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Loveless v. Diehl - 235 Ark. 805, 364 S.W.2d 317 (1962)

Rule:

In the exercise of sound discretion, courts of equity may award damages and refuse specific performance where money damages are clear.

Facts:

Plaintiffs Diehl, a husband and wife, filed an action for specific performance of an option contract against Defendant lessors, Loveless husband and wife, followed by the Loveless' counterclaim for judgment on a promissory note. Plaintiffs entered into a lease that contained an option to purchase the property. They also entered into a separate agreement for Defendant lessors to sell the Plaintiffs certain equipment in exchange for the lessees’ promissory note. Plaintiffs became unable to exercise the option themselves but they found a third party that would buy the property. Defendant lessors refused, and the Plaintiffs instituted their action for specific performance.

Issue:

Can the plaintiffs compel defendant lessors to sell the leased property pursuant to an option contract?

Answer:

No.

Conclusion:

The Court held that the plaintiffs are entitled to judgment against the defendant lessors for $1,000, being the amount the Diehls would have realized if they had purchased the property from the Lovelesses and sold to the willing third party.  In awarding the clearly established damages in lieu of specific performance, the court is exercising the sound discretion which a court of equity has in cases involving specific performance.

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