138 P. 339 | Idaho | 1914
The appellant, William J. Hall, on about the 30th day of March, 1911, entered into a contract with James F. Yaryan and wife, whereby he agreed to purchase from them a farm for the sum of $12,585. A deed was executed and placed in escrow in the First National Bank of Idaho. The escrow agreement was indorsed on the envelope in which the deed was placed, and recited that the first payment of $2,000 had been made and the receipt of that sum was acknowledged. It then provided for the payment of $1,000 on the 30th of March, 1912, $1,000 on March 30, 1913, and the balance of $8,585 on or before seven years after the date of the escrow. It was then recited in this agreement, which was signed by both parties, that “time is the essence of this agreement, and should the grantee herein fail to make payments as herein agreed, then this escrow and deed to be returned to the grantors herein and all payments made at that time to be kept by the grantors or their heirs or assigns as liquidated damages.” Hall was unable to meet the $1,000
The trial court found that appellant failed to make his payments in accordance with the terms of the escrow agreement and that thereafter the vendor and vendee had a controversy over the matter and finally reached an agreement which was
It appears from the evidence that some time- in April, Yaryan went to the bank and took down the escrow agreement and deed which had been deposited in the bank. Hall, however, had no knowledge or information of the taking down of the deed and escrow until some time in November and after the expiration of the lease itself. It is clear, therefore, that his failure to make the thousand dollar payment on the first of July was in no way influenced by the fact that Yaryan had taken the deed and escrow agreement out of the bank. On the other hand, if he had made the payment within the time or tendered the payment, there is no question but that he would have had a right to enforce the terms of the original ■agreement even though the vendor had reclaimed the deed and escrow agreement. While Yaryan may have had no right to demand the deed and agreement prior to the first of July, on the other hand there was no breach of faith or duty on the part of the bank in surrendering up the deed and agreement, for the reason that it does not appear that the bank had been in any way apprised of the subsequent agreement extending the time until July 1st. The original escrow agreement was
The decisive question confronting us in this ease is the right of the vendee to recover payments made on a contract to purchase after a breach "of the contract by him. Appellant had entered into a contract to purchase a tract of land for a stipulated sum, payable in instalments. He failed to make a payment as provided for in the agreement. He seems to have realized that this was a forfeiture of his rights and the money previously- paid, and thereafter entered into this lease and extension of time. He failed to make payment within the time granted by the extension. He is in the position now of suing to recover money under a contract which he admittedly violated himself, and the loss under which occurred by reason of his not having lived up to the terms of Ms contract. The law is well settled that a purchaser of land in default for failure to make payments of the purchase price, as stipulated by the agreement or contract of purchase, cannot rescind the contract or breach the same and refuse to make the payments and thereupon maintain an action against the vendor for the instalments previously paid. (Glock v. Howard & Wilson Colony Co., 123 Cal. 1, 69 Am. St. 17, 55 Pac. 713, 43 L. R. A. 199; List v. Moore, 20 Cal. App. 616, 129 Pac. 962; Hansbrough v. Peck, 5 Wall. (U. S.) 497, 18 L. ed. 520; Young v. Jordan, 183 Ill. 459, 56 N. E. 85; Downey v. Riggs, 102 Iowa, 88, 70 N. W. 1091; Keefe v. Fairfield, 184 Mass. 334, 68 N. E. 342; Satterlee v. Cronkhite, 114 Mich 634, 72 N. W. 616; Goldman v. Willis, 64 App. Div. 508, 72 N. Y. Supp. 292; Palmer v. Washington Securities Inv. Co., 43 Wash. 451, 86
The contention by appellant that this agreement provided a penalty and stipulated for a forfeiture and that in so far it was void, and that to deny the appellant the right to recover here would have the effect of enforcing such forfeiture, is not.well taken, for the reason that without any such stipulation in the agreement or contract the legal effect of a breach would be the forfeiture of the sum paid, or rather it terminates the contract and leaves the parties in the position they place themselves in and presumes that each has received an adequate value and compensation, for the amount he has laid out and expended under the contract. It must not be forgotten that time was made of the essence of the stipulation and agreement here involved, in so far as the payment of the instalments was concerned.
We think that appellant’s authorities as to the nature and effect of an escrow are sound and correctly state the law. (1 Devlin on Deeds, p. 578; Bronx Investment Co. v. National Bank of Commerce, 47 Wash. 566, 92 Pac. 380; Tharaldson v. Everts, 87 Minn. 168, 91 N. W. 467; In re Cornelius’ Estate, 151 Cal. 550, 91 Pac. 329.) It would be most unsafe, however, and indeed disastrous in a state like ours, to hold that every time a deed is placed in escrow the vendee therein acquires such an interest in the property as to require a foreclosure in order to divest him of such interest. When he fails to comply with the terms of the escrow agreement, the vendor is clearly entitled to take down the deed and thus terminate the vendee’s interest and right therein.
We conclude that the judgment in this case should be affirmed, and it is so ordered, with costs in favor of respondent.