disappointed vendee recovered losses incurred on faith of an oral contract to purchase land
How later courts described this case
- disappointed vendee recovered losses incurred on faith of an oral contract to purchase land
Written by the judges who cited it.
The opinion
*515 SPAETH, Judge,
concurring and dissenting:
I agree with the majority that appellees are entitled to a verdict. However, I disagree with the majority’s decision to modify the verdict. In my opinion the lower court was correct in awarding appellees the $900 they spent in renting the cabin for four months.
It is settled that a court will not grant a party specific enforcement of an oral contract for the sale of real estate. Polka v. May, 383 Pa. 80 , 118 A.2d 154 (1955). However, the court will grant damages to a party who suffers losses on the faith of the oral contract. Polka v. May, supra; Rineer v. Collins, 156 Pa. 342 , 27 A. 28 (1893); Harris v. Harris, 70 Pa. 170 (1871). The purpose of permitting the action for damages is not to give a disappointed vendee the benefits of his oral bargain, for that would be tantamount to enforcing a contract that is unenforcible under the Statute of Frauds; rather, the purpose is to indemnify a vendee who has incurred losses in reliance on the contract. Rineer v. Collins, supra; Hertzog v. Hertzog’s Administrator, 34 Pa. 418 (1859). As the Supreme Court has said, “The vendor is to restore the vendee to the condition in which he found him, but he is not bound to compensate him for the value of the bargain.” Dumars v. Miller, 34 Pa. 319, 323 (1859). Thus, the vendee may not receive the benefit of his bargain but only may recover the consideration paid and the expenses incurred on the faith of the contract. Polka v. May, supra; Gray v. Howell, 205 Pa. 211 , 54 A. 774 (1903); Rineer v. Collins, supra; Fry v. Flick, 10 Pa.Super. 362 (1899). Accordingly, while monies spent for title searches, ground tests, counsel fees, and other expenses connected with the purchase may be recovered, see Polka v. May, supra; Eberz v. Heisler, 12 Pa.Super. 388 (1900); see also Bitner v. Brough, 11 Pa. 127 (1849), a claim for the excess of the value of the property over the purchase price will be denied, Polka v. May, supra; Seidlek v. Bradley, 293 Pa. 379 , 142 A. 914 (1928). This is not to say that a vendee may never receive the benefit of his oral bargain, however, for, as the majority notes, if the vendee can show actual fraud by the vendor *516 reaching back to the original contract, his right to damages may be enlarged to include the loss of his bargain. Seidlek v. Bradley, supra; Rineer v. Collins, supra.
Whether there was fraud by Mrs. Rahon in the original contract in this case need not be discussed, for appellees’ claim for the $900 excess rental expenses does not represent a claim for the loss of a bargain but, instead, a claim for expenses incurred in reliance on the contract. The majority, however, states that the excess rental expenses were not incurred in reliance on the contract, citing in support of this conclusion the fact that Mrs. Rahon informed appellees in February 1978 that she would not comply with the contract.
I fully support the general proposition that a vendee may not recover as damages any expenses that he was not justified in incurring. Thus, if the vendee is informed that the vendor will not perform, he should avoid incurring any expenses that he may reasonably avoid. In the present case, however, there has been no violation of this general proposition, for in the circumstances, the excess rental expenses could not reasonably have been avoided. If Mrs. Rahon had informed appellees of her breach before they had sold their home, appellees would have had a choice either to remain in that home or to proceed with the sale and move out. However, appellees sold their home and moved into the cabin in December 1977. When Mrs. Rahon told them, in February 1978, that she was not going to comply with the contract, they could not return to their home. They had to live somewhere. But for Mrs. Rahon’s breach, they would have been living in a home they themselves owned, either their old home, or the new one they planned to build on her lot, and not in a rented cabin. Therefore, I believe that the excess rental expenses incurred were properly incurred in reliance on the contract. There is no suggestion that the length of the period for which appellees rented the cabin after notice of Mrs. Rahon’s breach and the amount of the rent they paid were not reasonable.
Accordingly, I should affirm the decision of the court below.