Uszenski v. McNabb

NORVELL, Justice.

Frank T. Uszenski brought this suit against Bernice McNabb to cancel a sales contract, dated January 12, 1948, and to recover the earnest money deposited by him. The trial court held that the defendant was entitled to the earnest money as liquidated damages, as provided for in the contract, and rendered judgment that plaintiff take nothing. The plaintiff has appealed and the parties will be designated as in the trial court.

According to the contract, the one-half block of land involved contained 5.03 acres of land, more or less. The purchase price was $3,750, and $500 was deposited as earnest money. The contract also provided that defendant should furnish “a title policy showing a good and merchantable title to said lands and premises with all taxes paid up to January 1, 1948.” Later the contract was amended by consent of both parties to provide that defendant would furnish an abstract of title showing merchantable title instead of a title policy.

It appears that the defendant was the only witness called and most of the facts were agreed upon. The stipulation shows that plaintiff’s attorneys, upon examining the title, pointed out that .59 acres was covered by an easement for a three-lane public highway across the North end of said tract. The plaintiff refused1 to go through with the deal and brought this suit for rescission of the contract. It appears that while both parties knew of the existence of the highway, they “did not know the highway easement was actually upon the lánd in controversy at the time they signed the contract.”

Plaintiff argues that the only conclusion “to be reached from the facts and the stipulation was that both parties supposed the highway joined the 5.03 acre tract, but was not a part of same. The parties, then, were acting under a mistake of fact, not that there was a highway but that the highway was located on the tract to be sold.”

This conclusion seems to follow from the statement of the facts above set out. In other words, plaintiff had a contract which called for a merchantable title to 5.03 acres, more or less. The defendant sought to fulfill this contract by offering to convey an encumbered tract of which only 4.44 acres could be beneficially used, because the remaining .59 of an acre was occupied by the highway. The plaintiff sought to acquire the property for the purpose of operating a trailer park thereon, and it appears that between one-eiglith and one-ninth of the land is occupied by the easement. If the contract were carried out plaintiff would have to pay about $440 for land he could not use. This variance in acreage and money is substantial.

This is not a case involving an executed contract in which the vendee is suing for a breach of warranty contained in a deed because of a visible easement. The plaintiff here seeks to rescind an executory contract, and the suit was brought by plaintiff immediately upon discovery that the land was actually encumbered by an easement and that, as a result the defendant was not in a position to carry out the contract which called for a good and merchantable title to 5.03 acres of land, more or less.

This case, in certain respects, is similar to Shaw v. Morrison, 14 S.W.2d 953, by the Eastland Court of Civil Appeals, in which a distinction is pointed out as to executory contracts of the nature here involved. The Pennsylvania case of Evans v. Taylor, 177 Pa. 286, 35 A. 635, 69 L.R.A. 790, is cited with approval in support of the proposition that cases like this are controlled by equitable principles applicable to cases of specific performance. Each case must, to a certain extent, stand on its own bottom and we are of the opinion that, in view of the circumstances disclosed by the record, the mutual mistake of the parties and the substantial deficiency in acreage, it would be inequitable to specifically enforce the contract here involved. It follows that said contract should be rescinded and the earnest money returned to plaintiff.

It is accordingly ordered that the judgment appealed from be reversed. The contract between the parties dated January 12, 1948, is cancelled and plaintiff is awarded judgment against the defendant for the sum of $500, together with interest thereon from May 9, 1949 (the date of the judgment in the trial court), until paid, at the rate of six per cent per annum.

Reversed and rendered.