Scott v. Foppe

Denny, J. The amount which the plaintiff seeks to recover in this action, to wit, $5,230.70, is the exact amount he claims to have invested in labor and materials that went into the construction of the house, including $1,000 paid on the purchase price of the lot, plus the cost of certain appliances which were installed in the house. It is settled law that where a party agrees to purchase real estate and pays a part of the consideration therefor and then refuses or becomes unable to comply with the terms of his contract, he is not entitled to recover the amount theretofore paid pursuant to its terms. Rochlin v. Construction Co., 234 N.C. 443, 67 S.E. 2d 464; Improvement Co. v. Guthrie, 116 N.C. 381, 21 S.E. 952; 31 A.L.R. 2d 118, Anno.—Vendee’s Recovery of Purchase Money; 55 Am. Jur., Vendor and Purchaser, section 535, page 927; 92 C.J.S., Vendor and Purchaser, section 554 (a), page 566. In view of the facts disclosed on this record, it is clear that the plaintiff is not entitled to recover anything from the defendant as a refund of the amount paid under the contract before *71 its breach. However, the plaintiff contends in his brief that under these facts and circumstances, when it became known to the defendant that he was unable to carry out his contract to buy the house and lot, the defendant then owed him the duty to minimize or eliminate the damages. This contention is based on the claim that the plaintiff produced a purchaser who was willing and able to buy the property at a price which he contends, if the offer had been accepted, would have been sufficient to reimburse the defendant and the plaintiff for their respective investments in the house and lot. We think the plaintiff has attempted to base his cause of action on the equitable doctrine of mitigation of damages, growing out of the breach of the original contract, and of an alleged breach by the defendant of a contract allegedly entered into by the parties with respect to the sale of the house and lot after plaintiff had breached the contract for the purchase of the property. Ordinarily, the equitable doctrine of mitigation of damages is a defense to an action in which the plaintiff seeks to recover for damages allegedly caused by a breach of duty on the part of defendant and does not constitute a cause of action. As stated in Sutherland, Damages, Volume 1, 4th Edition, section 149, page 458, “Mitigation of damages is what the expression imports, a reduction of their amount; not by proof of facts which are a bar to a part of the plaintiff’s cause of action, or a justification, nor of facts which constitute a cause of action in favor of the defendant; but rather of facts which show that the plaintiff’s conceded cause of action does not entitle him to so large an amount as the showing on his side would otherwise justify the jury in allowing him.” (Emphasis added.) See Lane v. R.R., 192 N.C. 287, 134 S.E. 855, 51 A.L.R. 1114; Johnson v. R.R., 184 N.C. 101, 113 S.E. 606, 25 A.L.R. 910; Brewington v. Loughran, 183 N.C. 558, 112 S.E. 257, 28 A.L.R. 1543. Finally, as to the alleged contract to sell the property to a third party, after the plaintiff had informed the defendant and Mr. Brecht of his inability to purchase' the property, and to accept the highest net offer so that each of the three parties, “would get their money back that had been put in the property,” we do not think the evidence offered by the plaintiff is sufficient to show that such a contract was entered into, and we so hold. Moreover, if such a contract had been entered into, there is no evidence of any consideration to support it. Jordan v. Maynard, 231 N.C. 101, 56 S.E. 2d 26; Stonestreet v. Oil Co., 226 N.C. 261, 37 S.E. 2d 676; Coleman v. Whisnant, 225 N.C. 494, 35 S.E. 2d 647. *72 As we have already pointed out, when the plaintiff breached his contract for the purchase of the house and lot, the defendant, under the facts disclosed on this record, was under no legal obligation to refund to him that portion of the consideration theretofore paid pursuant to the terms of the contract. Consequently, when the plaintiff breached the contract, the defendant and Mr. Brecht had the right to dispose of the property as they saw fit. However, if the defendant or Mr. Brecht should institute an action against the plaintiff to recover damages resulting from the plaintiff’s breach of the original contract, the plaintiff would have the right to set up in mitigation of the damages claimed, the failure, if any, on the part of Mr. Foppe and Mr. Brecht to exercise due diligence in order to minimize the present plaintiff’s loss by reason of his breach of such contract. The judgment of the court below is Affirmed.