Opinion
Page __
__ Cal.App.2d __252 P.2d 1009COUGHLIN et ux.v.BLAIR et al.Civ. 19205.California Court of Appeals, Second District, Third DivisionFeb. 11, 1953Hearing Granted April 8, 1953.
[252 P.2d 1010] Charles Reagh, San Francisco, for appellants.
Krystal & Paradise, Robert E. Paradise, Los Angeles, for respondent.
SHINN, Presiding Justice.
On May 30, 1948, Louise Blair was the owner of a building lot of irregular shape containing one and a fraction acres on a hilltop in the Hollywood hills. The lot was a portion of a much larger tract owned by Louise Blair which she intended to subdivide into lots, to be known as Tract 15175, in which the parcel in question would be known as lot 7. On that day she agreed to sell plaintiffs the lot, together with a nonexclusive easement for ingress and egress over lands lying between the lot and a public road (Nichols Canyon Road) a distance of about 3725 feet. The agreement of sale disclosed on its face that Louise Blair was the seller and it was signed on her behalf by John H. Blair who subscribed his name opposite the word 'Agent.' Plaintiffs subscribed their respective names upon separate lines opposite which appeared the word 'Purchaser.' Mrs. Blair did not sign the agreement. The writing read, in part, as follows: 'Gas & pavement & elec. to be put at no cost to buyer within 1 yr. from above date. Also to be surveyed by John H. Blair at once.' Plaintiffs paid $1,000 down and $13,000 through escrow with Mrs. Blair, to which Mr. Blair was not a party, and they received a deed from Mrs. Blair. Mrs. Blair died March 10, 1951. In the preceding December she had deeded to Marion Blair Conger real property of which lot 7 was a part, and Mrs. Conger agreed in writing to assume Mrs. Blair's obligations to plaintiffs arising out of the agreement of sale. Mrs. Conger was substituted as a party defendant as the successor in interest of Mrs. Blair. One year after the date of the agreement the paving had not been done and neither gas nor electricity had been brought to lot 7. The present action is for damages for breach of the agreement to pave the road and install the utilities. On the date of the agreement there was an unpaved dirt road leading from Nichols Canyon Road to the lot and it was over this road that the easement extended. On May 30, 1949, gas and electric utilities had not been installed over any part of this dirt road, nor had any part of the road been paved. Plaintiffs instituted this action May 24, 1950. By the time of trial, April, 1951, about 1200 feet of the road commencing at Nichols Canyon Road had been paved but there remained approximately 2525 feet of the road leading to the lot which had only temporary pavement consisting of gravel [252 P.2d 1011] rolled in hot oil. A gas line had been brought one-third of the way to lot 7. Electric service had been brought to the lot. In addition to the facts above related the complaint alleged that Mr. and Mrs. Blair, then named as defendants, knew that plaintiffs intended to build a residence on the lot within one year, provided the paving was installed and the utilities brought to the lot. It was alleged that plaintiffs became indebted to an architect in the sum of $1,600 for preparation of plans and specifications for construction of a $40,000 residence and that plaintiffs were living in a home which they owned in Beverly Hills, which they contemplated selling to help finance the new residence. By their complaint they sought damages of $31,800. They alleged that the lot without the improvements was worth $2,500 and with the improvements $14,000 and on this theory of recovery they claimed damages of $11,500. They alleged that the reasonable rental value of their new home would have been $600 per month and upon this account they claimed $7,200 as damages for the year immediately following the breach of the agreement, namely, to May 30, 1950. They alleged that their residence in Beverly Hills had decreased in value during the same period in the amount of $7,500, that the cost of building a $40,000 residence had increased $4,000, and for these two items they sought $11,500 as damages. The defendants were not accused of having wilfully breached their contract and no punitive damages were sought.
The court found that both John H. Blair and Louise Blair were the sellers of the property and agreed to do the paving and install the utilities. It was also found that Marion Blair Conger, by stipulation filed in the case, had assumed the obligations to plaintiffs of Louise Blair. Judgment was rendered against John H. Blair and Marion Blair Conger for the sum of $15,550.37 with interest from November 9, 1951. This total was made up of the following items of damage, namely: $9,500 as the difference between the market value of the lot without paving or utilities and its value with the paving and utilities as of May 30, 1949; $3,750 as the increase in the cost at the time of trial of building a house of 1,500 square feet above the cost of such a house on May 30, 1949; $2,300.37 as the value of the loss of use of $14,000 from and after May 30, 1949 to the date of trial.
We cannot discern in the findings the theory upon which the award of $9,500 was made, nor way factual basis for it. No invariable rule can be formulated which will determine whether diminution of market value is a proper basis for the award of damages. There are too many and too widely different situations to permit of such a rule. The essential facts of each case must be established before it can be known whether loss in market value, or some other consideration is the proper measure of damage. It is clear, however, that whenever loss in market value is used it must appear that the condition which caused the injury is, in a practical view, a permanent one. No facts were found which would meet this test.
As we understand the theory of plaintiffs it is immaterial whether the improvements will probably be installed by defendants, and the full value of the lot restored thereby. This theory has no support in authority nor can we subscribe to it. The complaint did not allege, nor did the court find, that defendants could not or would not install the paving and the utilities. Water had already been brought to the property. As the time of the trial temporary pavement was in, electricity had been brought to the lot, a gas line had been laid part way and was then being extended. Mr. Blair testified without contradiction that he was financially able to complete the improvements and there was much evidence that he, and Clarence W. Coughlin as well, had been dealing with utility companies to hasten the installations. All that remained to be done was to bring the gas line the remainder of the way and to add permanent paving to the temporary paving.
Mr. and Mrs. Blair acquired a large tract of hill land in 1923. Much of it has been subdivided and a considerable part of it remains to be disposed of. A map of a proposed subdivision in which lot 7 is located had been prepared before the sale [252 P.2d 1012] to plaintiffs. We have been referred to no evidence, and find none, which indicates that the condition of which plaintiffs complain is a permanent one or that their property has suffered a permanent depreciation in value. Neither the record nor the brief of respondent discloses any claim made that the improvements contracted for will not be installed. Upon the contrary, plaintiffs say in their brief: 'Any further installation of utilities or pavement which might be performed by appellants after the Judgment, promoted by their self-interest in the sale of other lots in the area or for other reasons, would be entirely voluntary on their part.' It thus appears that plaintiffs do not see that they would gain unduly by having both the improvements and full damages on the theory tht they would never get them. We cannot agree.
Where injury to real property has occurred through a condition which is easily subject to correction, depreciation in the market value is not a proper measure of damage unless the condition is found to be a permanent one. A finding on that issue was imperative. In Spaulding v. Cameron, 38 Cal.2d 265, 239 P.2d 625, the damaging condition was the existence of a dirt fill which had to some extent invaded plaintiff's property and threatened further damage unless it was removed or confined. The trial court had not determined that the condition could not or would not be corrected but nevertheless granted large damages consisting of the depreciation in market value which would be suffered if the condition should not be corrected. It also ordered defendant to remedy the condition. In reversing the judgment the court held, (1) unless the condition which affected the value of plaintiff's property was a permanent one depreciation in market value was not a proper basis for an award of damages, and (2) the judgment for damages in the amount of the claimed depreciation in market value and an injunction requiring the defendant to correct the condition in order to prevent permanent injury allowed a double recovery. Such is the case here. As in the Spaulding case something could be done by defendants to correct a condition that will permanently depreciate the market value of plaintiffs' property if it is not corrected. The trial court did not find, and it does not appear as a matter of law, that the property of plaintiffs will not be supplied with the facilities which defendants agreed to provide. Plaintiffs' claim of damage consisting of loss in market value cannot be adjudicated until it is determined whether the condition which affects the market value at present is a permanent one. It is a factual question whether the depreciation in value is permanent.
In another respect the holding in Spaulding v. Cameron is applicable. The present judgment allows a double recovery. When plaintiffs sued for the loss in market value they thereby accepted the absence of the paving, gas and electricity as a permanent condition, and when damages were allowed as of the date of the breach of defendants' obligation, the award was a substitute for performance by defendants. They were under no duty to pay damages on the theory they would never put in the improvements and also a duty to put them in at some future time. Plaintiffs say that if they should be installed by defendants after the date of the judgment the action would be 'entirely voluntary on their part.' In other words, defendants would not be required to install them if they should pay the damages of $9,500. We agree. But the judgment does not follow that pattern. It awards damages upon conflicting and inconsistent theories. Notwithstanding the allowance of full compensation as damage for failure to make the improvements, the judgment holds defendants to a continuing duty to make them, in that it also awards damages to the time of trial for loss of use due to the absence of the facilities. Thus, if defendants should satisfy the judgment of $9,500 for loss in market value, they would still be under a continuing duty to pay for loss of use of the property until they did what was necessary to make it usable. This type of compulsion would operate upon them as effectively as would an injunction which required them to furnish the facilities.
For the reasons stated in Spaulding v. Cameron, supra, plaintiffs had an election to sue for damages on the theory that [252 P.2d 1013] their property had been permanently injured or to bring one or perhaps more actions for damages, treating the injury to be of a temporary character. They could not do both, as they have attempted to do. Their position cannot be justified by merely calling the award for loss in market value general damages, and for loss of use special damages.
We cannot agree with defendants that their sole liability is for loss of use of the land while plaintiffs are deprived of the facilities. Under proper circumstances increased building cost above the cost at the time of the breach would be recoverable as damages proximately resulting from the breach.
Plaintiffs were entitled to recover an amount which would compensate them for all the detriment proximately caused by defendants' breach, or which, in the ordinary course of things, would be likely to result therefrom. Civ.Code, § 3300. Compensation may be recovered for detriment due to special circumstances which were known to the parties, if it appears that at the time of the contract it was within the reasonable contemplation of the parties that such detriment would probably result from a breach of the contract. Williston on Contracts [Rev.Ed.] § 1356, p. 3805; 25 C.J.S. Damages, § 24, p. 484; Overstreet v. Merritt, 186 Cal. 494, 200 P. 11. The court allowed $3,750 as the increased cost of a house having 1,500 square feet upon the theory that this would be a 'minimum' house under defendants' proposed building restrictions. The correctness of this theory is not here in question. Defendants complain only of any allowance for increased cost. Before any such award may be made facts would have to be established which would call for the application of the rule of special damages above stated. Plaintiffs, not having appealed, accept the 'minimum' house theory.
The allowance for loss of use was in the amount of interest at seven per cent upon plaintiffs' investment in the lot. Since neither party questions loss of use of the money as a proper measure of damages for loss of use of the property, we express no opinion on that point.
Defendants assign error in awarding judgment against Mr. Blair for the reason that he acted only as agent for his wife and assumed no personal responsibility. We think there was no error. It was a question of fact for the trial court whether in signing the agreement Mr. Blair made himself a party to the contract. It was a question of the intention of the parties to be derived not alone from the writing itself, but also from the express and implied representation of Mr. Blair considered with the other circumstances surrounding the transaction. There was ample evidence to support the finding that both Mr. Blair and the plaintiffs understood that the former in signing the contract of sale was pledging himself to fulfill the obligations of the seller. He was the subdivider and conducted all the business. He signed the agreement; Mrs. Blair did not. He was not a broker nor did he execute the contract as attorney in fact for his wife. It cannot be held as a matter of law that Mr. Blair did not assume an obligation to have the road paved and the utilities installed.
During the trial Mrs. Conger entered into a stipulation with plaintiffs under which she was substituted for Mrs. Blair as a defendant and assumed the latter's obligations under the contract. It is contended on her behalf that judgment should not have been entered against her for the reason that she only assumed to pay and discharge 'any and all liabilities or obligations claimed or asserted by plaintiffs against defendants in the above entitled action, if and as adjudicated in this action.' Her point seems to be that Mr. Blair acted merely as agent and when plaintiffs joined him as a defendant they thereby released Mrs. Blair, and consequently appellant Conger, as her successor. Therefore, it is argued, the judgment should have been against Mr. Blair alone. One difficulty with the argument is that the court has found that Mr. Blair was a principal in the transaction, which eliminates the question of election. As we have seen, this finding has support in the evidence.
The judgment is reversed.
WOOD and VALLÉE, JJ., concur.