Case Title: Brown v. Newton

Citation: 282 P.2d 1113, 59 N.M. 274

Docket Number: 

State: new-mexico

Court: New Mexico Supreme Court

Date: 1955-04-15T00:00:00Z

Document:
282 P.2d 1113 (1955) 59 N.M. 274 CLARENCE G. BROWN AND GLADYS BROWN, HIS WIFE, PLAINTIFFS-APPELLANTS, v. CAVEN L. NEWTON AND MAURINE A. NEWTON, HIS WIFE, DEFENDANTS-APPELLEES. No. 5784. Supreme Court of New Mexico. April 15, 1955. Rehearing Denied May 11, 1955. *1114 McAtee & Toulouse, Albuquerque, for appellants. Rodey, Dickason, Sloan, Mims & Akin, Albuquerque, for appellees. LUJAN, Justice. This is a suit to cancel and rescind a written contract on the grounds of fraud and misrepresentation. The facts are that on May 18, 1951, the plaintiffs traded to defendants certain real estate located in Albuquerque, New Mexico, for a tourist or fishing camp located in Delaware County, state of Oklahoma. Both properties were incumbered by mortgages which were assumed by the respective parties. The record shows that during a visit to Neosho, Missouri, early in the month of February, 1951, Clarence G. Brown, one of the plaintiffs, saw an ad in a local newspaper of the town of Joplin, Missouri, advertising certain property for sale. On his return to Albuquerque, New Mexico, and on February 13, 1951, Mr. Brown wrote a letter to W.L. Snead, a real estate broker in Joplin, Missouri, telling him that he was interested in a farm or fishing camp on a lake or good river and stating that he had a home and income property in Albuquerque which he would trade. Mr Snead did not have that kind of property listed at that time, but later on he heard about the tourist camp from a friend and immediately contacted the Newtons, defendants herein, who wanted to sell their tourist camp. On March 29, 1951, Mr. Snead answered Mr. Brown's letter informing him that he had located something he might be interested in and that the owner of said property was particularly interested in Albuquerque property. He enclosed a description of the Oklahoma property. On April 1, 1951, Mr. Snead called on the Newtons and informed them that he had a prospect for their property. On April 3, 1951, Mr. Snead wrote Mr. Brown giving him more details on the Oklahoma property and requested additional information as to defendants' Albuquerque property. On April 5, 1951, Mr. Brown wrote Mr. Snead giving him detailed information about his property and made further inquiry about the Oklahoma property. On April 9, 1951, the defendants came to Albuquerque, visited the Browns and looked over their property. On April 14, 1951, Mr. Newton wrote Mr. Snead giving him the details of his trip to Albuquerque and indicating the possibility that a trade of the respective properties might be arranged. On April 17, 1951, Mr. Snead forwarded this letter to the Browns. On April 20, 1951, Brown arrived in Bernice, Oklahoma, for an inspection and examination of defendants' property. That evening Mr. Brown discussed with the Newtons the property owned by them. Later that evening Mr. Brown telephoned Mr. Snead at Joplin, Missouri, and asked him to come down to Bernice, Oklahoma, the next day. On April 21, 1951, Mr. Brown personally inspected and examined the property. After completing his inspection and examination he returned to the cabins, at which time Mr. Snead had arrived. Then, Brown, Newton and Snead made an inspection trip around the premises. Upon their return to the cabins all three discussed the feasibility of a trade. And, after having decided to make a trade they entered into a memorandum agreement whereby the Newtons *1115 agreed to convey their property to the Browns and the Browns agreed to convey their property to the Newtons. On May 15, 1951, the Newtons left Bernice, Oklahoma for Albuquerque, New Mexico, arriving on May 17, 1951. On the same day the contract of exchange was drawn up by Mr. Cole, Browns' Albuquerque attorney, previously signed on May 12, 1951, by the Browns, was signed by the Newtons. On May 19, 1951, the Newtons took possession of the Albuquerque property and moved therein. On May 20, 1951, the Browns took possession of the Oklahoma property and moved therein. Thereafter the plaintiffs began to collect and retain the rents derived from the cabins. On June 22, 1951, Mr. Brown made a payment to the Farmers' State Bank in Afton, Oklahoma, on the mortgage on the Oklahoma property and also discussed with the banker, the possibility of borrowing money to improve the premises. On the same day Mrs. Brown wrote Mrs. Newton and asked her where to make a payment on the washing machine, which had been bought by the Browns from the Newtons as a part of the Oklahoma property. On June 26, 1951, Mr. Snead visited the Browns since he had heard from Mr. Newton that things were not running smoothly, but Mr. Brown informed him that he was satisfied with the deal and that he was going through with it. On July 2, 1951, Mr. Brown called Snead and told him that he was dissatisfied with the deal and asked him to come down to Bernice. He told him the lake was flooding the land and that the water was about to come into the cabins. On July 5, 1951, Mrs. Brown wrote Mr. Snead saying she was trying to work things out so that they could get a title to the Oklahoma property. On July 7, 1951, Mr. Snead drove down to Bernice and found that the Browns had gone away, leaving the premises in charge of one Mr. McCord under an arrangement whereby Mr. McCord, for his services, would keep one third of what came in from the rent of cabins. On July 9, 1951, the Browns called on the Newtons at Albuquerque and told them that they were going to back out on the deal, mentioning as one reason the existence of the flowage easement. That talk was the first time the flowage easement had been mentioned by the Browns. On August 13, 1951, the Browns instituted this action. Their complaint, among other things, alleged: The defendants filed their answer denying the allegations of the complaint and counterclaimed for specific performance and for damages. Upon the issues thus tendered, a trial was had, and the court, after hearing evidence, made and filed its findings of fact and conclusions of law, and entered its decree denying to plaintiffs the relief prayed for in the complaint; dismissed the action with prejudice and entered judgment for defendants on their cross-complaint. Thereafter plaintiffs filed a motion for a new trial which was denied and they prosecute this appeal. Many errors are assigned which are argued under six points. However, we believe that the decisive question on this appeal is, whether or not the plaintiffs by their actions and conduct ratified the exchange contract with full knowledge of all claimed defects, thereby waiving any right they might have had to rescind the same. The evidence shows that the negotiations between the parties for the exchange of their respective properties continued some forty days before the trade was finally consummated; that Mr. Brown not only had full opportunity to, but did actually inspect the Oklahoma property; and had detailed information from his Oklahoma attorney regarding defendant's property before entering into said contract. On May 18, 1951, Mr. Herman Merson, Brown's Oklahoma attorney, wrote him the following letter: Although the above opinion was not actually received by Mr. Brown until May 25, 1951, after he had taken possession of the Oklahoma property, the information contained *1118 therein was transmitted to him by phone the day before the exchange contract was entered into, and he knew all about the existing easements of which he now complains. He testified: Any delay on the plaintiff's part, after receiving the information given them by their Oklahoma attorney regarding the title to the property in question, together with their remaining in possession thereof and treating it as their own, evidenced an intention on their part to abide by the exchange contract, and therefore forfeited any right to rescind the same. Their entire conduct from the time they took over said land up to and until they moved away therefrom shows that they were satisfied with the deal, and that, if they ever had a right to rescind the contract, they deprived themselves of their remedy by their acquiescence. In this connection the court found: Based upon the above findings the court concluded: It is unnecessary for us to quote the evidence, suffice it to say that we have carefully examined the record and conclude that there is sufficient evidence of a substantial nature to support the findings made by the court and the conclusions of law based thereon. Therefore, they will not be disturbed *1119 by us. Citations to support this elementary proposition are unnecessary. We are of opinion, and so hold, that under the circumstances in the instant case, the contract was ratified expressly as well as by conduct. Armijo v. Nuchols, 57 N.M. 30, 253 P.2d 317. The case of Agnew v. Landers, not yet officially reported, relied on by plaintiffs to support their contention is not in point nor controlling in this case. The factual situation as well as the conduct of the parties in that case were entirely different from what we have in the case at bar. Plaintiffs also contend that the court erred in awarding damages to defendants in the manner it did and that the defendants should have mitigated the damages. The position of the plaintiffs seems to us to be untenable. The very purpose of allowing damages for breach of contract is to restore to the injured party whatever he has lost by the breach, and all that he, in reasonable probability, would have gained had there been no breach. Miller v. Robertson, 266 U.S. 243, 45 S. Ct. 73, 69 L. Ed. 265. It is well settled, when there has been a delay in the completion of a building or performance of the work, there being no extension of the time or waiver, the rental value of the premises is the true measure of damages. Price v. Van Lint, 46 N.M. 58, 120 P.2d 611. Evidence was given tending to show that the cost of completing the construction of the triplex was $1,850 and that the rental loss of the plaintiffs, by reason of their inability for a period of twenty four months to occupy the premises, amounted to $5,400 or $225 for each month's delay. In Warren v. Stoddart, 105 U.S. 224, 26 L. Ed. 1117, the rule regarding mitigation of damages is stated as follows: But in the case at bar the defendants had no control of the premises because the plaintiffs had a receiver appointed over their objection, nine days after suit was filed, to take exclusive possession of and to operate the premises, and thereby, under such circumstances, prevented any mitigation of damages by defendants. 17 C.J. 767, § 96; 25 C.J.S., Damages, § 33. Other propositions are raised and argued under this point but we find them without merit. Other errors are assigned and argued but in view of the conclusions reached we find it unnecessary to determine them. The appellees also suggest in the closing part of their brief that the damages awarded are too low, especially as to loss of rentals, but the assertion was not reserved below and has no place here. It follows from what has been said that the judgment should be affirmed with costs and the cause remanded to the District Court to render judgment against the sureties on the supersedeas bond. It is so ordered. COMPTON, C.J., and SADLER, McGHEE and KIKER, JJ., concur.