Horton v. O'rourke

321 So.2d 612 (1975)

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Nature of the Case

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Facts

Four families executed written contracts with H&H Construction Company to purchase homes to be constructed on land owned by Overload Investments, Inc. Upon completion of the homes, the families took possession without closing under rental agreements of $90-$135 per month. Closing was conditioned upon clearance of all outstanding title defects. After taking possession, the purchasers got notice of a Federal Tax Lien on the property in excess of $94,000. After getting a number of assurances that the lien would be removed, they made improvements and continued to rent for another 22 months. On March 15, 1974, the purchasers got notice in writing that the clearance of the defect was impossible. D offered to return their earnest money deposits or to enter into a new rental agreement at a higher rate. Overlord, the record titleholder, then brought suit to oust each purchaser. The purchasers answered and then filed suit for specific performance against both Overlord and D alleging a principal-agent relationship. The final judgment denied specific performance finding that Overlord had no obligations to the purchasers, but awarded the purchasers damages against D. The court used the benefit of the bargain rule with the measure of damages being the difference between the value of the land when it should have been conveyed less the contract price as yet unpaid.