Nee v. Dillon, 13196.

• Decision Date: 13 December 1956
• Docket Number: No. 13196.,13196.
• Citation: 99 US App. DC 332,239 F.2d 953
• Parties: Dermot A. NEE and Antoinette K. Nee, Appellants, v. Joseph V. DILLON and Lois B. Dillon, Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

99 US App. DC 332, 239 F.2d 953 (1956)

Dermot A. NEE and Antoinette K. Nee, Appellants, v. Joseph V. DILLON and Lois B. Dillon, Appellees.

No. 13196.

United States Court of Appeals District of Columbia Circuit.

Argued September 26, 1956.

Decided December 13, 1956.

Mr. Stephen G. Ingham, Washington, D. C., for appellants.

Mr. Joseph V. Dillon, appellee, pro se.

Before EDGERTON, Chief Judge, and WASHINGTON and DANAHER, Circuit Judges.

WASHINGTON, Circuit Judge.

This is an appeal from a judgment of the District Court rescinding a contract for the sale of real estate and awarding the plaintiff-purchasers certain out-of-pocket expenses for improvements to the property.

The record presents a somewhat confused set of facts which may be briefly summarized as follows: On June 5, 1952, appellants, defendants below, entered into a contract to sell to the appellees an improved lot located in Maryland, at a price of some $42,000. At the time the contract was signed the residence on the real estate — evidently a large and attractive house — was 90 per cent completed. The contract was written on a form supplied by a real estate agent; stipulations were added regarding the completion of the house, a patio terrace, sodding, and other things. Subsequent to the original contract the parties executed an escrow agreement and appellees deposited with Suburban Title & Investment Corporation¹ the sum of $850.00, which was to be paid to the appellants upon completion of certain things mentioned in the agreement. The deed was executed on July 18, 1952, but apparently was not seen by the purchasers until sometime after July 30, 1952, the date of recordation. Upon examination of the deed the purchasers noticed a shortage as to the amount of land conveyed and made demand upon the sellers to make up the difference. An extended period of negotiations and attempts at settlement ensued, during which appellees sought to have remedied the shortage of land and other alleged failures on the part of appellants to perform according to the terms of the original contract and the escrow agreement. Finally, on November 17, 1953, appellees filed their complaint in the District Court seeking specific performance or, in the alternative, rescission and damages. Appellants counterclaimed for the amount deposited in escrow. Appellees moved into the property on July 17, 1952, and have occupied it continuously since then.

We note first of all that at the time the complaint was filed both plaintiffs and both defendants apparently were residents of Maryland, although one plaintiff and one defendant maintained business addresses in the District; that most if not all the witnesses were residents of Maryland; that the subject of the litigation, the land, is located in Maryland; and that we are obliged to apply the principles of substantive law which would be applied by the Maryland courts if the litigation had been brought there.

In a situation of this sort we think the District Court should make inquiry at pre-trial or at the trial itself with respect to the reasons why the doctrine of forum non conveniens should not be applied, even though jurisdiction in the strict sense can be obtained here under established rules. Cf. Gross v. Owen, 1955, 95 U.S.App.D.C. 222, 221 F.2d 94. In matters of this kind, plaintiffs from other jurisdictions should normally resort to their own courts: the courts of the District of Columbia, burdened as they are, should not without good reason be asked to make inquiry concerning events happening outside their jurisdiction or enter decrees with respect to property located elsewhere.

The case having progressed this far, however, we will review it, and will apply Maryland law to the issues of substance. The principal question presented is whether the shortage of land justifies rescission. At the outset it appears questionable whether appellees have not waived whatever remedy they may have had in respect of the shortage. By letter dated November 12, 1952, some months after taking possession of the property and after the discovery of the shortage, the purchasers listed three items which they asserted were still to be done by appellants before final settlement could be reached. The shortage of land was not mentioned. The letter concluded, "As soon as these three items are completed, I shall be pleased to notify the Suburban Title Company to release the amount held in escrow." Nevertheless, the trial court concluded that the shortage of land was never waived. In the view we take of the case, however, it is not necessary to review the validity of this finding.

We turn to the evidence as to the shortage of land. The contract described the land in two ways. In the first blank of the printed form, calling for a description of the property, there appears the following: "Lot 4 and pt of 5, Plat of Burning Tree Valley, Lot 145 by 296." In the blank following the clause providing for a first deed of trust the property is thus described: "Lot 4 and part of 5, Plat of Burning Tree Valley being 145 ft deep on Beach Tree Road constituting 39,495 sq. ft." The deed represented the area of the property to be 37,967 square feet. From the evidence of a surveyor called by appellants the trial court concluded that the property in fact contains 38,495.41 square feet. There was thus a discrepancy of some 1,000 square feet between the amount specified by the contract and the amount actually conveyed by the deed.

Since the contract was to be performed in Maryland, the law of that state governs the rights of the party claiming failure of full performance. Restatement, Conflict of Laws §§ 358, 370 (1934). The Maryland Court of Appeals long ago said that the rescission of an executed contract for the sale of real estate "is an exertion of the most extraordinary power of a Court of equity, a power that ought not to be exercised except in a clear case * * * never for alleged false representations unless their falsity is certainly proved, and unless the complainant has been deceived and injured by them." Cochran v. Pascault, 1880, 54 Md. 1, 13 (Emphasis in original). Here no fraud or intentional falsehood was alleged. Of course a shortage in the amount of land conveyed may in some circumstances warrant rescission. But the size of the shortage is not necessarily determinative. The significance of the variation "is to be measured by the special adaptability of the part of which the purchaser was deprived to the particular uses for which he had designed it and the primary consideration which induced him to enter upon the negotiation." Keating v. Price, 1882, 58 Md. 532, 537. Shortages justify rescission when the...