Opinion
February 28, 1966. —
April 12, 1966.
APPEAL from a judgment of the county court of Dane county: CARL FLOM, Judge. Affirmed.
For the appellant there was a brief by Orr, Isaksen, Werner, Lathtop Heaney of Madison, and oral argument by Trayton L. Lathrop.
For the respondent there was a brief and oral argument by William E. Sieker of Madison.
On June 20, 1960, John and Devota Meehan agreed to convey certain motel real estate located at Highway 12 and Parmenter street in the city of Middleton to appellant Mid-View, Incorporated (then State Discount House, Inc.). According to the description in the deed dated July 1st, the boundary of this property, insofar as relevant here, extended to the center line of Highway 12 and the land was warranted to be "free and clear from all incumbrances whatever, . . . except for rights of public in highway and street on easterly and westerly sides of premises." The property was valued at $78,000 for revenue-stamp purposes.
At the time of the sale, there were two Lannon-stone walls and a sign on the property facing toward Highway 12 and situated at a point 40 to 45 feet from the paved road. Each wall was approximately 20 feet long and four-to-five feet high, and was made up of two four-foot-by-four-foot pillars with a two-foot-wide connecting portion. The sign, which was 18 feet from the nearest section of the wall, was 11 feet wide and sat on a four-foot-square concrete base. Late in 1963 appellant, through an officer, learned that the sign base and the pillars on the walls encroached on the Highway 12 right-of-way for distances of from 2.24-2.35 feet and 1.56-3.35 feet respectively. The connecting portions of the walls also encroached. The district engineer for the highway commission testified that there were no present plans to ask for the removal of the encroachments. Although the parties knew of the wall sections and sign, at the time of the sale in 1960 they did not know of the fact of encroachment.
Appellant, after filing a claim against the estate of John Meehan on December 20, 1963, for violation of the incumbrance warranty, sold the property in September of 1964 for $110,300. Appeal is taken from a judgment entered September 7, 1965, disallowing the claim.
Assuming that the encroachment of the two walls and sign on the public right-of-way constitutes an incumbrance warranted against by the deed under which appellant Mid-View, Inc., purchased the property, the first and conclusive issue raised on this appeal is whether appellant has been damaged in any way by the encroachment. The trial court concluded that no damages had been proven. We agree.
A purchaser such as appellant can maintain an action for a breach of covenant against incumbrances, but only nominal damages can be recovered in the absence of an actual injury. The reason for this rule is that a covenant against incumbrances is considered to be a covenant of indemnity, and the purchaser cannot recover for an incumbrance until such time as he is hurt by its existence. If an injury results, the measure of the damages is the difference between the market value of the property with the incumbrance and the value sans the incumbrance. Appellant had no out-of-pocket expenses, was not forced to remove the structures, and failed to show that the 1964 sale price was in any way affected by the walls and sign, or that it suffered any other tangible injury.
Johnson v. Blumer (1924), 183 Wis. 369, 379, 197 N.W. 340, 198 N.W. 277; Gadow v. Hunholz (1915), 160 Wis. 293, 296, 151 N.W. 810; Estate of Hanlin (1907), 133 Wis. 140, 147, 113 N.W. 411.
Johnson v. Blumer, supra, footnote 1, at page 379.
Gadow v. Hunholz, supra, footnote 1, at page 298.
Appellant emphasizes the testimony of its real-estate expert to the effect that the encroachments diminished the value of the property on July 1, 1960, by $5,200. Actually, this figure represented his opinion of the cost of moving the walls and the sign off the right-of-way. Not only was this testimony flatly countered by three experts for respondent who felt that the market value was in no way decreased, but even assuming that the estimation is accurate, appellant did not suffer because it did not actually have to make any relocation.
We are satisfied that the trial court's finding (stated as a conclusion of law) of no damages is not against the great weight and clear preponderance of the evidence, and, for this reason alone, the judgment below should be affirmed.
We have assumed that the encroachments constitute an incumbrance. But do they?
Although this appears to be a question of first impression in Wisconsin, the rule elsewhere is that an encroachment amounts to an incumbrance if it is substantial. This rule is applicable to walls as well as buildings, and the property encroached upon can be public as well as private.
Generally see: Anno. 47 A.L.R.2d 331; 3 American Law of Property, p. 130, sec. 11.49; 2 Patton, Titles (2d ed.), p. 615, sec. 676.
Bier v. Walbaum (1926), 102 N.J.L. 368, 131 A. 888; Dukas v. Tolmach (1956), 2 App. Div. 2d 57, 153 N.Y.Supp.2d 392.
Carrick v. Gorman (1960), 232 Ark. 729, 340 S.W.2d 377; Vassar Holding Co. v. Wuensch (1926), 100 N.J. Eq. 147, 135 A. 88; Sinclair v. Weber (1954), 204 Md. 324, 104 A.2d 561; Brockton Associates, Inc., v. Weinbaum (1960), 23 Misc.2d 109, 198 N.Y.Supp.2d 675.
An encroachment occurs not only when a structure on adjoining property encroaches substantially on your property without the benefit of an appurtenant easement, but conversely, when a structure on your property encroaches upon the adjoining property without the benefit of such an easement. A warranty against incumbrances extends to both types of encroachment.
2 Patton, Titles (2d ed.), p. 616, sec. 676; 3 American Law of Property, p. 140, sec. 11.49.
In determining whether or not a substantial encroachment exists, the following factors are considered:
". . . the character or extent of the encroachment, the cost or possibility of its removal, the length of time the encroachment has continued, municipal acquiescence, or the like."
Anno. 47 A.L.R.2d 331, 335, sec. 2.
Although the trial court did enter a conclusion of law that the encroachment was not "an incumbrance which would constitute a title defect" within the meaning of the deed, it did not make any specific finding on whether or not the encroachment was substantial. In the absence of such a finding we draw no conclusion as to whether the encroachment was substantial.
The trial court, relying on Taxman v. McMahan, based its decision principally on the proposition that appellant is precluded from bringing suit because it knew the walls and sign existed. Taxman involved the purchase of certain property which was subject to three "right-of-way" type of easements and on which was located a party wall. The sellers were required to transfer title free of incumbrances and the buyer sought to avoid the sale because of the easements. This court held that an easement, which is known to the purchaser, is not an incumbrance. The instant case differs significantly from the situation in Taxman. Here, while appellant knew of the walls and the sign, it did not realize that they encroached upon the public property. In other words, if there is an alley, a party wall, or a similar physical condition on the property, the purchaser is bound to realize that an easement exists. But the mere knowledge of a structure does not, of itself, impart cognizance of an encroachment.
(1963), 21 Wis.2d 215, 124 N.W.2d 68.
Respondent also takes the position that since the only rights impaired by the encroachment are the rights of the public in the highway, and such rights were excepted from the warranty against incumbrances, there has been no breach of the warranty. We do not decide this question since the matter is adequately disposed of on other grounds.
By the Court. — Judgment affirmed.