111 P. 696 | Or. | 1910
Lead Opinion
Miles testified that about September 28,1909, he applied for a postponement in the payment of the money, maturing in two days, and was told by Hemenway that he wanted a quitclaim deed as security for the extension if granted. On cross-examination plaintiff stated that when the quitclaim deed was executed, his mind was not perfectly clear as to the title conveyed. He further said:
“I certainly looked upon it as additional security. * * I would not have given that quitclaim deed if I had had any idea that it would have ended everything so far as my title to the place, or equity, or anything of the kind was concerned. I would have let him begin proceedings in some way before I would have given it. That was my state of mind at the time.”
In referring to the extension granted, Miles was asked by defendant’s counsel:
“Well, didn’t Hemenway, during all that time, have all of that land to secure what you owed him? Your equity, as your attorney says, as well as the legal title?”
“Yes, I suppose so.”
Q. “Then how could the quitclaim deed increase his security?”
A. “Well, as I stated a while ago, my mind is not perfectly clear on that, and was not at that time.”
Hemenway, referring to the conversation which he had with Miles, regarding the extension, testified that he told him:
“ T don’t want this postponed from time to time.’ He says, T don’t either.’ ‘Well, now,’ I says, ‘you give me a quitclaim deed to this property and give yourself plenty of time to get the money — you say you can get it in a very few days — take ten days for it,’ and he says, ‘All right.’ ”
On cross-examination defendant testified that the purpose of taking the quitclaim deed was a desire on his part to get the place back without any legal proceedings, saying:
“I wanted it fixed so that there would not be any law about it. * * I told him I had to have the land or the money when I signed the last contract and got the deed, and he understood it thoroughly and perfectly.”
We think an examination of the testimony referred to will show that while Miles states that Hemenway demanded the execution of the quitclaim deed as further security, plaintiff’s subsequent cross-examination and defendant’s sworn declarations, relating to this branch of the case, establish the fact that there was no meeting of the minds of the parties respecting the giving of additional indemnity, and hence there was no contract for security.
The same conclusion has been reached by the court of last resort of a sister state, where it was held that as the title to the land, agreed to be sold and conveyed, did not pass to the purchaser, that part of a decree foreclos
In Vernon v. Stephens, 2 P. Wms. 66, which was a suit for specific performance, it appeared that an agreement had been made for the sale of land, pursuant to which the purchaser paid part of the consideration and after-wards stipulated to discharge the remainder by a designated day, in default of which to surrender the contract and to lose what he had paid thereon, and it was held that a court of equity would relieve him from the terms of the supplemental agreements with which he had not complied. In deciding that case, the Lord Chancellor, referring to the modified contracts, said:
“And as to these agreements, they were all intended only as a security for payment of the money, which end is answered by the payment of principal, interests, and costs.”
The legal- principle thus announced was reaffirmed in Harris v. Greenleaf, 117 Ky. 817 (79 S. W. 267: 4 Am. & Eng. Ann. Cas. 849) where it was determined that if, after the execution of a contract for the sale of land, the purchaser is induced to execute another agreement providing that upon failure to pay the full amount of the purchase price he should forfeit his contract and all his rights thereunder, the latter instrument, if valid, was merely a form of additional security. To the same effect are the cases of Decamp v. Feay, 5 Serg. & R. (Pa.) 323
The legal title held by Hemenway, in trust for Miles, being in the nature of an equitable lien, which could have been barred by a strict foreclosure, was not, in our opin- ‘ ion, such an interest in the premises as to be governed by the maxim, “once a mortgage, always a mortgage,” for the legal title and the co-ordinate equitable lien never in a strict sense created a mortgage (Glendenning v. Johnston, 33 Wis. 347), and the quitclaim deed, though it may have been designed to evidence a surrender of the premises for a condition subsequent, the conveyance added no security to that already held by defendant. All the permanent improvements placed on, or made to, the land by Miles augumented the interest which Hemenway held by retaining the legal title, without'the execution of the quitclaim deed. The possession of the premises not having been surrendered by plaintiff, pursuant to the terms of his deed, such pretended conveyance was useless, except as affording evidence, and a strict foreclosure or some other equitable intervention was essential to bar his rights or to cancel the contracts. The quitclaim deed did
If defendant had by any means prevented plaintiff from obtaining a loan of money, so that the latter’s estate in
Frank Chambers testified that in August, 1909, plaintiff applied to borrow money to take up the Hemenway contract and the witness refused the request. Referring to a conversation had with Miles at that time, Chambers said:
“I told him if he did not find anybody that would take it up, to come back and 'see me again. I think he saw me twice between that and the time of the last talk. That was October 11th, I think, was the date. That morning he came in about — if I remember — the hour was about nine o’clock. I turned him down, and told him, ‘No, I didn’t want it.’ But I told him again, ‘You go out and see if you can’t find somebody that will take it up, and if you can’t, why, come back.’ At that time, I had not approached Mr. Hemenway to sell the notes * * I sent him out three times that forenoon to see if he could not find somebody else that would take it up. * * I figured with him. But I took the matter up of figuring on the indebtedness of the place, and found what it would be. After I found what it would be, I then sent him out, I think, and told him it did not suit me. And then I went to look up Mr. Hemenway. It took me possibly half an hour to find - him. And I asked him — I told him I had some notes — and asked him if he wanted them. He did not give me a very satisfactory answer. I told him I*331 would like to know very soon if he wanted them, and he said, ‘Well, I will see you again.’ I told him I wanted him to see me very shortly; and I then went back to the store and attended to some other business, and took the matter up again with Mr. Miles. And in the meantime, I think while I was sitting there that time, I had a telephone call from the bank. That call was on other matters entirely. Didn’t pertain to the Miles matter. But very soon I had another call, that Mr. Hemenway was at the bank waiting for me. I then went up and closed the deal with Mr. Hemenway. After that I went back and talked with Mr. Miles some. It was then after 11 o’clock, I think, and at a quarter to 12 — I think it was a quarter to 12 — or in a short time, I told him he had better go and look for somebody else to take the matter up. I think it was somewhere between half-past 11 and a quarter to 12, and he went out again and came back, I think after that. * *
“Q. Had you at any time assured him that you wouid furnish him the money?”
“A. I had at no time done anything but figure on what was against the place. He told me all that I asked, that I know of. He told me what it was. But at no time did I do anything but refuse to take it up, except to figure on what would be the conditions, in case it looked good enough for me to take it.”
“Q. There has been some indication here that you and the bank were working together and trying to prevent Mr. Miles from raising the money, to help Hemenway out. What is the fact about that?”
“A. The fact was, that I was trying to collect money that was due from him. I was putting myself in a position to see how best I could do it.”
The testimony of Chambers has been set forth at length, a careful perusal of which convinces us that he had not promised, and never intended, to advance the money to plaintiff. If, by the invitation to call upon the hardware company before he surrendered his interest in the property, or by furnishing to Chambers a statement of the sums due on the land, or in not sooner informing him that he could not obtain a loan from the corporation, Miles
“And in consideration of said extension of time, the party of the second part [Miles] has executed to the party of the first part [Hemenway] a quitclaim deed to all his right, title, and interest in said property, which said deed, together with this contract is to be deposited in the First National Bank where the other deed and contract is deposited, and said bank is instructed and the parties hereto as follows: That if the said party of the second part fails to make said payments, then said original deed and contract, together with this contract and deed, is to be delivered to the party of the first part, and that all contracts and agreements between the parties hereto shall be at an end without any claim upon the part of either against the other.”
The decision herein is grounded on the fact, which we think was established by a preponderance of the testimony, that after the expiration of the time limited by the second agreement, the officers of the bank, pursuant to plaintiff’s direction, delivered the papers held in escrow to defendant, who accepted them. This transaction was tantamount to a declaration of forfeiture by Miles to which Hemenway assented, which acquiescence constituted the required affirmative act on his part to complete
These notes were at the bank all the time after they were executed and Hemenway understood, at least, that they were there as an escrow. In referring to the notes and to the directions which he gave to the cashier at the time the contracts and deeds were returned to him, defendant testified:
“I told Snodgrass, I think it was, to hand them to Mr. Miles. They did not belong to me.”
If the cancellation of the land contract depended upon Hemenway’s option to - declare a forfeiture, he would probably have been required to tender to Miles the negotiable instruments, as a condition precedent to the exer
It is insisted that in refusing to allow an additional reply and a supplemental complaint to be filed, errors were committed. The application to file these pleadings was addressed to the sound discretion of the court, and in denying the requests no abuse of careful judgment is manifest.
It follows from these considerations that the decree should be affirmed, and it is so ordered. Affirmed.
Rehearing
Rehearing allowed April 4, decided July 5, 1911.
On respondent’s rehearing decided August 1, 1911.
On Rehearing.
[117 Pac. 273.]
Opinion
The plaintiff being in the possession of certain real estate under a contract for the sale thereof from the defendant to himself, having paid a portion of the purchase price, began this suit to determine the adverse interest of the defendant in the land in question. Having been defeated in the circuit court, the plaintiff appealed, and this court heretofore affirmed the decision of the circuit court: Miles v. Hemenway, 111 Pac. 696. A rehear
It is only necessary at this time to consider the legal effect of the quitclaim deed and the accompanying agreement there mentioned. It should be remembered that the plaintiff found himself unable to meet one of the installments due upon the contract, whereupon he executed a quitclaim deed to the defendant for the premises, and at the same time as part of the transaction the parties executed the writing here set out which for convenience will be called “Exhibit C.”
“This agreement, entered into by and between V. Hemenway, party of the first part, and S. W. Miles, party of the second part, witnesseth: That whereas, on the 12th day of July, 1907, said parties entered into a contract by the terms of which the first party agreed to convey to the party, of the second part the northeast quarter of section 32, township 17 south, range 4 west, Willamette Meridian, containing 160 acres more or less, and whereas the $1,000.00 with interest on deferred payments is now due and the party of the second part is unable to make said payments; and whereas, the party of the second part desires an extension of time as follows: He desires until October 11th, 1909, at 12:00 o’clock A. M. of said day in which to make said payments and in consideration of said extension of time the party of the second part has executed to the party of the first part a quitclaim deed to all his right, title and interest in said property, which said deed, together with this contract, is to be deposited in the First National Bank where the other deed and contract is deposited and said bank is instructed and the parties hereto as follows: That if the said party of the second part fails to make said payments, then said original deed and contract, together with this contract and deed, is to be delivered to the party of the first part, and that all contracts and agreements between the parties hereto shall be at an end without any claim upon the part of either against the other.
*338 “In witness whereof, the said parties have hereto set their hands and seals this first day of October, 1909.
“V. Hemenway [Seal.]
“S. W. Miles [Seal.]
“In the presence of
“A. C. Woodcock,
“Zelma Edwards.”
We adhere to the principle laid down in the former opinion that responsible parties may voluntarily settle their respective interests and estates in land and may discharge their obligations to each other by a conveyance of land; but, as in all other cases, such a conveyance must be unconditional and be taken in payment or discharge of subsisting obligations.
A strict analysis of Exhibit C discloses by recitals that the party of the second part is -unable to make the payments required by the original contract, including not only the one then due, but also the deferred payments. It also recites that the party of the second part desires an extension of time, but it does not disclose anywhere that Hemenway agreed to extend the time.
So far as mere words are concerned, the original contract is in form not less absolute than the quitclaim deed and Exhibit C in providing for a forfeiture in case the plaintiff fails to pay to the uttermost farthing. But equity looks to the substance rather than to the form. Things which are equal to the same thing are equal to each other, and if, as shown in the former opinion, it would require a strict foreclosure to divest the plaintiff of his equitable
At the proper time, the plaintiff here moved the circuit court for leave to file a supplemental complaint, alleging, in substance, what has been here stated about that judgment, relying upon the matter as a confession of the title of Miles in the land and a waiver on the part of Hemenway of the right to declare a forfeiture on the original contract. The court denied his motion to file the supplemental complaint, and also refused to allow Miles to introduce the judgment roll in the law action in evidence for the same purpose in the equity case.
Without deciding whether or not the court erred in denying the right to file the supplemental complaint or to give these matters in evidence, it sufficiently appears from plaintiff’s own record that something is due from him to Hemenway on account of those transactions. Miles in
The conclusion follows that the decree of the circuit court will be reversed and the cause remanded with directions to the circuit court to ascertain the amount due from Miles to Hemenway on the judgment mentioned above, and then to enter a decree, in substance, that the plaintiff Miles shall pay into that court for the use of the defendant, on or before 90 days after the date of such decree, the sum of $3,800, with interest thereon at the rate of eight per cent per annum since October 1, 1908, until paid, together with the amount due upon such judgment at the time of payment, and that in default of such payment, in full, the plaintiff be forever barred and excluded as upon a strict foreclosure from asserting or claiming any right, title, interest, or estate, either in law or equity, to the real property in question; and, further, that upon such payment being made as required by the decree, the defendant shall, within ten days thereafter, make, execute under his hand and seal, in the presence of two subscribing witnesses, acknowledge so as to entitle the same to record, and deliver to the clerk of the circuit court for the plaintiff a deed conveying from the defendant to the plaintiff the unincumbered fee-simple title to the real property in question and deliver to the clerk for the plaintiff the promissory notes mentioned in the pleadings in this suit, or that in default of the execution and delivery of such deed as so required, the decree shall stand and operate in all things as such deed of conveyance.
Neither party should recover costs or disbursements from the other. Reversed.
Rehearing
Decided August 1, 1911.
Respondent’s Petition for Rehearing.
Opinion
The defendant’s petition for rehearing presents no new question, argument, or precedent to lead the court to a conclusion different in the main from the decision at which we arrived on the rehearing of this case.
It is only necessary to reiterate in substance that the effect of the dealings between the parties relating to the Miles deed deposited in escrow and the writing, Exhibit C, accompanying the same, was to substitute one conditional agreement for another concerning the sale of the land. The condition makes it analogous to security for the balance of the purchase price remaining unpaid, and requires foreclosure to divest the purchaser of his equity arising from his having paid part of the price, entered into possession and made valuable permanent improvements on the land. Of course the parties might settle their differences by the vendee making an absolute deed to the vendor and surrendering possession; but when the deed is attended with a conditional defeasance, as this one was, it falls short of a final conclusion of the whole matter. Moreover, the broad principles of equity are not fettered by fractions of an hour and a court of conscience will go far to prevent an overreaching forfeiture. The defendant, however, suggests that he has paid some taxes since the institution of this suit that should be taken into the account and the plaintiff states that the defendant has encumbered the land with a mortgage for $2,000 which ought to be abated from the balance of the purchase price necessary to be paid on the strict foreclosure decreed by this court.
Without comment upon this phase of the already complicated situation the decree here will be entered as already
Further Order: Reversed.