Loveless v. Diehl

The Lovelesses (defendants) owned a farm, which they leased to the Diehls (plaintiffs) for a three-year term. The lease agreement contained an option to allow the Diehls to purchase the property for $21,000 at any time during the lease term. The Diehls expended approximately $5,000 in improvements upon the land during the lease term. Mr. Diehl also purchased equipment from Mr. Loveless, for which a promissory note was executed, but never paid. The Diehls were not able to buy the property themselves. However, just before the option expired, the Diehls entered into an agreement with Dr. Hart, who agreed to purchase the property for a total of $22,000, paying $21,000 to the Lovelesses and $1,000 to the Diehls. The Lovelesses interfered with that agreement, telling Dr. Hart that they did not intend to sell the property to the Diehls. The agreement with Dr. Hart fell through and the $21,000 was not offered to the Lovelesses for the property. The Diehls removed some possessions from the property, but not until after the end of the lease term. The Lovelesses took forcible possession of the property. The Diehls filed suit against the Lovelesses in the chancery court, seeking specific performance of the option or, in the alternative, damages. The Lovelesses counterclaimed for the note regarding the equipment and for the balance of rent. The trial court awarded the Diehls specific performance and damages and awarded the Lovelesses damages on the note. Both parties appealed.