Smith v. Hornkohl

• Decision Date: 31 May 1958
• Docket Number: No. 34362,34362
• Citation: 90 N.W.2d 347,166 Neb. 702
• Parties: Leonard E. SMITH and Eva Smith, Appellants, v. Marion HORNKOHL, Appellee.
• Court: Nebraska Supreme Court

Page 347

90 N.W.2d 347

166 Neb. 702

Leonard E. SMITH and Eva Smith, Appellants, v. Marion HORNKOHL, Appellee.

No. 34362.

Supreme Court of Nebraska.

May 31, 1958.

Syllabus by the Court

1. 'Fee simple' means an absolute title or estate in lands wholly unqualified by any reversion, reservation, condition, or limitation or possibility of any such thing, present or future, or precedent or subsequent.

2. Where an allegation in the petition is admitted by the answer, the fact is established for the purpose of the case, and the court cannot disregard it.

3. The doctrine is fundamental that either of the parties seeking a specific performance against the other must show, as a condition precedent to his obtaining the remedy, that he has done or offered to do, or is then ready and willing to do, all the essential and material acts required of him by the agreement at the time of commencing the suit, and also that he is ready and willing to do all such acts as shall be required of him in the specific execution of the contract according to its terms.

4. Where the vendor is unable to convey the property which he has agreed to convey because of a defect in the quality or quantity of the estate which he possesses and the vendee has entered into the contract without knowledge or notice of the deficiency or defect in the vendor's title, he may ordinarily have specific performance of the contract as to whatever interest the vendor has with such abatement of the purchase price as shall be proportionate to the diminution in value of the subject matter, to be determined by the court from competent evidence adduced with relation thereto.

5. On the other hand, specific performance with abatement will not be enforced where it would be productive of inequity or would have the effect of making a new contract between the parties, or it is patent that the nature of the subject matter, the terms of the contract, or the kind and extent of the defect are such that they furnish no basis upon which to ascertain the amount of the compensation or abatement with any degree of certainty, and the fixing thereof would therefore be a mere matter of speculation.

6. Equity may reform a contract for the purchase of land so as to include terms upon which the parties definitely agreed and may also require specific performance of the contract as reformed.

7. If the purchaser of real estate is aware of a defect in the vendor's interest or title, or deficiency in the subject matter, at the time of entering into a contract for the purchase thereof, he is ordinarily not entitled to any compensation or abatement of the purchase price because of that fact when suing for the specific performance thereof. However the foregoing rule is subject to an exception when the parties, with full knowledge of such fact, enter into a written contract providing the vendor shall convey the premises to the purchaser in fee simple, free from encumbrance. In such a situation it becomes immaterial that the purchaser merely had notice thereof at the time the contract was entered into for the seller must protect himself by the terms of the contract he enters into with reference thereto. If he does not do so then the purchaser has a right to insist upon the terms of the contract as made.

8. Generally, on cross-examination of a witness, any fact may be elicited from him which tends to show his bias or partiality, and considerable latitude should be allowed counsel in attempting to do so.

Halcomb, O'Brien, Knapp & Everson, Kimball, for appellants.

Heaton & Heaton, Sidney, for appellee.

Heard before SIMMONS, C. J., and CARTER, MESSMORE, YEAGER, CHAPPELL, WENKE, and BOSLAUGH, JJ.

WENKE, Justice.

This is an appeal from the district court for Lincoln County. It involves an action for specific performance of a real estate contract brought by Leonard E. and Eva Smith, husband and wife, against Marion Hornkohl and involves a half section of land located in Kimball County, Nebraska. Hornkohl answered and therein asked that plaintiffs be required to pay the balance of the purchase price. Trial was had and the court found generally for the defendant, granting him the relief for which he had prayed. Their motion for new trial having been overruled the plaintiffs brought the matter here from the trial court's ruling thereon.

The action was properly brought in Lincoln County. See section 25-403, R.R.S.1943.

The principal question raised by the appeal is, are appellants, under the circumstances as disclosed by the record, entitled to an abatement of a part of the purchase price in view of the fact that appellee sold them the land in fee simple when, in fact, he did not own the mineral estate therein? When referring to the appellants herein individually we shall refer to them as Mr. or Mrs. Smith.

As we said in State v. Alter, 80 Neb. 405, 114 N.W. 293, 294: 'There is no expression known to the law that is more unequivocal or completely free from any sort or kind of ambiguity, or doubt than the phrase 'fee simple.' It means an absolute title or estate in lands wholly unqualified by any reversion, reservation, condition, or limitation or possibility of any such thing, present or future, or precedent or subsequent, * * *.' See, also, Watson v. Dalton, on rehearing, 146 Neb. 78, 86, 18 N.W.2d 658, 20 N.W.2d 610.

The 'Agreement for Warranty Deed' entered into by the parties provides, insofar as here material, as follows:

'ARTICLES OF AGREEMENT made this 16th day of March, 1956, between Marion Hornkohl, a single man of Route #1, North Platte Nebraska, party of the first part, and Leonard E. Smith & Eva Smith, Husband & Wife, as Tenants by the entirety with rights of Survivorship to each other, party of the second part.

'WITNESSETH, That the said party of the first part hereby covenants and agrees that if the party of the second part shall first make the payments and perform the covenants hereinafter mentioned on Their part to be made and performed, the said party of the first part agrees to furnish to second party a good and sufficient abstract of title showing a good title of record to the premises hereinafter described in the party of the first part, and will convey and assure to the party of the second part, in fee simple, clear of all encumbrance whatsoever, by good and sufficient Warranty Deed, the following lot, piece and parcel of ground, viz: The North Half of the South Half and the South half of the North Half of Section 28, Township 15 North, Range 57, West of the sixth P M, in Kimball County Nebraska, together with all crops now growing on this land. Possession will be given to Second party immediately on signing this contract. This tract contains 320 acres, more or less according to the Government Survey thereof. The price is $32.50 an acre.

'And the said party of the second part hereby covenants and agrees to pay to said party of the first part the sum of Ten Thousand Four Hundred ..... DOLLARS in the manner following: One Hundred ..... Dollars, cash in hand paid, the receipt of which is hereby acknowledged, and the balance of $10,300.00 to be paid as Follows; The sum of $3300.00 will be paid as soon as second party has had an opportunity of having the Abstract of Title examined and approved, but not later than April First 1956; The balance of $7000.00 to be paid in five equal annual installments of $1400.00 each with interest at 5% from April First 1956, interest on all of the unpaid balance to be paid annually on April first with the principal payment, first principal payment will be due on April first 1957. All or any amount of the unpaid balance will be accepted by first party on the first of any month with interest at 5% to date of payment.' (Emphasis ours.)

'Where an allegation in the petition is admitted by the answer, the fact is established for the purpose of the case, and the court cannot disregard it.' Fidelity Finance Co. v. Westfall, 127 Neb. 56, 254 N.W. 710, 711.

The appellee's answer admits paragraph No. 3 of the petition of appellants which alleges: 'That immediately after March 16, 1956 the plaintiffs and their agents took possession of the real estate described above and caused agricultural and conservation work to be performed thereon.' This was in accordance with the provisions of the parties' contract. Appellants were still in possession thereof when this action was filed on August 2, 1956, and at the time of trial on September 6, 1957. Appellants paid, and appellee accepted, $3,400 of the purchase price. It is the balance of $7,000, with interest, which the court ordered appellants to pay and for which they were ordered to accept a warranty deed from appellee containing the following provision: 'It is understood by the parties that no mineral interests are conveyed by this instrument.'

'The doctrine is fundamental that either of the parties seeking a specific performance against the other must show, as a condition precedent to his obtaining the remedy, that he has done or offered to do, or is then ready and willing to do, all the essential and material acts required of him by the agreement at the time of commencing the suit, and also that he is ready and willing to do all such acts as shall be required of him in the specific execution of the contract according to its terms.' 4 Pomeroy's Equity Jurisprudence (5th Ed.), section 1407, p. 1050. See, also, Freeman v. Elder, 158 Neb. 364, 63 N.W.2d 327.

Appellants had met these requirements. Both parties asked for specific performance by the form of relief prayed for and, in fact, the trial court granted appellee such relief.

In addition to praying for specific performance of the contract, as entered into by the parties, the appellants prayed: 'That if the defendant be unable to convey all of the property contracted to be conveyed that the plaintiffs have and recover judgment against the defendant requiring him to convey so much of the property described by the aforementioned contract as ...