Ridenour v. France, 3-881A200
| Decision Date | 30 November 1982 |
| Docket Number | No. 3-881A200,3-881A200 |
| Parties | Leon RIDENOUR and Phoebe Ridenour, Appellants (Plaintiffs Below), v. Rex FRANCE and Alene France, Appellees (Defendants Below). |
| Court | Indiana Appellate Court |
Larry C. Thrush, Wabash, for appellants.
Mark S. Pantello, Sowers & Benson, Fort Wayne, for appellees.
After a bench trial, the trial court entered a negative judgment on the Ridenours' claim against the Frances for specific performance of a land sales contract. On appeal, the Ridenours raise the following issues:
I. Did the Frances, as buyers, assume the risk of property loss pending the closing of the sale?
II. Did the trial court err in denying the Ridenours' claim for specific performance and in granting the Frances the return of the $1,000.00 downpayment?
Reversed.
A house and several out-buildings were built on land owned by the Ridenours. They rented the house, some of the out-buildings, and some of the land to the Frances on a month-to-month basis. Several years later, the Frances asked the Ridenours if they could "buy the place." The Ridenours agreed to sell the Frances 1.748 acres for $30,000.00, which included the house and all the out-buildings. Ridenours and Frances drafted their own sales contract. The Frances made a $1,000.00 downpayment upon signing the contract; the balance was due at closing. After signing the contract, the Frances continued to occupy the house. Approximately a month after signing the contract, but before closing, the house was destroyed by fire. The parties had not discussed, nor did the contract set forth, who should bear the risk of property loss pending closing.
The Ridenours contend that the trial court erred in finding that they must absorb the loss of the house. They assert that the Frances assumed the risk of loss when the contract was signed and the Frances paid their downpayment. We agree.
Once the contract was consummated the Frances became the equitable owners and all the incidents of ownership accrued to them. Absent a contrary agreement by the parties, the Frances as equitable owners assumed the risk of loss. Thompson v. Norton (1860), 14 Ind. 187, 190; Cf. Skendzel v. Marshall (1973), 261 Ind. 226, 301 N.E.2d 641, 646; Cf. Indiana Ins. Co. v. Sentry Ins. Co. (1982), Ind.App., 437 N.E.2d 1381, 1388; See D. Dobbs, Handbook on the Law of Remedies, 40 (1973).
The Frances contend that the Ridenours agreed to assume the risk of loss. They assert that this agreement can be inferred from conduct of the parties after the contract was consummated which they submit shows that the parties continued the relationship of landlord and tenant. This conduct was that the Frances continued to occupy the house, the Ridenours failed to return any of the July, 1978 rent, the Ridenours used certain out-buildings for storage rent free, and that the Ridenours continued to have the house insured.
A landlord-tenant relationship cannot be inferred from the parties' conduct. A tenancy cannot be inferred by the Frances occupying property which they had contracted to purchase. Fall v. Hazelrigg (1874), 45 Ind. 576, 578.
Neither can a tenancy be inferred from the Ridenours' failure to refund any of the July, 1978 rent. Because the Frances did not ask the Ridenours to refund any rent, payment of the July rent can only be considered part of the contract to purchase. Assuming arguendo that failure to refund any July rent resulted in a tenancy, this tenancy would be limited to July because the Frances did not pay rent for any month after July. However, the house burned after July while the Frances were occupying it rent free. Contrary to the Frances' assertion, the conduct of the parties indicates that a tenancy did not exist when the house was destroyed.
Similarly, the Ridenours' rent free use of certain out-buildings did not establish the Ridenours as landlords. These out-buildings had not been rented to the Frances. After the contract was consummated, the Frances made no request that the Ridenours remove their property from these out-buildings within any certain time. The only reasonable inference to be drawn from these circumstances is that the Ridenours had been allowed to remove their property at their leisure. The gratuitous use of the out-buildings by the Ridenours did not make them the landlords of the Frances during the contract to purchase period.
Finally, we consider the contention of the Frances that a continuation of Ridenours's insurance on the house and buildings reflected a landlord-tenant relationship. We can not agree with this contention, since...
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