192 Iowa 563 | Iowa | 1921
The material facts in the case are, for the most part, undisputed. Briefly stated, they are as follows: On May 1, 1920, the plaintiff, Fowler, being then the owner of the house and lot in question, entered into a written contract with the defendants Dieleman and wife, by -which he sold and agreed to convey said property to them for the sum of $10,000, payable
“Mr.'Dieleman will ask that the contract be canceled on the grounds of fraud; however, he is willing to pay a reasonable rental value for the use of the property since the first day of July, 1920. Mr. Dieleman also demands the cancellation of a certain promissory note of $1,000, bearing the same date as the contract, namely, May 7, 1920.”
Desponding to the letter, plaintiff wrote the defendants, expressing his surprise at the defendants’ attitude, insisting that he had dealt fairly in the matter and closing with the following :
“Your note and the contract are with the Farmers National Bank and you will be able to settle with them direct. I think upon second thought you will come to the conclusion that you had better stand pat and hang onto the property. I know this is a difficult time, but you have sold your home here and you ought to be able to meet the terms of your contract in good shape.”
On the same day, he wrote defendants ’ counsel in the same
In his petition, plaintiff sets out the contract of sale and the terms of payment, also, the letter from Shankland, herein-before quoted; and alleges plaintiff’s readiness to carry out the contract according to its terms and tender of performance; and avers that, defendants having refused to accept such performance, plaintiff thereupon “elected to consider said contract broken, the same having been repudiated by defendants, as above alleged, and elected to keep said premises.” Upon this basis of alleged facts, plaintiff contends that defendants thereby “became tenants at sufferance, or at most, tenants at will,” of the premises; that this relation was terminated by the aforesaid notices to quit; and that plaintiff became entitled to immediate possession.
Defendants’ demurrer to this petition was overruled, and they answered over, admitting the making of the contract, and alleging, in substance, that they thereby acquired lawful possession of the property, and that, while they did tender or offer to cancel the contract on certain terms, such terms were never accepted by plaintiff, and the contract was never canceled or rescinded. They further allege that, although they paid plaintiff the sum of $1,000 in money, and gave him their note for the further sum of $1,000, plaintiff has at no time returned or offered to return either.
Without further preliminaries, it may be said that the material question here presented is this: Conceding the facts to be as stated and shown by the plaintiff, can he maintain forcible entry and detainer, to regain possession of -the property 1 This inquiry must be answered in the negative. There is no express condition or provision in the contract reserving such right in the vendor, nor is there any provision therein from which such right may be implied. Neither is there any rule or principle of the law governing the rights of the vendor and vendee of land by which, in the absence of any stipulation therefor, the vendor may re-enter possession and oust the vendee for no better reason than the failure or refusal of the latter to pay an installment of the purchase price. Under a contract such as we have in this case, the seller and purchaser occupy substantially the relation of mortgagee and mortgagor, the seller holding the legal title in trust for the purchaser, and as security for payment of the unpaid portion of the agreed price. See Code Section 4298. Code Section 4297 provides that, when the vendor has given a bond or other writing to convey land on payment of the purchase money, and default is made in such payment, then, whether time is made the essence of the contract or not, the vendor may sue, to compel specific performance or to foreclose and sell the vendee’s interest in the property. This does not, of course, take from the seller the right to waive the foreclosure and sue at law, to recover a personal judgment against the buyer for the unpaid debt.
Appellee argues that this case is not subject to the ordinary rule, because the defendants “repudiated” the contract and refused to perform; and that, in such event, the vendor may treat the agreement as if it never existed, and recover the possession. We cannot concede either the premises or the conclusion. There is shown no rescission, either by the buyer, as a matter of alleged right on his part, or by the seller, or by the mutual con
Quite in point upon this proposition is the discussion by the Oregon court in Frink v. Thomas, 20 Ore. 265, where a vendor brought suit to cancel a contract for sale of land, on the ground that defendant had “abandoned and repudiated the contract, and refused to pay the purchase price.”
Stating the reasons why such relief was refused, the court says:
“It appears from the complaint that, soon after making the contract, defendant paid $340 of the purchase price. Before plaintiff can abandon the contract and treat it as at an end, he must refund or offer to refund the money paid in part performance of it, with legal accrued interest. It is a general rule that, in order to disaffirm a contract and entitle a party to the rights resulting therefrom, the rescinding party must put the other in statu quo. He must account to the other for any money paid in part performance of the contract. (Knott v. Stephens, 5 Ore. 235; Johnson v. Jackson, 27 Miss. 498; 2 Warville on Vendors, 881; Thomas v. Beaton, 25 Tex. Sup. 318.) Plaintiff does not offer to account for the money paid him by defendant in part performance of this contract, but seeks, not only to rescind the contract and retain this money, but to charge defendant with the rents and profits of the land during the time he has been in possession thereof, in addition. It would certainly be unjust to permit plaintiff, after having received a part of the purchase money, to put an end to the contract, upon the failure of defendant to pay the remainder, without offering
Of course, if a valid rescission has been accomplished by the act of either party entitled thereto, or by mutual consent, then the vendee in possession is in duty bound to surrender the premises; and upon failure to do so, may be proceeded against in an action to recover it. In this case, however, no rescission is shown. The vendee went into possession rightfully, under a contract with the vendor. Mere default in payment of the deferred installments of the purchase price does not make his possession wrongful, nor entitle the vendor to remove him therefrom; and, in this state at least, even where the contract expressly provides for forfeiture and re-entry, upon failure to make payments, this provision cannot be enforced without the service of 30 days’ written notice upon the vendee. Code Sections 4299, 4300. This provision of the statute is not satisfied by a 30-day notice to quit the possession. The notice contemplated by the statute is a notice by the vendor of his purpose to declare a forfeiture. To maintain forcible entry and detainer, he must show either an accomplished rescission or cancellation of his contract to sell, or a rescission by mutual agreement, and that defendant is wrongfully holding over after his right to possession has been so eliminated. This he has not shown, and the judgment in his favor must be reversed. The reversal thus ordered is without prejudice to plaintiff’s right to pursue his remedy as he may be advised, by suit in equity for a foreclosure or by action at law for recovery of a money judgment.— Reversed.