Kramer v. Mobley
Court of Appeals of Kentucky
216 S.W.2d 930 (1949)
Mobley (plaintiff) agreed to buy real property from Kramer (defendant), but after signing, discovered an outstanding lien against the property. Kramer had told the real estate broker the lien was disputed, and offered Mobley both a check exceeding the lien amount and a promise to litigate to clear title, along with a provision to indemnify Mobley against any loss from the lien. Mobley initially found this acceptable but changed his mind, and later rejected a second similar offer along with a tendered warranty deed; Kramer then returned Mobley's down payment. Mobley sued for breach of contract, seeking market-value damages plus expenses like title examination fees, and the trial court awarded him such damages, finding Kramer had breached. Kramer appealed.
Whether, under Kentucky law, the proper measure of a purchaser's damages for breach of a real property purchase agreement by a seller unable to deliver clear title, where the seller has not committed fraud or acted in bad faith, is the amount of purchase money paid up to the time of breach with expenses and interest.