for specific performance and for an abatement of the purchase price which he had agreed to pay Millman.

Millman demurred to the bill, and also filed his answer and cross-bill, praying for specific performance of the contract in all its terms, or for absolute rescission. The demurrer was overruled, the case referred to a master, who reported that the value of the lot subject to the restrictions of the ordinance is $1,200.00 less than it would have been had it been exempt from those restrictions. This report was confirmed, and there was a decree in Swan's favor for an abatement of $1,200.00 of the purchase price. It is from this decree that Millman has appealed.

The mass of authorities relating to such damages perplex one who undertakes to analyze them. This is clearly indicated by the elaborate note to the case of George Hesse, 100 Tex. 44, 93 S.W. 107, 8 L.R.A.(N.S.) 804, 123 Am.St.Rep. 776, 15 Ann.Cas. 456, which begins: "Perhaps no doctrine is more complicated in the variety of cases found in the books, nor upon which there is less harmony of opinion, than the subject of damages. For this reason it is extremely difficult to satisfactorily determine what is the true measure of damages to be recovered for deceit in the sale or exchange of real estate."

We shall not venture into this maze, because it is unnecessary.

In support of the decree, the case of Logwood Holland, 131 Va. 186, 108 S.E. 571, and similar cases are relied on. The principle held applicable there is that which has been so frequently applied to cases involving a deficiency in acreage, or loss of a part of the acreage contracted for, by title paramount. While we have no disposition to recede from those cases, we are not disposed to extend the doctrine.

The rule to be applied in this case depends upon other considerations. Here we have a bill to enforce specific performance of a contract to convey land, where it is perfectly apparent that both parties were mistaken as to the area in the town included in the ordinance imposing building restrictions, and the question is whether a court of equity, in the absence of any fraud or intentional deceit, should enforce such a contract so based upon mistake in favor of the vendee so as to relieve him of nearly one-third of...