Murray v. Finlayson ( 1928 )

I dissent from that portion of the prevailing opinion wherein the judgment is affirmed for the rental of the real estate conveyed to the plaintiffs. In my opinion neither the pleadings, the evidence, nor the findings of fact are sufficient to support a judgment for rentals in the sum of $960 or in any sum at all. The amended complaint upon which this action was tried, so far as it relates to rentals, alleges:

"That notwithstanding the agreement and promise of the defendants so to do, they have at all times since entering into the agreements and contracts herein set forth, refused and failed to build the garages on said premises and have failed to complete said houses by neglecting to do and perform and place in and upon the (premises) the following, for which plaintiffs will be obliged to pay the following amounts."

Then follows a detailed description of what the plaintiffs claim must be done to complete the buildings and the cost thereof.

It is then further alleged in the amended complaint:

"That by reason of the failure of defendants to complete said houses plaintiffs have been unable to occupy, rent or sell said houses and the reasonable rental value thereof is $40.00 each per month making a total amount due to this date of $880.00 and an accrual of $80.00 each month said property remains incomplete."

The defendants, in their answer, set up by way of defense that the deed delivered by them to the plaintiffs was materially altered after it was delivered; that plaintiffs breached their agreement, in that they failed and refused to deliver to the defendants 800 shares of water stock; and that plaintiffs, contrary to their agreement, failed and refused to pay the taxes and water assessments on the property conveyed to the defendants by the plaintiffs. The defendants prayed that the alleged agreement between the plaintiffs and defendants be rescinded, or, if rescission could not be had, that the defendants be awarded a money judgment against plaintiffs. Plaintiffs replied to the affirmative matters alleged in defendants' answer. In plaintiffs' reply it is in part alleged as follows:

"That on or about the 17th day of December, 1926, plaintiffs and defendants duly delivered to each other and exchanged deeds to their respective properties herein described * * *; that after the exchange of deeds by the parties hereto, each went into possession and are now in possession of the property so conveyed each to the other."

It is obvious that the date, December 17, 1926, is an error in the year, and should be 1925 instead of 1926. The evidence is all to the effect that all of the transactions between the parties to this action were had in November and December, 1925. The trial of the action began in November, 1926.

The evidence shows without conflict that, at the time the transaction involved in this controversy was had, the defendants were engaged in the construction of two houses upon the premises conveyed to the plaintiffs. The work of constructing the buildings continued until at least January 2, 1926. On March 2, 1926, defendant A.M. Finlayson informed Joseph F. Lloyd, an agent of the plaintiffs, that the houses "are finished as much as I intend to finish them." This information was immediately conveyed to the plaintiff W.M. Murray. Again in May, 1926, defendant A.M. Finlayson informed the plaintiff W.M. Murray that he would not complete the buildings. In July, 1926, the defendant A.M. Finlayson again informed the plaintiff W.M. Murray that he would not complete the buildings. The evidence further shows that the deed from the defendants to the plaintiffs conveying the property in Salt Lake City upon which the houses were being built was dated November 17, 1925. It was acknowledged on the same date, and was recorded by the county recorder of Salt Lake county under date of December 24, 1925, at the request of the plaintiff W.M. Murray. The trial court found that this deed from the defendants to the plaintiffs was a valid deed. The trial court also found that the defendants failed to complete the buildings as they agreed, and that the reasonable cost of completing the buildings is the sum of $622.77. The only finding which supports, or tends to support, the judgment for $960 for loss of rentals reads as follows:

"That as a result of the failure on the part of the defendants to complete said houses, as he agreed to do, plaintiff has been deprived of the use of said houses and the loss of rentals in the sum of $960.00.

We thus have the plaintiffs affirmatively alleging "that after the exchange of deeds by the parties hereto each went into possession of the property so conveyed each to the other." We find that the plaintiffs held the legal record title to the property conveyed to them from and after December 24, 1925. There is no pleading, no evidence, and no finding that the plaintiffs, during this period of one year, failed to have the buildings finished so that they could be occupied because of any reliance upon any continuing or repeated promise of the defendants. On the contrary, the plaintiffs' evidence shows, without conflict, that upon three occasions the defendant A.M. Finlayson informed the plaintiffs that he would not complete the buildings. The plaintiff W.M. Murray so testified, and his testimony in this respect is not denied. When the defendant A.M. Finlayson, in March, 1926, informed the plaintiffs that he would not complete the buildings, the contract was breached, and the rights of the plaintiffs for damages for such breach became fixed and complete. The plaintiffs should not be permitted to add to such damages by failing to put their premises, the possession of which was in them, in such condition that they could be occupied. It is quite uniformly held that it is the duty of a person claiming damages to mitigate the same by such means as a reasonable and prudent man would employ in his own affairs. 6 Page on Contracts, § 3193, p. 5614; 17 C.J. p. 927.

In the instant case it was not the action of a reasonable and prudent person to sit idly by and permit the loss of $80 monthly for a period of one year when the expenditure of the sum of $622.77 would have avoided such loss. If plaintiffs may recover rent for one year upon the premises which were conveyed to them because the houses were not completed as agreed, I can see no reason why they may not continue indefinitely to collect such rents. Nor does the fact that the defendants in their answer prayed for a rescission of the contract for the exchange of properties alter the rule. There is no pleading, no evidence, and no finding of fact that the plaintiffs were deterred from putting the buildings owned by them in a habitable condition because of any claim made by the defendants. There is evidence that the defendants were not satisfied with the transaction had with the plaintiffs, but there is not a scintilla of evidence that the defendants, or either of them, ever indicated that they would seek to have the conveyance by them to the plaintiffs set aside except by the allegation contained in the answer filed herein. The answer was not filed until June 2, 1926, which was three months after the defendant A.M. Finlayson first notified the plaintiffs that he would not complete the buildings. The mere fact that the defendants filed such an answer to plaintiffs' complaint cannot well be said to enlarge the damages which plaintiffs are entitled to recover.

It may be conceded that, if the defendants did not prosecute with reasonable diligence the work of completing the buildings prior to March 2, 1926, then, and in such case, plaintiffs may, under proper pleadings and proof in support thereof, be entitled to damages in the way of rentals for any unreasonable delay in completing the buildings. Likewise it may be conceded that the plaintiffs may be entitled to rentals after March 2, 1926, for such a period of time as was reasonably necessary to complete the buildings. Neither the pleadings nor evidence proceeded upon such theory. Plaintiffs' pleadings, their evidence, and the findings of fact apparently proceed upon the theory that the mere fact that defendants did not complete the buildings as agreed is controlling, and entitles the plaintiffs to the rental value of the premises without any limit as to time; that the only way the defendants could escape such continuing and accumulating liability was for them to complete the buildings. Such theory is not supported by, but is contrary to, the rule announced by the adjudicated cases. McKellar Real Estate Inv. Co. v. Paxton,62 Utah 97, 218 P. 128; Jordan v. Madsen (Utah) 252 P. 570; 17 C.J. § 224, p. 926.

I am therefore of the opinion that the judgment for the rental of the buildings in the sum of $960 should be reversed, otherwise I am in accord with the views expressed in the prevailing opinion.