Collins v. Creason

| Or. | Jan 18, 1910

Opinion by

Mr. Chief Justice Moore.

The contract, having been offered in evidence, shows that the consideration is $700; that the plaintiff was to pay the taxes apportioned to the premises; that upon a delinquency of any payment for a period of three months it should be lawful for the defendant to declare the agreement at an end, whereupon all money paid on account thereof should be deemed liquidated damages for the rent of the property, but, if the purchase price and interest were paid within the time specified, a deed to the land should thereupon be executed to the plaintiff.

Collins, as a witness in his own behalf, testified that, though the contract stated the purchase price to be $700, the premises described therein included a half lot more than was to have been conveyed, which smaller parcel of land was then owned by a third party; that the defendant, having secured the title to such tract, orally agreed to convey it for $150 to the plaintiff, who executed to him a promissory note therefor, and' thereafter paid such sum and the interest thereon, thus making the entire consideration $850, as alleged in the complaint, and not $700, as averred in the answer. This witness further stated that he gave the defendant $100 when the contract was signed; that he paid $150, as evidenced by the promissory note, and regularly discharged the installments of the principal as they severally matured from January 1, 1903, to April 1, 1904, inclusive, making $150; and that he also liquidated the partial payments of interest, to wit, $40.23, aggregating $440.23.

It appears from the evidence that no more payments were made on this contract until January 1, 1905, when tenants to whom the plaintiff had respectively leased a blacksmith shop and a barn on the premises paid to the defendant the rent. In the meantime, however, the defendant, taking advantage of the terms of the agreement, declared the contract terminated and the money obtained thereon" forfeited, so that the payments thereafter made to him by the tenants, he asserted, had been received in consequence of their attornment. These lessees, prior to the bringing of this suit, paid to the defendant, as rent, sums of money sufficient to have liquidated the remainder of the purchase price due under the contract, if it were not abrogated. The plaintiff never consented to or acquiesced in the alleged cancellation of the agreement, nor in the confiscation of the money which he had paid thereon.

The defendant, as a witness in his own behalf, testified that on the day the contract in question was signed he received $100 from the plaintiff; but that, as the latter was then indebted to him on a negotiable instrument, the money so paid was credited thereon; that no promissory note was given by the plaintiff for any portion of the land, nor did he pay $150, or any part thereof, for an additional interest therein; and that the plaintiff paid only five installments, aggregating only $125 of the principal, the last payment having been made January 1, 1904. A check for $25, drawn by the plaintiff April 4, 1904, in favor of the defendant and indorsed'by him, was identified and offered in evidence, thus showing that an installment of the principal was paid after the time which he stated. The defendant did not identify any promissory note executed to him by the plaintiff upon which was indorsed the sum of $100 paid July 30, 1902.

It seems improbable that the defendant, having received a sum of money which he knew was paid on account of the purchase of the land, would give the plaintiff credit therefor on other indebtedness, if any then existed. To have done so without the plaintiff’s consent, which it is not claimed was obtained, might have been prejudicial to him, for, after he had made many payments on the land, the defendant, by taking advantage of the clause providing for cancellation of the contract upon a three months’ default of any installment, might have insisted on a breach of the agreement and terminated it, forfeiting all payments made thereunder, and subjecting Collins to unnecessary expense in maintaining his right in a suit instituted for that purpose.

Creason unquestionably erred in testifying in relation to the payment of the $25 which he certainly received on April 4, 1904, as is evidenced by the plaintiff’s check for that sum. To say that he also made a mistake in stating that the $100 which he obtained as a first payment on the contract was credited on another account is as charitable a declaration of the matter as can reasonably be made. The plaintiff testified that he paid for the half lot of land, a description of which is included in the contract, $150 and interest thereon, evidenced by a promissory note, by hauling wood for the defendant, and offered in evidence a memorandum made by the latter on the back of a writing which stipulated' for the delivery of such fuel, showing the payment, with other items, of the sum so asserted to have been given. We conclude that the defendant, in testifying that he never received the $150 or any part thereof as an additional consideration for the land, made another mistake in his sworn declarations, and that the court properly found that the plaintiff paid on account of the purchase price $440.23, but made default after April, 1904. The question therefore to be considered is whether or not, in view of the purchase and full payment of the half lot, the defendant, by reason of the default, could upon notice, but without the plaintiff’s consent, annul the contract and appropriate the payments that had been made, except by tendering to him a conveyance of the premises and demanding the remainder due.

1. By invoking the general maxim that equity regards as done what ought to be done, and applying the doctrine of equitable conversion, it follows that when a valid contract, for the sale of real property and the execution of a deed therefor, has been consummated, an equitable title to the premises becomes vested in the vendee, who thereafter is treated as the owner of the land, while the money which is to be paid as a consideration therefor is regarded as the property of the vendor; so that, upon the death of the purchaser, his heirs succeed in equity to the rights of their ancestor in the real property, and upon the death of the vendor his personal representative succeeds to his right to the purchase money remaining unpaid. Minor, Real Property, § 1284. Sievers v. Brown, 34 Or. 454" court="Or." date_filed="1899-02-27" href="https://app.midpage.ai/document/sievers-v-brown-6897937?utm_source=webapp" opinion_id="6897937">34 Or. 454 (56 Pac. 171: 45 L. R. A. 642). Conner v. Banks, 18 Ala. 42" court="Ala." date_filed="1850-06-15" href="https://app.midpage.ai/document/conner-v-banks-6504300?utm_source=webapp" opinion_id="6504300">18 Ala. 42 (52 Am. Dec. 209).

2. In the case of an executory contract for the sale of land, where time is made the essence of the agreement, it would seem that the vendee had such an estate in the premises that he could not be deprived thereof, without his consent, except by a foreclosure or some other appropriate remedy, though the contract expressly provided for a termination thereof upon default and a confiscation of all previous payments; but, however, this may be, as compensation, and not forfeiture is a well-recognized principle of equity jurisprudence; the contract herein ought not to be terminated without at least tendering a proper deed of the premises and demanding payment of the sums due thereon, particularly so when the plaintiff paid the full consideration for the half lot, which he probably could have secured without cost by- enforcing specific performance of the original contract. Any other rule might permit a vendor, after obtaining nearly all the purchase price, to declare a forfeiture for a trivial default, retain the money which had been paid, and assert his recovery of the equitable title.

3. The defendant did not tender a deed, and hence he is not in a condition to declare a forfeiture. It appears that he paid taxes imposed on the land from 1904 to 1907, inclusive, amounting to $38.86, which sum the plaintiff, by the terms of the contract, should have liquidated; but as the evidence tends to show that the defendant collected from the plaintiff’s tenants a sum in excess of such taxes, aside from the full payment of the principal and interest due under the agreement, no allowance will be made on account of the money so paid to discharge the taxes.

4. The defendant also made some improvements to the property, after the alleged forfeiture was declared; but as he is not entitled to any recompense for enhancing the value of the premises, without the plaintiff’s consent, he is not entitled to any compensation therefor.

It follows, from these considerations, that the decree should be affirmed, and it is so ordered. Affirmed.