Morgan v. Bros

• Decision Date: 05 June 1905
• Citation: 34 Colo. 25,81 P. 700
• Parties: MORGAN v. HENDRIE BROS. & BOLTHOFF.[*]
• Court: Colorado Supreme Court

81 P. 700

34 Colo. 25

MORGAN v. HENDRIE BROS. & BOLTHOFF.^[*]

Supreme Court of Colorado

June 5, 1905

Appeal from Arapahoe County Court; Ben. B. Lindsey, Judge.

Action by Hendrie Bros. & Bolthoff against Edward B. Morgan, as administrator of the estate of Samuel B. Morgan, deceased. From a judgment allowing a claim against decedent's estate, the administrator appeals. Reversed in part.

Teller & Dorsey, E. B. Morgan, and Stanley C. Warner, for appellant.

Waldron & Thompson, for appellees.

GUNTER J.

The entire claim of appellees filed against the estate of Samuel B. Morgan consisted of five distinct items, described fully in subdivisions 1, 2, 3, and 4 of the judgment of the lower court. There was one judgment, and by it the above five items were allowed. From this judgment the appeal under consideration was taken.

There is no controversy as to the correctness of the judgment in its allowance of the claims set out in subdivisions 1, 2, and 4 thereof. The dispute is over the action of the court in allowing the two claims set out in subdivision 3 thereof that is, in allowing, as damages for the breach of the warranty of title to 160 shares of stock, the value thereof $8,000, and the dividends collected thereon, $2,480. If, as to that part of the judgment below awarding damages upon the question thus in dispute, we assume the facts to be as appellees, contend, they are: August, 1894, Samuel B. Morgan as owner, sold to appellees, with warranty of title, 160 shares of stock. No title passed by this attempted transfer, because Morgan had none. July, 1898 appellees, because of want of title in their vendor, Morgan, were compelled to surrender the stock to the true owner thereof, as also the dividends, $2,480, received by them thereon during the time they had held the same; that is, from August, 1894, to July, 1898. The surrendered stock and dividends were availed of by Morgan in satisfying a judgment against him and others, declaring the title of the stock to have been in a third party at the date of the attempted sale to appellees, and declaring such third party entitled to said dividends, $2,480, collected thereon. Thereafter Morgan died, and appellees filed against his estate a claim for damages sustained through the above breach of his warranty title to said stock. The value of the stock, when purchased by appellees and at the time of its surrender, was $8,000, and the dividends collected by them thereon during their holding were, as stated, $2,480. The lower court awarded appellees as damages for said breach of warranty the value of the stock, $8,000 and the amount of the dividends received thereon, $2,480. No question of fraud was involved.

Did the trial court adopt the proper rule for measuring the damages sustained by appellees through the breach of Morgan's warranty of title to the assigned stock? ' Appellant says that it did not; that the proper rule in such cases is the purchase price, with interest. The authorities are in conflict as to the measure of damages in case of the breach of a warranty of title, express or implied, of both real and personal property; one line holding the proper measure in such case to be the value of the property--according to some, at the date of the sale; to others, at the date of the vendor's dispossession--while another line holds the proper measure to be the purchase price, with interest thereon. As to real property, the latter rule has been adopted by this court. Taylor v. Wallace, 20 Colo. 211, 37 P. 963. There the remote covenantee, who held under a deed with full covenants of warranty, having lost title, sued the original grantor, who had conveyed with like covenants, for damages on his warranty of title. The court held that the measure of damages in such case was the purchase money paid by the plaintiff to his immediate grantor, with interest thereon. The main reason assigned by the court in adopting, amid conflicting authorities, this rule, was that, as it confined the recovery to actual loss, it was the most equitable. The authorities generally are that the rules as to the measure of damages for a breach of warranty of title should be uniform in the same state in its application to real and personal property.

In Noel v. Wheatly, 30 Miss. 181, an action to recover damages upon a warranty of title to personal property, the court said: 'In the absence of fraud, the plaintiff can only recover back his money, with interest, and such damages as he necessarily sustained in protecting his title. This is certainly the rule of damage on the covenant of warranty in the sale of land, and no good reason is perceived why the rule should not be the same with respect to both kinds of property. The rule is one which is certain, easy of application, and must, in most cases, be just in its operation. All the authorities hold that mere speculative profits shall not be recovered by the vendee. If this be true, how is it possible to conceive a case in which he could recover more than he expended in the first instance in making the purchase and such other incidental expenses as were incurred in defending the title?' In Crittenden v. Posey, 1 Head (Tenn.) 311, a ...