Opinion
42442.
ARGUED NOVEMBER 9, 1966.
DECIDED DECEMBER 2, 1966.
Action on contract. DeKalb Civil and Criminal Court. Before Judge Mitchell.
Peek, Whaley Blackburn, Benjamin B. Blackburn, III, Glenville Haldi, for appellant.
Lewis, Lewis Cagle, Robert W. Cagle, for appellees.
1. There was no error in overruling the general demurrer to the petition.
2. Where a seller of realty agreed to construct thereon a house for the purchaser in accordance with a certain plan, and at the time appointed for closing the sale the purchaser presented the seller with a list of items in the construction which he contended had not been completed in accordance with the plan and demanded that these be completed before closing, and the seller agreed to complete the items and to permit $1,000 of the purchase price to be held in escrow as security for the completion thereof, the obligation of the seller to complete the items was a collateral agreement which survived the execution and delivery of the deed.
3. While the measure of damages which the purchaser is entitled to recover is the difference in the value of the property as delivered and the value it would have had if completed according to contract, proof of that damage can be made by showing the reasonable cost of completion.
ARGUED NOVEMBER 9, 1966 — DECIDED DECEMBER 2, 1966.
Mr. and Mrs. James W. Black agreed to purchase a lot from Floyd H. Wilson, he agreeing to construct thereon a house for them according to a certain plan by which another house had been completed on the adjoining lot, all for the sum of $27,700. The house was substantially completed, and the Blacks moved into it two days before the closing of the purchase and sale. An appointment was made by the parties to meet in the office of an attorney who would prepare all necessary documents for closing, including the warranty deed and closing statement. When they met in his office the purchasers presented the seller, Mr. Wilson, with a list of items which they asserted had not been completed in the construction of the house and demurred to closing the transaction until the completion should be accomplished. Mr. Wilson then denied that he was obligated to perform these items, and the parties left without closing. Three days later another appointment was set up at the attorney's office. The attorney testified that when the parties met at his office the purchasers had the list of items (whether the same list as on the previous occasion, he did not know) and that the purchasers indicated a willingness to go ahead with the closing if the seller would escrow $1,000 with him as security for the seller's completion of the items, to which the seller agreed.
One thousand dollars of the purchase money was shown on the closing statement as being held by the attorney, and he testified that this sum was to be released to the seller upon receiving from the purchasers authority to disburse it — which he understood would occur when the seller had satisfactorily completed the items. At the time of the trial he had not received authority to disburse the money and was still holding it. No written agreement or memorandum of agreement was prepared by or for the parties relative to the completion of the items.
Plaintiff alleged that the items were to be completed within two weeks after the closing. Defendant denied it. The closing was accomplished June 12, 1964. Suit was brought September 14, 1964, alleging that the seller-defendant had failed and refused to complete the items, save a small number, and that the market value of the house and lot was decreased by the sum of $2,618.00.
Estimates of the cost of completing the items were obtained from people in the construction business, and those who made the estimates testified on the trial.
A verdict was returned for the plaintiff in the sum of $1,650, and the seller-defendant appeals from a judgment entered thereon, the overruling of a general demurrer to the petition, the overruling of a motion for judgment n.o.v., and the overruling of an amended motion for new trial.
1. There was no error in overruling the general demurrer. McKee v. Cartledge, 79 Ga. App. 629 ( 54 S.E.2d 665); Kollen v. High Point Forest, 104 Ga. App. 713 ( 123 S.E.2d 10). The allegations meet the tests of the majority and the dissenting opinion of Judge Frankum in Knight v. Hedden, 112 Ga. App. 847 ( 146 S.E.2d 556) and Parrish v. Waters, 113 Ga. App. 593 ( 149 S.E.2d 179).
2. We think it clear that the obligation of the seller to complete the items presented by the purchasers at the time first scheduled for closing survived the execution and delivery of the warranty deed.
Plaintiff alleged and contended that the seller-defendant agreed, at the time of closing, to complete the items within 10 days — which he denied. However, there is a compelling reason why it is apparent that there was an agreement to complete the unfinished items and that the parties intended it should survive the execution and delivery of the deed. The jury was authorized to find, from the testimony of Mr. Brannon, the closing attorney who served as an escrow agent for the parties, that $1,000 of the purchase price was escrowed as security to the purchaser that the work would be performed, and that it did not represent the estimated cost of the uncompleted items. It was not held as liquidated damages.
When the seller failed to perform his agreement to complete the items, either within the 10 days or within a reasonable time after the closing, the purchaser was authorized to bring this action.
3. The proper measure of damages is the difference in the value of the house as delivered and the value it would have had if completed in accordance with the contract. Kendrick v. White, 75 Ga. App. 307, 310 ( 43 S.E.2d 285); McKee v. Wheelus, 85 Ga. App. 525, 528 ( 69 S.E.2d 788); Allied Enterprises, Inc. v. Brooks, 93 Ga. App. 832, 833 ( 93 S.E.2d 392); Spielberg v. McEntire, 105 Ga. App. 545 ( 125 S.E.2d 134). This measure has been used in the allegations of the petition.
The evidence upon trial was largely as to the matter of what a reasonable cost would be for the completion of the uncompleted items, and we think this evidence was ample to enable the jury to reach a verdict reflecting the difference in value. There was proof of the cost of the property to the purchaser under the contract of sale, and the seller testified that in his opinion it was worth more than the selling price. "Value may be shown by the testimony of experts, or by other testimony as to the nature of the injuries sustained and as to the material and labor supplied; and testimony as to the actual cost is admissible, such cost being a circumstance which may be considered by the jury in determining such value, under their right to weigh all the facts and circumstances bearing upon that question, and to form their own judgment on the data in evidence." Lamon v. Perry, 33 Ga. App. 248, 249 ( 125 S.E. 907). And see Padgett v. Williams, 82 Ga. App. 509 ( 61 S.E.2d 676); Globe Motors v. Noonan, 106 Ga. App. 486, 490 ( 127 S.E.2d 320). There was evidence that the estimates of the cost of completion as testified to by people in the building trade were reasonable, and the total of the estimates for all items was only a fraction of the purchase price or of the value placed on the property by the seller in his testimony.
While Lamon, Padgett and Globe Motors are cases dealing with repairing damage sustained to an automobile, we can see no logical reason for not applying the rule in the situation before us. The actual cost of completing the items, or the estimate of the cost for doing so by people in the business, is much more likely to represent the true damage suffered from the failure of the seller to complete his contract than would the opinion of an expert in real estate as to the difference in values, though that proof would certainly have been acceptable. Proof of the cost of repairing a house because of faulty construction has been held illustrative of the difference in the value claimed as damages. Spielberg v. McEntire, 105 Ga. App. 545, 550, supra. "Where the defects in the house as constructed may be remedied at a reasonable expense, it would be proper, we think, to deduct from the contract price the sum which it would cost to complete it according to the requirements of the plans and specifications." Small v. D. J. Lee Bros., 4 Ga. App. 395, 397 ( 61 S.E. 831). And it has been held that where the owner of a house contracted for the installation of a heating system of a certain character and quality and the system installed was inferior, "the measure of the owner's damage is the sum required to make the plant conform to the specifications fixed by the contract." Dornblatt v. Carlton, 10 Ga. App. 741 ( 73 S.E. 1085).
The proof here was sufficient to authorize the verdict. No error appears in the overruling of the motion for judgment notwithstanding the verdict or of the motion for new trial.
Judgment affirmed. Bell, P. J., and Jordan, J., concur.