Bartlett v. Department of Transportation

Thompson, J., delivered the opinion of the Court. On April 24, 1963, the appellant, William L. Bartlett, conveyed by deed a certain parcel of land supposedly consisting of 10.63 acres to the State Roads Commission. 1 It was subsequently discovered, much to the surprise of appellant, that the parcel conveyed actually encompassed 13.13 acres. Consequently, on April 9, 1976, appellant filed a bill of complaint in the Circuit Court for Cecil County asking that the deed be rescinded on the grounds of mutual mistake and the State be required to pay $66,000 in rent for its use of the property in question, together with interest at the rate of 6%. 2 The chancellor, H. Kenneth Mackey, denied rescission but did reform the deed by increasing the sale price to reflect the additional 2V2 acres acquired by the State. 3 On appeal appellant maintains: (1) the chancellor erred in not rescinding the contract, and (2) even if the contract should not have been rescinded, damages should have been calculated according to the fair market value of the property at the time of the trial ⁴⁹ rather than in accordance with the contract price. 4 We see no merit in these contentions and shall affirm the decree. There is no material dispute concerning the facts which led to this appeal, most of which have been stipulated by the parties.

On February 1, 1963, appellant granted the State Road Commission an option to purchase for $11,300 a part of a tract of land. At the time both parties believed the parcel contained 10.63 acres and the option price was based on a negotiated sum of $432.74 per acre. 5 The option was exercised by appellees and on April 24,1963, the land was conveyed to the State. Prior to the execution of the deed, the parcel had been marked by stakes and both parties had observed the area staked out. At no time have appellees occupied any land other than that described in the deed.

There is no suggestion of bad faith on the part of either of the parties. I Availability of Rescission In order to be entitled to a decree rescinding a deed on the grounds of mutual mistake, it must appear that the mistake was such that if the true facts had been known the deed would not have been executed. See Gross v. Stone, 173 Md. 653 , 197 A. 137 (1938); Reigart v. Fisher, 149 Md. 336, 346-347 , 131 A. 568, 572 (1925). If it appears that the discrepancy would not have prevented the party from entering into a contract, then the mistake is immaterial and the proper remedy is an adjustment in the purchase price.

In determining materiality the intention of the parties and not the size of the discrepancy controls. See Reigart v. Fisher, supra, 149 Md. at 346 , 131 A. at 572 ; Keating v. Price, 58 Md. 532, 537 (1882). In deciding whether the mistake in question is material we think the case of Henn v. McGinnis, 182 Iowa 131 , 165 N. W. 406 (1917) is particularly instructive. There the vendor sought an adjustment in the purchase price as the result of an excess in the amount of land actually conveyed over the amount recited in the deed.

The purchase price had been negotiated ⁵⁰ on a per acre basis and both parties had inspected the land prior to the sale. The purchaser claimed the only remedy available to the vendor was rescission. The court disagreed, indicating rescission was not available because the mistake was based on an immaterial fact, and ruled the proper remedy was an adjustment in the purchase price. In reaching this conclusion the court reasoned the mistake merely involved an error in the computation of the consideration inasmuch as both parties understood exactly what land was being sold and had agreed on a specified price per acre.

As in Henn the parties in the instant case contracted for the sale of a specific parcel of land. Appellees planned to use the land for the construction of an expressway and to this end had staked out the amount of land required. Both parties observed the area staked out and after a period of negotiation, agreed on a set price per acre. Based on these facts it is apparent that the contract was intended to be a sale of a certain parcel of land and not a sale of a specific amount of acreage.

As both parties mistakenly believed the parcel contained only 10.63 acres, there was a mistake only in computing the total purchase price. The mistake did not go to the essence of the agreement but involved only a computational error which was not material. Counsel for appellant argues that if appellant had known the parcel was actually comprised of 13.13 acres, he might have attempted to negotiate a higher purchase price per acre and as such the mistake was material. There is no factual basis for this assumption in the record, and counsel’s argument amounts to nothing more than sheer speculation.

Even if counsel’s assumption were accurate, and the mistake were to be considered material, appellant would still not be entitled, as a matter of right, to rescind the contract because rescission is an