Telfener v. Russ (145 U.S. 522)/Opinion of the Court

Two questions were presented for our consideration on the argument of this case: (1) Whether the plaintiff below, the defendant in error here, acquired any assignable interest in the real property described in the contract upon which the action is brought; (2) assuming that he had an assignable interest, whether the rule for the measure of damages for breach of the contract for such interest by the defendant was correctly stated to the jury by the court.

1. The state of Texas opened its unappropriated lands for sale on the most liberal terms. Any person, firm, or corporation desiring to purchase any portion of the lands might do so by applying to have the same surveyed by the authorized public surveyor of the county or district in which it was situated. It was made the duty of the surveyor to whom such application was made, by a responsible party, to survey the land designated, within three months thereafter, and within 60 days after the survey to certify and record a map and field notes of the survey, and return and file them in the general land office of the state. Within 60 days after the return and filing of these papers in the general land office it was the right of the person, firm, or corporation that had had the survey made to pay, or cause to be paid, into the treasury of the state, the purchase money, at the rate of 50 cents per acre. Upon presentation to the commissioner of the general land office of the receipt of the state treasurer of the purchase money, the commissioner was to issue to the person, firm, or corporation a patent for the tract or tracts surveyed and paid for. And the statute declared that if any applicant for the purchase of public land refused or neglected to pay for the same at the rate of 50 cents per acre, within the time prescribed in the fifth section, he should forfeit all rights thereto, and should not thereafter be allowed to purchase the same, but the land surveyed might be sold by the commissioner of the general land office to any other person, firm, or corporation that should pay into the treasury the purchase money therefor.

It will thus be seen that an applicant, under the laws of Texas, for the purchase of a portion of its unappropriated lands, could acquire no vested interest in the land applied for, that is, no legal title to it, until the purchase price was paid and the patent of the state was issued to him. If the price was not paid within 60 days after the return to the general land office of a map of the land desired and the field notes of its survey. He forfeited all right to the land, and was not thereafter allowed to purchase it. He had, however, the right to complete the purchase and secure a patent within the prescribed period, after the map and field notes of the survey were filed in the general land office, which is designated in the decisions of the supreme court of the state as a vested right that could not be defeated by subsequent legislation. Whether this vested right for the limited period prescribed was assignable to others without the consent of the state authorities, neither the statutes of the state nor the decisions of its courts inform us definitely. It would seem that if a right to purchase land, for however short a perlod, is vested in one, it is a valuable right, and is, in that sense, property, and, in the absence of express prohibition, would be therefore assignable. Such is apparently the import of language used by the supreme court of the state in some of its decisions. White v. Martin, 66 Tex. 344, 17 S. W. Rep. 727; Cattle Co. v. Bacon, 79 Tex. 5, 14 S. W. Rep. 840.

In this case the purchase price of the land applied for by the plaintiff was never paid or tendered to the state by him, and on January 22, 1883, both of the laws of Texas-that of July 14, 1879, and that of March 11, 1881,-were repealed. But it is contended that previous to such repeal he had acquired a right to complete the purchase of the land by paying its price, and thus obtaining a patent for it, and while possessing that right the alleged contract was made with the defendant for its sale to him.

We will not, however, rest our decision upon the assignability of the right to purchase alleged to have been thus made, without the assent of the state authorities, as there is another and clear ground for the disposition of the case, in the instruction of the court to the jury upon the measure of damages for the alleged breach of the contract, which was that, if the contract was made as stated, and the plaintiff had complied with the laws of Teaxs respecting the application for the land, he was entitled to recover of the defendant 25 cents an acre-the full contract price-for all the land of which a survey was made. In this instruction the circuit court erred.

Assuming that the plaintiff had acquired a vested right to complete the proceedings for the purchase of the land desired and to secure a patent for it, and that such right was not personal to him, but was transferable to another without the assent of the state authorities, he did not show that he had suffered any damages by the failure of the defendant to comply with the contract for the right to purchase the land. On the 15th of November he possessed all the right to the land which he ever possessed, and, assuming that the defendant then failed to make the payment which he had agreed to make, all the damage suffered by the plaintiff was the difference between the value of the right, as stipulated to be paid, and the amount which could then have been obtained on its saled. The measure of damages for breach of a contract of sale of land by the purchaser is the difference between the contract price and the salable value of the property. That is the rule laid down by the supreme court of Texas in Kempner v. Heidenheimer, 65 Tex. 587. That court also adds that the salable value 'may be fixed by a fair resale, after notice to the party to be bound by the price as the value, within a reasonable time after the breach.' In that case it was also held that where no sale was made the plaintiff was only entitled to recover the difference between the market value at the date of the defendant's breach and the price he had agreed to pay, and that the duty devolved upon the plaintiff to establish these factors in the measure of damages. The same rule as to the measure of damages upon a breach of a contract for the sale of lands was held to be the proper one by the supreme court of Massachusetts in Railroad Co. v. Evans, 6 Gray, 25, 36, after considering numberous authorities on the subject. A similar rule prevails in Pennsylvania. Bowser v. Cessna, 62 Pa. St. 148, 151. The same rule must apply where the contract is not for the land, but for a right to purchase the land. The measure of damages must be the difference between the contract price and the salable value of the right when payment was to be made.

In the present case no evidence was produced to show the value on the 15th of November of the right of the plaintiff which he had sold to the defendant, nor was there any evidence produced as to the amount for which he could have sold to others that right; there was no evidence, therefore, for the estimate of damages at that time upon which the jury could have based a verdict. If anything could then have been obtained from the sale of that right, and the contract had been valid and binding, it was the duty of the plaintiff to make the sale when the defendant defaulted in his contract, and thus to have subjected him to as little loss as practicable. But not such sale was attempted, and no evidence was offered as to the value of the supposed right sold, and consequently no foundation laid for any recovery.

It follows that the judgment must be reversed and the cause remanded, with directions to the court below to grant a new trial, and to take further proceedings in accordance with this opinion; and it is so ordered.