Opinion
May Term, 1819.
From Person.
Assessment of damages in case of eviction.
A. sells to B. three six hundred and forty acre tracts of land, and conveys with special warranty, and covenants that if B. shall lose; the land by reason of a better title being in some other person, he will restore the purchase money with interest, and in proportion should he lose any part thereof. Each tract, although containing the same number of acres, is of different value. B. is evicted from one of the tracts by a better title. The rule to be observed in assessing damages in this case is, that.
1. The whole of the three tracts are to be valued in gross at the price paid for them by the vendee;
2. The relative value of the tract lost to the value of the whole, is then to be ascertained; and the amount of this relative value with interest thereon, is the amount of compensation to which the vendee is entitled for his loss.
This was an action of covenant, and the question was, upon what principle damages should be assessed. The case was, that William Shepperd, on the first day of February, 1802, executed to William Cocke an obligation in the following words, to-wit:
"Know all men by these presents, that I, William Shepperd, of Orange County, North Carolina, am held and firmly bound unto William Cocke in the just and full sum of £ 1333 6 8: To which payment well and truly to be made, I bind myself, my heirs, executors and administrators, firmly by these presents.
"The conditions of the above obligation are such, that whereas the above bound William Shepperd hath this day given a special warranty deed for three six hundred and forty acre tracts of land, situate, lying and being in the State of Tennessee, in Sumner county, on the waters of Hickman's creek, for which the said William Cocke hath this day paid him the sum of six hundred and sixty-six pounds, thirteen shillings and four pence: Now if it shall hereafter appear that any other person has a better right than the said Cocke, and in consequence of such better right, he shall lose the land, then the said Shepperd is to pay to said Cocke the above sum of £ 666 13 4, with lawful interest from this day; and in proportion should he lose any part thereof: Then the above obligation is to be void, otherwise to remain in full force and virtue. Witness my hand and seal this 1 February, 1802. (527)
WILLIAM SHEPPERD, (SEAL.)
Teste: H. SHEPPERD."
The declaration charged, that another person to-wit: James Mulherin, had on the 1st day of February, 1802, a better right than either William Cocke or William Shepperd to one of the 640 acre tracts; and that in consequence of such better right, Wm. Cocke had lost the said tract. The Defendant pleaded that "he had not broken his covenants, and that the conditions had been performed."
The Jury found that there was a breach of the covenants as to one of the tracts of land, which William Cocke had lost by a better title thereto being in James Mulherin on 1 February, 1802. They further found that the Defendant, Shepperd, had performed the conditions contained in his obligation, by paying to the Plaintiff the sum of 437 l. 10 s. as and for the price of the land so lost.
Upon the trial, the Plaintiff proved that the value of the tract of land lost was on 1 February, 1802, one dollar per acre; and the value of the other two tracts mentioned in the obligation was, on that day, one, thirty-seven and a half cents, the other, twenty-five cents per acre. That at the time of bringing this suit, the value of the tract lost was five dollars per acre, and the value of one of the other tracts was one dollar and twenty-five cents, and the other, fifty cents per acre.
Neither Shepperd nor Cocke had seen the lands before 1 February, 1802, and both were ignorant of their quality. Upon these facts, the Plaintiff's counsel moved the Court to instruct the Jury that the Plaintiff was entitled to recover such a portion of the purchase money, with interest, as the value of the tract lost bore to the value of the other two tracts, at the time of commencing this suit. The Court refused to give such instructions; and thereupon it was prayed that the Court would instruct the Jury that the Plaintiff was entitled to recover, by way of damages, such a (528) proportion of the purchase money as the value of the tract lost bore to the value of the other two tracts on 1 February, 1802. This was also refused; and the Court instructed the Jury that the Plaintiff was entitled to recover so much of the purchase money, with interest, as the quantity of land lost bore to the quantity in the other two tracts, to-wit: one-third part; and it appearing that Defendant had made payment to the Plaintiff of this amount, the Jury found, as to this point, for the Defendant. A rule for a new trial was obtained by the Plaintiff; which being discharged, he appealed to the Supreme Court; and the Judges here were divided in opinion: HALL and HENDERSON, Judges, being of opinion that the presiding Judge had erred in instructing the Jury, and that the rule for a new trial should be made absolute. TAYLOR, Chief Justice, contra.
I have no hesitation in saying, that where a bargainee is evicted of part of the land which he has purchased, he is entitled to recover the value of such land, reference being had to its value at the time of the purchase. Thus, if A. purchase a tract of land of B. for one hundred dollars, and fifty acres of the tract be worth one dollar and a half per acre, and the other fifty acres be worth fifty cents per acre, and A. be evicted of the first fifty acres, he shall recover one dollar and a half per acre; and if he be evicted of the other fifty acres, he shall recover only fifty cents per acre, if the value of the whole land purchased was at the time of the purchase, one hundred dollars. At first, I doubted what the contract between the parties in this case really was: on consideration, however, it appears to be, that in case of eviction, by a better title, of the whole of the land sold, the purchase money, with the interest, should be returned; and the words "and so in proportion, should he lose any part thereof," mean value as well as quantity, and therefore, that the Plaintiff is entitled to recover the value of the land lost in reference to the money (529) given for the whole: that is, if the value of the land lost be less than the average value of the other two tracts, the Plaintiff should recover less; if more, he should recover accordingly. I think the rule for a new trial should be made absolute.
I think the bond is a mere contract, or bond of indemnity, and that all that can be claimed under it is compensation for the value of the land lost by a better title, valuing the whole land at the price mentioned in the bond, and the part lost by its relative value thereto. As to the words "and in proportion should he lose any part thereof." I understand them to mean only, that if a part should be lost, (a whole loss being provided for before,) the part lost should be valued in relation to the value fixed on the whole. A contrary construction might lead to very unjust results. For the part lost might be entirely barren; and although it might be half of the quantity of land sold, the real injury might be inconsiderable; yet one half of the purchase money must be returned. And so vice versa, the valuable part of the land might be lost, and only one half of the purchase money be restored. This would be giving to the bond a construction very different from that of an indemnity. Nor does it make any difference that neither of the parties had ever seen the lands, or knew where the title was good and where defective: they acted on their knowledge, or their supposed knowledge, of the general value of the land in that country: they knew that some tracts were better than others, and parts of those tracts better than other parts. When lands are bought or sold by the acre, it rarely happens that each acre is of the same value. The average value of each acre governs the parties, and in this way the value of the whole tract is ascertained. I think the Jury were wrongly instructed, and that the rule for a new trial should be made absolute.
I think it a material part (530) of this case, that neither of the parties knew anything about the quality of any part of the land. It lay in a distant country, and the value of any one tract, rather than of the others, formed no inducement to the purchaser. If there had been a general warranty in the deed, Cocke could have recovered only the price paid in proportion to the land lost, and interest upon that sum; according to the rule, that if upon a contract for the purchase of land the title prove bad, and the vendor is, without fraud, incapable of making a good one, the purchaser is not entitled to damage for the fancied goodness of the bargain he supposed he has lost. 2 Black. 1078. The decision of this Court, too, in the case of Philips v. Smith, limits the recovery to the price fixed on by the parties, and interest on that sum.
But it appears to me that this case is still stronger against the Plaintiff, than if an action had been brought on a warranty in a deed; for the parties here have not left the sum to be recovered, to implication or the effect of any general rule of law, but have incorporated the principle, by which a reimbursement shall be adjusted, into the condition of the bond. "If it shall appear hereafter that any other person should have a better right to these lands than Cocke, and he should lose them in consequence of such better right, then Shepperd is to pay back the purchase money, and in proportion should Cocke lose any part of the land." The number of acres sold was nineteen hundred and twenty, of which, one-third has been lost, and for which Cocke is entitled to a reimbursement of one-third of the purchase money, with interest. This rule is calculated to work both ways, and appears to me most equitably adapted to the circumstances of this case. It is one under which the Plaintiff would certainly have sought shelter, had Mulherrin's title covered the tract which the Jury have valued at twenty-five cents per acre, instead of that which they have valued at a dollar.
The price actually paid for the land was at the rate of sixty-nine cents and four-ninths per acre; (531) whereas taking the average value of the several tracts when the contract was made, the value of each acre would be but fifty-four cents and one-sixth per acre; and either this latter sum of twenty-five cents per acre, must have been the amount of the Plaintiff's recovery, upon his own principles, in the event of his having lost the poorest tract. If in the supposed event, it would have been unjust to allow the Plaintiff less than he paid, which I think it would, it must be equally so, to make the Defendant pay more than he received, in the event which actually has happened.
Nelson v. Matthews, 2 Hen. and Mumf. 164, the general rule is laid down, that if several tracts of land be sold as adjoining each other for a gross sum, and no specification be made at the time of the contract of the quality or separate value of each parcel, and there be a deficiency in the quantity of each, the purchaser will be entitled to compensation for such deficiency, according to the average value of the whole tract, and not of the several tracts taken separately. In giving the reasons why the case under consideration should be governed by the general rule, Judge Roane observes, that the purchaser does not state that the lost land formed a particular inducement with him to make the purchase: on the contrary, he had never viewed the land, but relied on the information of the seller as to quantity and boundaries; he neither asked nor received any information as to quality and description: he submits, therefore, in case of deficiency, to stand upon the general ground, which is a safe one, as it gives the average value of an article purchased in gross. Whereas, when an enquiry is made into the relative value, a very extensive field is entered into, where much is left to opinion, and in which there are no certain. data to go by.
It will readily be admitted that many cases may be stated, wherein the application of this rule would be altogether unjust; as where a purchaser is evicted from (532) the most valuable part of a tract of land, as a meadow connected with a barren field; one acre containing expensive improvements, connected with a tract of little or no value; or the only woodland belonging to a plantation, and essential to its support. When the purchaser knew the land, or it was described to him at the time of the sale, it may reasonably be presumed, that the valuable part of the tract formed an inducement with him to make the purchase; and therefore he ought to be compensated for the relative value of the land lost. 5 Johns. 57. But considering, together, the contract in this case, the ignorance of the parties as to the value of the land, and the absence of all unfair dealing in the seller, I am unwilling to disturb the verdict. (533)