Weinman v. De Palma

Background

In November 1901 a property owner leased a building and lot in Albuquerque to a drugstore business for a two-year term. The adjoining owner agreed in writing to replace his old building and to build a party wall with half its thickness on each lot. The adjoining owner hired a contractor, who worked under the directions of the owner’s superintendent. During excavation in late June the east wall of the leased building was undermined and collapsed. The drugstore’s stock and fixtures were damaged and the business had to move to a less desirable location. The tenant sued both the landlord and the adjoining owner for damages.

Reasoning

The key question was whether the landlord could be held responsible when the written agreement to build the party wall required entry on the leased premises and the work undermined the tenant’s wall. The Court said the landlord’s agreement was evidence that he approved the trespass and therefore could be held jointly or severally liable with the adjoining owner. The Court also held that lost future profits are a proper element of compensatory damages when those profits are reasonably certain and shown with reasonable exactness. Finally, the Court rejected the claim that the contractor was an independent actor, because he followed the instructions of the owner’s agent who supervised the work.

Real world impact

This decision means landlords who contract to alter adjoining property in ways that invade a leased building risk being held liable for resulting damage. Tenants who lose stock, fixtures, and business income because a building is destroyed or made untenantable may recover compensation for those losses, including future profits when they can be shown with reasonable certainty. Contractors may not be able to avoid responsibility by claiming independent status if the owner controls or supervises the work.