Lohmeyer v. Bower

Brief Fact Summary. The Plaintiff, Mr. Lohmeyer (Plaintiff), brought suit to rescind contract to buy land after he discovered the structure on the land was in violation of a city ordinance.

Synopsis of Rule of Law. A marketable title to real estate is one, which is free from reasonable doubt and a title is doubtful and unmarketable if it exposes the party holding it to the hazard of litigation.

Facts. The Plaintiff contracted with the Defendants, Mr. and Mrs. Bowers and another party (Defendants), to buy a lot with a house on it. The Plaintiff’s lawyer discovered that the house was in violation of a city ordinance requiring a minimum space between lot divisions. Further, the lot was in violation of a restriction in the deed requiring two story structures to be placed on the lot. Plaintiff brought this to the attention of the Defendants who offered to buy and convey sufficient adjacent property to rid the lot of the ordinance violation. The Plaintiff refused and brought suit to rescind the contract. The trial court found for the Defendants and ordered specific performance. The Plaintiff appealed.

Issue. Whether the property in question is subject to encumbrances or other burdens making the title unmerchantable.

Held. Reversed. A violation of a city ordinance as well as the other violations makes this title unmarketable and doubtful.
A marketable title to real estate is one, which is free from reasonable doubt and a title is doubtful and unmarketable if it exposes the party holding it to the hazard of litigation.
The defect which the purchaser complains must be of a substantial character and one from which he may suffer injury.

Discussion. The court analyzed what type of encumbrances or issues would render a title to real estate unmerchantable and allow a buyer to rescind the purchase contract. The court noted that the Plaintiff was correct in basing his case on current violations and not restrictions contained in the deed. Public ordinances and zoning are not restrictions that make a title unmarketable. They only do so, when the property in question is already in violation of them.