Opinion ID: 1246023
Heading Depth: 1
Heading Rank: 6

Heading: Compensation to Couturier.

Text: Couturier contends, and Holmes agrees, that the court erred in setting $400 a month as the value of Holmes' possession and use of the Campground. Couturier claims the amount is too low, while Holmes claims it is too high. Holmes also concedes that remand is necessary because no evidence on this point was presented at trial. A judgment of rescission should require plaintiffs to account and pay for the reasonable value of their use, occupation and possession of the [property] ... as an offset against their right to recover payments made under the contract. Halvorson v. Birkland, 84 S.D. 328, 333, 171 N.W.2d 77, 80 (1969). When rescission is granted on the basis of fraud, the reasonable value of the use, occupation, and possession of the property is measured by the lesser of net profits or rental value. As explained in 1 G. Palmer, The Law of Restitution § 3.14 at 319 (1978): [A] purchaser who has gone into possession will be held accountable in some manner for his use of the land, frequently by deduction of its reasonable rental value. If the subject matter of the sale was a business interest, for example a restaurant, the maximum benefit to the purchaser consists of his net profits from the operation of the business. He should never be held accountable for net profits in excess of rental value.... [I]f the net profits are less than rental value, he will be held accountable only for such profits. Or if there are no profits, there will be no deduction from his recovery. (footnotes omitted); see also LeTrace v. Elms, 40 Or.App. 561, 564, 595 P.2d 1281, 1282 (1979) ([B]uyers were only chargeable to the extent of the benefit actually derived from the use of the land during their occupation.). When commercial property includes residential housing, as here, separate values should be determined for each aspect of the property. Since the court did not have evidence of rental values or Holmes' net profits, we remand for determination of the value of Holmes' occupation and use of the Campground.