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HomeMy WebLinkAbout92-3383 Civila final order of court. BY THE COURT, Anthony L. DeLuca, Esq. Attorney for Richard E. Mears and E. Marie Mears William C. Costopoulos, Esq. Attorney for Ross H. Failor :rc E. MEARS and IN THE COURT OF COMMON PLEAS OF RICHARD E MARIE E. M CUMBERLAND COUNTY, PENNSYLVANIA Plaintiffs CIVIL ACTION - EQUITY ROSS H. FAILOR, SR., a/k/a ROSS H. FAILOR, NO. 40 EQUITY 1992 Defendant RICHARD E. MEARS and IN THE COURT OF COMMON PLEAS OF E. MARIE MEARS, CUMBERLAND COUNTY, PENNSYLVANIA Plaintiffs CIVIL ACTION - LAW ROSS H. FAILOR, SR., a/k/a ROSS H. FAILOR, Defendant NO. 3293 CIVIL 1992 ROSS H. FAILOR, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW V. RICHARD E. MEARS and NO. 3383 CIVIL 1992 E. MARIE MEARS, his wife, IN EJECTMENT Defendants IN RE: ADJUDICATION AND DECREE NISI BEFORE OLER, _J - ORDER ORDER OF COURT AND NOW, this 3p� day of April, 1993, the Court FINDS in favor of Richard E. Mears and E. Marie Mears and against Ross H. Failor. The prayer for rescission of the Agreement between the parties for sale of property in West Pennsboro Township, Cumberland County, Pennsylvania, is GRANTED, and Ross H. Failor is DIRECTED to pay to Richard E. Mears and E. Marie Mears the sum of $90,000.00, at which time the parties shall execute and record an instrument cancelling the Agreement. Unless post -trial motions are filed within ten days, this Decree Nisi shall become a final order of court. BY THE COURT, Anthony L. DeLuca, Esq. Attorney for Richard E. Mears and E. Marie Mears William C. Costopoulos, Esq. Attorney for Ross H. Failor :rc RICHARD E. MEARS and IN THE COURT OF COMMON PLEAS OF E. MARIE MEARS, CUMBERLAND COUNTY, PENNSYLVANIA Plaintiffs V. CIVIL ACTION - EQUITY ROSS H. FAILOR, SR., a/k/a ROSS H. FAILOR, Defendant NO. 40 EQUITY 1992 RICHARD E. MEARS and IN THE COURT OF COMMON PLEAS OF E. MARIE MEARS, CUMBERLAND COUNTY, PENNSYLVANIA Plaintiffs V. CIVIL ACTION - LAW ROSS H. FAILOR, SR., a/k/a ROSS H. FAILOR, Defendant NO. 3293 CIVIL 1992 ROSS H. FAILOR, IN THE COURT OF COMMON PLEAS OF Plaintiff CUMBERLAND COUNTY, PENNSYLVANIA V. CIVIL ACTION - LAW RICHARD E. MEARS and E. MARIE MEARS, his wife, NO. 3383 CIVIL 1992 Defendants IN EJECTMENT IN RE: ADJUDICATION AND DECREE NISI BEFORE OLER, J. OPINION AND ORDER OF COURT Oler, J. The present related cases, which were consolidated for a nonjury trial by agreement of counsel,' arise out of an agreement of sale (hereinafter Agreement) between Ross H. Failor (hereinafter Seller) and Richard E. Mears and E. Marie Mears (hereinafter Buyer) for a 22 -acre tract of land, containing a house,2 in West Pennsboro 1 See In re: Pretrial Conference, January 6, 1993. a See Plaintiff's Exhibit 5 (listing agreement). NO. 40 EQUITY 1992 NO. 3293 CIVIL 1992 NO. 3383 CIVIL 1992 Township, Cumberland County, Pennsylvania.' Both Seller and Buyer contend that the other has breached the Agreement. At No. 40 Equity 1992, Buyer has brought an action for rescission of the Agreement.4 At No. 3293 Civil 1992, Buyer has brought an action for breach of contract, misrepresentation and unjust enrichment.' And at No. 3383 Civil 1992, Seller has brought an action for ejectment;' Buyer has, however, vacated the premises as of February 1, 1993.' A trial in these matters was held on March 17, 1993, before the undersigned judge. Based upon the evidence presented at the trial, the following Findings of Fact, Discussion and Adjudication and Decree Nisi are made and entered: FINDINGS OF FACT 1. Plaintiffs at No. 3293 Civil 1992 and No. 40 Equity 1992, and Defendants at No. 3383 Civil 1992, are Richard E. Mears and E. Marie Mears, husband and wife, of 3 Plaintiff's Exhibit 1 (agreement of sale). 4 In the alternative, the Buyer seeks abatement of the purchase price. This action was filed on September 18, 1992. 5 This action was also filed on September 18, 1992. 6 This action was filed on September 25, 1992. 7 Stipulation of Counsel, Trial N.T. _ (hereinafter N.T. --). At the present time, a transcript of the notes of testimony has not been requested or ordered. 2 NO. 40 EQUITY 1992 NO. 3293 CIVIL 1992 NO. 3383 CIVIL 1992 Mount Holly Springs, Cumberland County, Pennsylvania (Buyer). 2. Defendant at No. 3293 Civil 1992 and No. 40 Equity 1992, and Plaintiff at No. 3383 Civil 1992, is Ross H. Failor, of Carlisle, Cumberland County, Pennsylvania (Seller). 3. At all times pertinent hereto, Seller has been the owner in fee simple of a 22 - acre tract, containing a house, in West Pennsboro Township, Cumberland County, Pennsylvania, described in a deed to Seller dated January 6, 1989, recorded in the Office of the Recorder of Deeds for Cumberland County in Deed Book T, Volume 33, Page 323.8 4. On or about March 30, 1991, Seller listed the aforesaid property for sale.' 5. Buyer viewed the property in early July, 1991; in viewing it, Buyer Richard E. Mears noticed a seven -to -ten -foot -wide dirt lane, bounded on each side by woods, running along the northern boundary of the land, from Township Road 438 to an adjoining farm. 10 6. Mr. Mears testified that he inquired of Seller about the lane, was told that the adjoining owner had permission to use it so long as it was maintained, and was 8 Stipulation of Counsel, N.T. _; Plaintiff's Exhibits 1 (Agreement), 5 (listing agreement). 9 Plaintifrs Exhibit 5 (listing agreement). io Plaintiffs Exhibits 3, 4; N.T. _ 3 NO. 40 EQUITY 1992 NO. 3293 CIVIL 1992 NO. 3383 CIVIL 1992 assured by Seller that no written agreement existed concerning the lane." 7. Following negotiations, Seller and Buyer entered into an agreement of sale (Agreement) for the sale and purchase of the land, the purchase price being $190,000.12 8. With respect to the purchase price, the Agreement provided that Buyer was to pay Seller $30,000 by July 20, 1991, $60,000 by July 25, 1991, and $100,000 on July 31, 1992, with monthly interest payments between July 31, 1991, and July 31, 1992, of $833.33.13 9. With respect to title, the Agreement provided, in pertinent part, as follows: A. Current Title: The title to the premises as it exists at the time of the signing of this contract shall be record title, good and marketable, free and clear from all encumbrances, liens and dower or right of dower except for recorded restrictions and utility easements. b. Title Upon Final Payment of Purchase Price: Upon payment of the purchase price, the title to the real estate shall be conveyed in fee simple by general warranty deed to Buyer. Title to the premises shall be good and marketable such as will be insured at regular rates by any reputable Title Insurance Company, and shall be free and clear from all encumbrances, liens and dower or right of dower, except 11 N.T. 12 Plaintiff's Exhibit 1. 13 Plaintiff's Exhibit 1. 4 NO. 40 EQUITY 1992 NO. 3293 CIVIL 1992 NO. 3383 CIVIL 1992 for recorded restrictions, utility easements and except for any liens and encumbrances directly caused or created by the Buyer....14 10. With respect to possession, the Agreement provided that "[p]ossession of the said premises shall be delivered to Buyer on July 31, 1991."15 11. Pursuant to the Agreement, Buyer made the requisite payments of $30,000 and $60,000 in July of 1991, took possession of the premises in that month, and made twelve subsequent interest payments of $833.33, as provided for.16 12. In the Spring of 1992, as a result of certain activity of the aforesaid adjoining owner in connection with the lane, Buyer Richard E. Mears commissioned a survey of the property being purchased." 13. A title search of the property resulted in the discovery by Buyer of a recorded right-of-way agreement dated September 17, 1977, between Seller1s and the aforesaid adjoining owner; the agreement provided for "the free and uninterrupted use, liberty and privilege of, and passage in and along" the right-of-way by the " Plaintiff's Exhibit 1. 15 Plaintiffs Exhibit 1. is Stipulation of Counsel, N.T. _. The Court accepts the position of Buyer that 12 as opposed to 11 interest payments were made. 17 N.T. i8 And Seller's spouse at that time, who was a co-owner. See Plaintiffs Exhibits 1, 3. NO. 40 EQUITY 1992 NO. 3293 CIVIL 1992 NO. 3383 CIVIL 1992 adjoining owner and the owner's heirs and assigns; the right-of-way extended along the northern boundary of Seller's land, from Township Road 438 to the adjoining land.19 14. The right-of-way provided forth in the said 1977 agreement was 50 feet in width.20 15. The right-of-way measures almost a thousand feet in length." 16. Buyer refused to pay the balance of the purchase price of $100,000 provided for in the Agreement; the parties' attempts to resolve the matter amicably failed; and Buyer has vacated the premises as of February 1, 1993.22 DISCUSSION Statement of law. "It ... has been well established that a vendee in a contract for the sale of real estate may rely upon an express covenant to convey title `free and clear of all encumbrances', and this has been so even though the vendee knew of an encumbrance which affected title." Ziskind u. Bruce Lee Corp., 224 Pa. Super. 518, 523, 307 A.2d 377, 379, allocatur refused, 224 Pa. Super. xxxvii (1973). "In practice, when an unexpected encumbrance is discovered before conveyance, the vendee is Plaintiff's Exhibit 3. 20 Plaintiff's Exhibit 3. 21 N.T. 22 N.T. _; Stipulation of Counsel, N.T. _ (as to vacation of premises). Cal NO. 40 EQUITY 1992 NO. 3293 CIVIL 1992 NO. 3383 CIVIL 1992 ordinarily may either refuse to take title, rescind the agreement and receive back his deposit money, or take title subject to the encumbrance, with a reduction of the purchase price commensurate with the diminution in the value of the property." 1 Ladner, Conveyancing in Pennsylvania §6105(e) (1979); see Ziskind v. Bruce Lee Corp., 224 Pa. Super. 518, 307 A.2d 377, allocatur refused, 224 Pa. Super. xxxvii (1973) (rescission and restitution ordered); Volkert v. Swan, 197 Pa. Super. 576, 179 A.2d 274 (1962) (same). "An encumbrance... has been defined as a right to or interest in land which may subsist in third persons, to the diminution of the value of the land, but consistent with the passing of the fee by conveyance.... "An encumbrance may be either or both of two types, viz., one which affects the physical condition or use of the property, or one which affects the title. [An example] of the former class which, in the absence of provision to the contrary, will entitle the purchaser to rescind and recover his deposit money [is] ... [a] private right of way...." 1 Ladner, Conveyancing in Pennsylvania §6.05(e) (1979). In general, a right-of-way easement is an encumbrance. Ziskind v. Bruce Lee Corp., 224 Pa. Super. 518, 307 A.2d 377, allocatur refused, 224 Pa. Super. xxxvii (1973). Although under certain circumstances an encumbrance may be disregarded pursuant to the maxim "de minimis non curat lex," the availability of such a principle 7 NO. 40 EQUITY 1992 NO. 3293 CIVIL 1992 NO. 3383 CIVIL 1992 is limited to cases where the encumbrance is "so slight that the court can say of [it that] the parties to the action did not have [such a matter] in contemplation and if they had they would have disregarded [it]." Volkert v. Swan, 197 Pa. Super. 576, 582, 179 A.2d 274, 277 (1962). Application of law to facts. In the present case, Seller agreed to convey a 22 - acre tract "free and clear from all encumbrances, liens and dower or right of dower, except for recorded restrictions, utility easements and except for any liens and encumbrances directly caused or created by the Buyer." Seller further represented in the Agreement that at the time of the Agreement's execution the title was "free and clear from all encumbrances, liens and dower or right of dower except for recorded restrictions and utility easements." The 50 -foot -wide easement in favor of an adjoining landowner, extending over the tract for almost a thousand feet, was not caused or created by the Buyer, was not a utility easement, and can not be considered a mere restriction, particularly where a distinction between easements and restrictions is recognized implicitly, if not explicitly, in the language of the document. In addition, the Court can not conclude that the encumbrance is so minor in nature that it had no practical significance, particularly in view of the testimony of Buyer Richard E. Mears that he had sought assurance that no easement as to the lane, even in its narrow manifestation, was in writing. Based E:3 NO. 40 EQUITY 1992 NO. 3293 CIVIL 1992 NO. 3383 CIVIL 1992 upon the foregoing principles of law, the Buyer is entitled to rescind the Agreement and receive back payments heretofore made on principal." ADJUDICATION AND DECREE NISI AND NOW, this;Aay of April, 1993, the Court FINDS in favor of Richard E. Mears and E. Marie Mears and against Ross H. Failor. The prayer for rescission of the Agreement between the parties for sale of property in West Pennsboro Township, Cumberland County, Pennsylvania, is GRANTED, and Ross H. Failor is DIRECTED to pay to Richard E. Mears and E. Marie Mears the sum of $90,000.00, at which time the parties shall execute and record an instrument cancelling the Agreement. Unless post -trial motions are filed within ten days, this Decree Nisi shall become a final order of court. BY THE COURT, s/ J. Wesley Oler, Jr. J. Wesley Oler, Jr. J. za Because of the Court's disposition of the case, it is unnecessary to consider the supplemental contentions of Buyer as to nonclosure of description, a subdivision restriction, and marketability and insurability of title. In addition, since the Buyer received the benefit of possession of the premises for over a year, the Court believes that an equitable resolution of the matter will be served by treating interest payments made by Buyer, as well as certain other expenses incurred with respect to the property during possession, as rent. Finally, attorney's fees will not be awarded to either party. D NO. 40 EQUITY 1992 NO. 3293 CIVIL 1992 NO. 3383 CIVIL 1992 Anthony L. DeLuca, Esq. Attorney for Richard E. Mears and E. Marie Mears William C. Costopoulos, Esq. Attorney for Ross H. Failor :rc 10