Bumann v. Maurer
203 N.W.2d 434 (1972)
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Rule of Law:
The proper measure of damages for a seller's delay in conveying real property, where the conveyance is eventually completed, is the value of the use of the property for the period of the wrongful occupation, which can be measured by either the property's fair rental value or the profits the seller derived from it.
Facts:
- Henry and Alice Jean Bumann entered into an agreement to purchase real estate from Eimer and Dorothy Maurer.
- In reliance on the agreement, the Bumanns sold some of their own real property and terminated the lease on the farm where they were residing.
- The Maurers failed to convey the property to the Bumanns at the agreed-upon time.
- As a result of the delay, the Bumanns were forced to rent a smaller, less profitable farm to live on and operate.
- The Bumanns incurred additional expenses, including the costs of locating and moving to the smaller farm, and extra school transportation and tuition for their children.
- During the period of delay, the Maurers continued to wrongfully occupy and use the property they had contracted to sell.
Procedural Posture:
- Henry and Alice Jean Bumann (plaintiffs) sued Eimer and Dorothy Maurer (defendants) in the Kidder County District Court (trial court) for specific performance of a real estate contract and damages.
- The case was first sent to the Supreme Court of North Dakota on certified questions, which the court declined to answer, remanding the case for trial.
- After the lawsuit was initiated but before trial, the Maurers conveyed the property to the Bumanns, leaving only the question of damages for the delay.
- A jury trial on the damages issue resulted in a verdict for the Bumanns in the amount of $8,292.33.
- The Maurers filed a motion for judgment notwithstanding the verdict or, in the alternative, for a new trial, which the trial court denied.
- The Maurers (appellants) appealed the trial court's denial of their motion to the Supreme Court of North Dakota, with the Bumanns as respondents.
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Issue:
Is the proper measure of damages for a seller's delay in conveying real property, where the conveyance is eventually completed, the value of the use of the property for the period of the wrongful occupation?
Opinions:
Majority - Maxwell, District Judge
Yes. The proper measure of damages for a seller's delay in conveying real property, where the conveyance is eventually completed, is the value of the use of the property for the period of wrongful occupation. The trial court erred by instructing the jury based on the general statute for breach of contract (Sec. 32-03-09 NDCC), which measures damages as all detriment proximately caused. The sellers' proposal to use the statute for failure to convey (Sec. 32-03-13 NDCC), measuring damages as the difference between contract price and market value, was also incorrect, as that statute applies only to a complete failure to convey, not a mere delay. The correct and most specific statute is Sec. 32-03-21 NDCC, which governs damages for wrongful occupation of realty and defines detriment as 'the value of the use of the property.' This value may be calculated as either the fair rental value of the property or through an accounting of the profits the sellers wrongfully obtained from the land during the delay. The trial court also erred by including language from the tort damages statute ('whether it could have been anticipated or not'), as contract damages are limited to foreseeable injuries. While some special damages may be recoverable if foreseeable, recovering both the value of the use of the promised land and the cost of renting a substitute property would constitute an impermissible double recovery.
Analysis:
This decision clarifies the important distinction between damages for a complete failure to convey real property and damages for a mere delay in performance. By rejecting both the general contract damages rule and the failure-to-convey rule, the court established a specific framework for cases where specific performance is eventually granted. The ruling prevents buyers from receiving a windfall based on market value fluctuations and instead focuses on compensating them for their actual loss—the deprivation of the property's use. This reinforces the principle of avoiding double recovery and underscores that contract damages, unlike tort damages, are limited by the foreseeability standard established in Hadley v. Baxendale.
