Bethurem v. Hammett

736 P.2d 1128, 1987 Wyo. LEXIS 446
CourtWyoming Supreme Court
DecidedMay 15, 1987
Docket86-200
StatusPublished
Cited by22 cases

This text of 736 P.2d 1128 (Bethurem v. Hammett) is published on Counsel Stack Legal Research, covering Wyoming Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bethurem v. Hammett, 736 P.2d 1128, 1987 Wyo. LEXIS 446 (Wyo. 1987).

Opinions

URBIGKIT, Justice.

Buyers sued, raising breach-of-warranty issues, to rescind the purchase of a residence because the lot and structures encroached into the dedicated street. Sellers won in trial-court decision, and Buyers appeal by presented issues of contractual warranties of title merchantability and par-ol-evidence admissibility.

PACTS

In 1983, appellants, the Bethurems (Buyers), contracted to purchase a residence in Sheridan, Wyoming from appellees, the Hammetts (Sellers). In exchange for the realty, Buyers made a cash down payment and agreed to monthly installment payments for the purchase-price balance. In 1985, a dispute arose from encroachment of the residence structure, the garage and the cemented-in fence into the dedicated city street, as then confirmed by surveys by both parties.

After unsatisfactory negotiations, Buyers sued to rescind the sales agreement, claiming that Sellers had materially misrep[1130]*1130resented the property in failing to apprise Buyers of known encroachments. At trial, Buyers relied on provisions of the executed Offer, Acceptance & Receipt (Specific Performance Contract), a pre-printed document which stated:

“8. Title shall be merchantable in the Seller, except as stated in this paragraph. Subject to payment or tender as above provided and compliance with the other terms and conditions hereunder by Purchaser, the Seller shall execute and deliver a good and sufficient statutory warranty deed in favor of those persons named in Paragraph 7 above, including the release and waiver of all homestead rights, if any, and a good and sufficient bill of sale, and deliver the same to said Purchaser at closing, which shall occur on or before April 29, 1983, conveying said real and personal properties free and clear of all liens and encumbrances, except:
“(a) The general taxes for 1983;
“(b) Liens for special improvements, if any;
“(c) Easements for utilities;
“(d) Subject to building and zoning regulations;
“(e) City, state and county subdivision laws;
“(f) Reservations, restrictions and easements of record, if any; and
“(g) Except
“9. Any encumbrance required to be paid shall be paid by closing agent at the time of closing from the proceeds of this transaction.
“10. The Seller covenants that upon execution of this Contract:
“(a) The above-described property is in substantial compliance with applicable city, county and state subdivision laws, requirements and regulations in force and effect as of that date, EXCEPT:
“(b) There are no known defects, EXCEPT:
“(1) Those which are readily visible upon inspection; and “(2)”

Executed documentation in the case includes the standard Offer, Acceptance & Receipt form (a 1979 Wyoming Association of Realtors model instrument), a type'd sales agreement, and an executed warranty deed. The warranty deed is not in evidence, so that possible exceptions to its general warranty provisions cannot be determined. The typed sales agreement, which also included a nonpayment provision, in part provided:

“IV
“Sellers shall, at their expense, furnish Buyers with an Abstract or Title or Commitment for Title Insurance covering the above described premises. Said Abstract of Title or Commitment for Title Insurance shall be of recent date and shall show good merchantable title in Edward L. Hammett and Elsie Mae K. Hammett, husband and wife, free and clear of all encumbrances. Buyers shall have ten (10) days within which to cause said Abstract or Commitment to be examined by an Attorney of their choice. Any defects in title shall be forthwith corrected by Sellers.”

Contrary to the covenant in Paragraph 10(a) of the standard Offer, Acceptance & Receipt that the property was in substantial compliance with all applicable city, county, and state subdivision laws, requirements and regulations, those street line encroachments also violated Section 23-22 of the Sheridan City Code, which provides that

“[n]o person shall erect, build, set up or maintain in whole or in part any fence, sign, shop, post, building or obstruction whatsoever in or upon any street, avenue, alley, sidewalk or public ground within the city.”

The property was repossessed by Sellers, and is presently in their possession. The trial court judgment gave Buyers a ten-day option to bring the installment payments current in order to regain purchase possession. Apparently that election was not exercised.

CONTENTIONS OF THE PARTIES

Buyers contended that the breach of the sales agreement covenants was a misrepre[1131]*1131sentation entitling them to rescission, also asserting that encroachment onto the public street was a defect which renders title unmarketable in violation of Sellers’ covenants in Paragraphs 8 and 10 of the standard offer document and Section IV of the typed sales agreement. At trial, the parties took opposite positions regarding Buyers’ knowledge of the encroachment. Buyers claimed that Sellers led them to believe that there were no defects, that the transferred realty included all the land and improvements enclosed by the fence, and that the enclosed property was marketable. Sellers contended that they had orally discussed the encroachments and that Buyers assured them that the defect would not pose a problem since they planned to build a house farther back on the property. Appellants objected to the introduction of this oral evidence of preagreement communicated title defect, but the objection was overruled and direct conflict testimony was consequently introduced.

The trial court found generally in favor of the defendants, Sellers, and denied the claim for rescission. The following arguments are now presented:

I. Misrepresentation of the boundaries of real property entitles the purchaser to rescind.
II. Encroachment onto the city street is a defect in the premises rendering title unmarketable.
III. Encroachment as contrary to the city ordinance justifies rescission.
IV. Hammetts’ alleged oral disclosures of the encroachment problem violate the parol-evidence rule and are inadmissible.
V. Sufficient admissible evidence was produced at trial to entitle Bethurems to be granted rescission.

We reverse.

ENCROACHMENT AS WARRANTY VIOLATION

This court set forth the general rule regarding a seller’s misrepresentation of boundaries in Meeker v. Lanham, Wyo., 604 P.2d 556, 559 (1979), stating:

“With regard to the boundary lines, the rule regarding misrepresentations concerning the boundaries of property, is correctly pointed out to us by the appellant:

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Bethurem v. Hammett
736 P.2d 1128 (Wyoming Supreme Court, 1987)

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Bluebook (online)
736 P.2d 1128, 1987 Wyo. LEXIS 446, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bethurem-v-hammett-wyo-1987.