179 P. 563 | Or. | 1919
Lead Opinion
We note at the outset that this is not a suit for specific performance, but is one of strict foreclosure, wherein the owner of the fee seeks to compel the vendee to pay the purchase price within a time fixed by the decree or abandon the undertaking.
“When the terms of an agreement have been reduced to writing by the parties, it is to be considered as containing all those terms, and therefore there can be, between the parties and their representatives or successors in interest, no evidence of the terms of the agreement, other than the contents of the writing, except in the following cases:—
‘ ‘ 1. Where a mistake or imperfection of the writing is put in issue by the pleadings. * * ”
It would be another matter if by appropriate narration it should appear that the plaintiffs represented to the defendants as a means of inducing the latter to make the contract, that the north line of the premises described in the instrument coincided with the fence mentioned but it is not so pleaded.
We premise that, as in any other contract, the minds of the parties must meet on an identical proposition which they both understand alike and to which they both assent in the same sense; otherwise, there is no agreement. It appears by the testimony that there had been some negotiations between the parties on'the subject and that the plaintiff E. H. Hawkins had offered the defendants $250 to surrender possession of the premises and cancel the contract. This, however, had not been accepted and this suit had been instituted; after which, the defendant wife, Mrs. Rodgers, made an appointment by telephone to have Mr. Hawkins meet her at a real estate office in Eugene at a certain time. Going there, Hawkins found Mr. Rodgers in the outer office, while the latter’s wife was in an inner room. After some delay they called Hawkins into the latter room, when, to quote in substance the testimony of both Rodgers and his wife, Mrs. Rodgers told Hawkins that they had decided to rescind the contract and to give immediate possession of the place, at the same time handing him their copy of the con
“Q. Did Mr. Hawkins ask you anything about what amount of money you would accept or anything like that?
“A. He asked me if we accepted what he offered; I told him no, we wouldn’t accept that.
‘ ‘Q. What did he say?
“A. He said, ‘Well, I will be willing to pay something.’ ”
He says they gave possession about January 10th, following, and that he saw the plaintiff E. H. Hawkins afterwards working on the place.
Mrs. Rodgers testified substantially as related and as follows:
“Q. When you handed Mr. Hawkins your copy of the contract between yourself and your husband on the one side, and' the plaintiffs Hawkins and wife on the other, and made your statement, you then turned to leave, and left the room?
“A. Yes.
“Q. Were you afraid he might hand it back to you?
“A. No, sir. I was sitting there. I had no further business in there. I had business with Mr. Peterson.
“Q. You w;ere done and you left?
“A. Well, I don’t think there were any words passed between me and them. I immediately got up as Mr. Skotheim did, and started to walk out of the door. I did not go clear out. I was standing just outside of the door, waiting.
“Q. You handed him this paper and made your statement simultaneously, didn’t you?
“A. Not so much so. I told him we had decided to rescind the contract, and handed it to him.
“Q. And turned and walked off?
“A. I was sitting down. I sat there for a second or two, and there was nothing said and I got up and walked out.
*496 “Q. Then yon were ready to leave right then and there and have nothing further discussed between you?
“A. It was not necessary that anything more should be said.
‘ ‘ Q. When you handed him the paper and made your little speech, you were done, is that the idea?
“A. Comparatively. Not done. I expected something back.
“Q. But there was no^further conversation?
“A. I had no further conversation with Mr. Hawkins ; no, sir.
“Q. That settled that phase of it so far as you were concerned?
“A. Yes, sir.
“Q. There was no occasion for any further discussion; is that right?
“A. I didn’t see that there was.”
E. H. Hawkins testified that' when he met Mrs. Rodgers in the inner office, she said, “This is a copy of the contract. We give up the place”; that he did not hear her use the word “rescind” and that he would not have known what she meant by it if he had heard it. He says that Mrs. Rodgers “got up and stood through the door between the rooms,” and further testifies:
“Q. What did you do then?
“A. I asked Mr. Rodgers if they were going to hold me to my agreement to give them two hundred fifty dollars; he didn’t answer, and she turned around and said, ‘No, we won’t accept it.’
“Q. Then what did you do?
“A. Well, I thought, ‘Perhaps you won’t get anything else.’
“Q. What else did you do?
“A. I don’t think I did anything else. You know it was Rodgers that I spoke to. I asked him if they accepted it, and he didn’t answer, but she did.
“Q. What did you refer to when you asked about the $250?
*497 “A. I referred to the.conversation that I had had a few days before np there, when I told him if they would give up the place and give me full possession, I would give them two hundred fifty dollars.
“Q. Was that before or after suit was brought?
“A. I think it was before.
“Q. Now, after this suit was brought in this court, have you had any more dealings with the Rodgers?
“A. I have not.
‘ ‘ Q. Mr. Hawkins, did you make any arrangement with them at all that day there in the office, of any kind?
“A. No.
“Q. Did you know or understand what they meant or what they were trying to do?
“A. I did not.”
Respecting the claim that the plaintiffs had no title to the strip of land, the bone of contention here, and granting that it was to be included in the contract or was part of the land described, and that the title of the plaintiffs is at present defective in the respect contended, we find in 39 Cyc. 1410, the following rule:
*498 “The American decisions have uniformly held that the vendor cannot be placed in default for defect of title or inability to convey, by tender of performance by the purchaser and demand for performance by the vendor before the expiration of the time fixed by the contract for making a conveyance, the view being taken that it is perfectly legal for one to contract to convey title to land which he does not own. If the title is defective, or if he has no title, at the time of entering into the contract, but such defects are cured at the time fixed for performance, or before any demand for title was made, or at any time before suit commenced to rescind, or before or during the trial of a suit or cross-bill by the purchaser to rescind the contract, or before final decree, a rescission will not be permitted, provided there has been no unnecessary delay or fraud on the part of the vendor by which injury, accrues to the purchaser. And it has been held that even in case of injury caused by delay in making good the title, a rescission will not ordinarily be granted if compensation can be made therefor.”
A leading case is Hanson v. Fox, 155 Cal. 106 (99 Pac. 489, 132 Am. St. Rep. 72, 20 L. R. A. (N. S.) 338). It is not pretended that the defendants offered to pay the balance remaining due on the purchase price. We remember that the contract prescribes that they may pay this on or before five years from the date of the instrument. Even if they had exercised their option to offer payment before the maturity of the contract, still, having thus anticipated the time of payment, the plaintiffs would have a reasonable time thereafter in which to furnish the marketable title. '
On the subject of improvements the books afford a variety of precedents and it is impossible to lay down any hard-and-fast rule. It is made the subject of statute in Georgia to the effect that a trespasser may set off permanent improvements enhancing the value of the land as against the claim for use and occupation. A similar provision is found in bur Code in Section 330, L. O. L., where the defendant in ejectment is entitled to set off against damages for the withholding of the premises, the value of permanent improvements made upon the property while holding under the color of title adversely to the claim of the plaintiff in good faith. This, however, relates to actions at law. It is held in Seymour v. Cleveland, 9 S. D. 94 (68 N. W. 171), that a vendee is not an adverse holder in good faith under contract to purchase so as to secure compensation for improvements under the statute of that state. In Putnam v. Ritchie, 6 Paige (N. Y.), 390, the mother of certain defendants who were heirs of a deceased tenant under a long lease surrendered it without authority. The landlord made improvements on the
“This does not lead to the conclusion that the vendor can be compelled to pay for costly changes which he did not order and does not desire, and which, though valuable, are not of a character useful to him. Such a result is obviated by the terms of the decree. If the vendor elects to take back the land, he must return the purchase money less damages and rent. If the land has been improved, he must allow the vendee for the enhancement in value occasioned thereby, before he can take the land thus improved. But the vendee cannot force the vendor to pay for the building or other meliorations. "When the vendee asks compensation therefor, another factor is injected into the case, whereby he loses the absolute right to the purchase money and forces an accounting under which he can secure only what legally comes to him on a sale of the property. The rights of the parties must be adjusted; and upon the vendor’s paying the vendee what is equitably due for improvements and return of purchase money, the vendor has the option to take the land under the terms of the rescinded contract. If he does not desire to exercise this option, the property should be sold, the proceeds should be first applied to the payment of what is due the vendor, and the balance should be paid over to the vendee. In this way the rights of both parties are fully preserved. The vendor is not obliged to buy the improvements, though to protect his interest he may use his special judgment against the land as cash at the sheriff’s sale. At the sale the vendee also*502 may get the benefit of the enhanced price due to the improvement. ’ ’
See, also, Moore v. Giesecke, 76 Tex. 551 (13 S. W. 293).
The object of this suit is to establish a price which the defendants must pay or be foreclosed and excluded from the premises. Some payments have been made and it is stipulated in the contract that these are forfeited if the defendants shall make default. It is said in 39 Cyc. 2004 :
“However, the terms of the contract itself, or the purchaser’s own conduct or default, may work a forfeiture of such payment, thereby depriving the purchaser of his right to recover the purchase-money paid”; citing many authorities.
The defendants agreed to pay a balance of $9,000 and interest. This is subject to possible deductions on account of defect in title to the 14-foot strip mentioned, if it be true that the title is defective. The defendants are entitled to litigate this question under proper pleading. The record before us is not sufficient to enable us to determine that matter.
It is possible that the road was initiated under the law as it stopd prior to the act of February 24, 1903 (Laws 1903, p. 262), rendering it amenable to Section 4821, B. & C. Comp., providing that
“if any part of any road in this state shall not be opened for four years after or from the time of its location, the same shall become vacated.”
Again, title by prescription may have been acquired up to the line of the fence prior to the enactment of Section 6372, L. O. L., preventing adverse user, however long continued, from becoming the basis of title to land within the lines of an established county road. It may be, too, that the proceedings by which the laying
If the defendants are found to be entitled to a deduction under such cases as McCourt v. Johns, 33 Or. 561 (53 Pac. 601), the net remainder will be the price to be charged against them on strict foreclosure, and a decree should be entered by the Circuit Court allowing them a reasonable time, to be fixed by that court, in which to pay the balance thus computed. The decree of the Circuit Court should also provide that in default of payment as prescribed the land should be sold and the proceeds of sale.applied to the payment of the balance of the purchase price and taxes thus ascertained, and that the overplus, if any there be, shall be paid to the defendants Eodgers. In this way, the defendants will get the benefit of whatever enhanced value they have conferred upon the land, for it will be reflected in the public sale and will be an inducement to bidders to purchase. On the other hand, the plaintiffs may protect their interest by bidding at the sale and making the property bring enough to satisfy their claim for purchase price. The plaintiffs agreed to sell. In that respect their contract would be carried out by means of the public sale and they cannot complain. The defendants agreed to buy and pay a purchase price. They have the option of paying the adjusted price and taking the land. They also have the alternative of allowing it to go to sale where their supposed betterments will possibly attract bidders who will give more for the land than if there were no improvements upon it.
“It does not follow, however, that the court will always declare a strict foreclosure of the contract. - It may also decree a foreclosure by a sale of the land in the ordinary way, although the title has not passed from the vendor, dependent upon the exigencies and the equities of the case”; citing Security Savings Co. v. Mackenzie, 33 Or. 209 (52 Pac. 1046).
As equity acquired jurisdiction over the parties and the subject matter before the commencement of the action at law, the latter proceeding should be permanently enjoined and the whole matter worked out to final solution in this suit. The result attained by this process will be a foreclosure of the contract on equitable principles. The performance of the terms of such a decree will operate to leave the parties where it found them, each exonerated from obligation to the
Modified and Remanded.
Denied April 15, 1919.
Rehearing
On Petition for Rehearing.
(179 Pae. 905.)
Petition for rehearing denied.
Mr. H. E. Slattery, for the petition.
Mr. G. A. Hardy and Mr. A. E. Wheeler, contra.
In Bane.
Counsel for appellants presents a number of propositions upon which it is urged that a rehearing should be granted. The first of these to be considered calls our attention to the following quotation from the opinion:
“The omnibus motion to strike out was rightfully overruled even as to the matter defectively pleaded.”
This, of course, was a clerical error, regarding which steps have already- been taken toward making the necessary correction in the published reports. The statement of the ease, preceding the opinion, shows that the writer clearly had in mind the true disposition of the motion. What the court intended to say was:
*506 ‘ ‘ The omnibus motion to strike out, should have been overruled even as to matters defectively pleaded.”
It is also strenuously urged that the evidence abundantly establishes the rescission of the contract. Upon this point it may be said that counsel refuses to distinguish a rescission by agreement of the parties from a rescission brought about by operation of law. As clearly pointed out by Mr. Justice Burnett, in the former opinion, a rescission by agreement of the parties is a contract, and before the contractual relation can exist, there must be a meeting of the minds upon the terms of the agreement, or there is no contract resulting from the negotiations. We therefore repeat that the evidence discloses affirmatively that the parties did not understand the terms alike, and did not, in fact, agree upon the terms of a rescission. It follows that a mutual rescission, such as is pleaded by the defendants was not proven.
The other questions discussed in the petition are sufficiently considered in the former opinion.
A rehearing is denied.
Modified. Rehearing Denied.