Ashford v. Reese

• Citation: 233 P. 29,132 Wash. 649
• Decision Date: 16 February 1925
• Docket Number: 18397.
• Parties: ASHFORD v. REESE.
• Court: United States State Supreme Court of Washington

233 P. 29

132 Wash. 649

ASHFORD v. REESE.

No. 18397.

Supreme Court of Washington, En Banc.

February 16, 1925

Appeal from Superior Court, Pierce County; Clifford, Judge.

Action by Cora J. Ashford against John L. Reese. Judgment for plaintiff, and defendant appeals. Affirmed.

Tolman C.J., and Bridges and Parker, JJ., dissenting.

P. L Pendleton, of Tacoma, for appellant.

Anthony M. Arntson, of Tacoma, for respondent.

MACKINTOSH J.

In September, 1919, the appellant contracted to sell and convey to the respondent a lot in the town of Ashford, together 'with all improvements thereon,' the improvements consisting of a building and constituting approximately three-fourths of the value of the property. The purchase price was to be $800, payable at the rate of $20 a month, with interest, the purchaser also to pay the taxes. The contract was the ordinary, executory, conditional contract, and provided that in case the purchaser should fail to make the payments provided, within 30 days after notice thereof in writing, the seller would have the right to declare the contract null and void. Upon all payments being made the contract provided that the seller should give 'a deed conveying said premises in fee simple with full covenants of warranty.'

The improvements were totally destroyed by fire in November, 1920, without the fault of either party. At the time of the fire the respondent had paid $420 on the contract, and approximately $80 in taxes. The appellant refusing to replace the improvements, the respondent brought this action to recover the amount she had paid under the contract, on the ground of failure of consideration. To this complaint appellant counterclaimed, asking judgment for the balance due on the contract.

The principal question is whether the respondent is entitled to rescind the contract on the ground of failure of consideration arising from the destruction of the subject-matter.

Many cases are cited from other jurisdictions holding that, under executory contracts of sale, where the property is destroyed without fault of either party, the loss must fall on the vendee. But in those jurisdictions it will be noticed that the courts have given a different effect to such executory contracts than that given by this court. In such jurisdictions it has been held that the executory contract of sale created some title or interest in the vendee, either legal or equitable, and that the loss must follow the title or interest, whereas we have consistently held in numerous cases that an executory contract of sale in this state conveys no title or interest, either legal or equitable, to the vendee, and, the loss following the title, it must be borne by the vendor. The same result obtains upon the theory that the vendee can recover because of failure of consideration.

It is unnecessary to catalogue the cases in which this position has been stated. They have been summarized recently in the case of Schaefer v. Gregory, 112 Wash. 408, 192 P. 968. On the authority of those cases, therefore, it must be held that the respondent was entitled to recover, unless there is something in the appellant's contention that the respondent, being in default, cannot take advantage of the situation to rescind the contract. An examination of the record, however, does not disclose that there is any merit in the appellant's contention that the respondent was in default. Under the terms of the contract, if the payments were not promptly made, the appellant could take advantage of this fact only by giving 30 days' notice, and the record here shows that no such notice was given, and furthermore that, if any default was made by the respondent, it occurred after the destruction of the improvements, which relieved the respondent from making the payments called for. For the reasons stated, the judgment is affirmed.

FULLERTON, MITCHELL, HOLCOMB, and MAIN, JJ., concur.

ASKREN, J. (concurring).

I concur in the foregoing opinion because it follows the previous decisions of this court, although a review of them convinces me that the principles announced therein were not strictly logical nor in harmony with what seems to me the better authority. If this were a new question I should not hesitate to dissent. But the rule being adopted, and the bar of the state having advised their clients thereunder, we should be slow to overrule it. Especially is this true where, knowing the rule, parties can by contract protect themselves as to the loss. The rule itself is not bad, although the reasons which led to its adoption were. The continuance of the rule can work no great hardship, although its first announcement may have because of rights which had arisen prior thereto. It is of the utmost importance that we should adopt a proper rule when the question is first presented, but it is hardly of less importance that stability should attach to our decisions, and not require litigants to appeal to this court to determine whether our previous decisions are still the law. I therefore concur.

TOLMAN C.J. (dissenting).

I cannot agree that at the time of the fire the purchaser had no interest in the property, nor that the loss should fall on the vendor. I concede that in the case of Schaefer v. Gregory Co., 112 Wash. 408, 192 P. 968, this court held that a purchaser under an executory contract of sale of real estate does not acquire any title, legal or equitable, nor any interest, legal or equitable, in the property covered by the contract. I cannot understand how it can be logically said that one who has paid any portion of the purchase price, either great or small, has no manner of interest in the property which he is purchasing. If he had no interest, for what has he been paying his money? How can he protect himself against sales made by a vendor if he have no interest? The recording of his contract will avail him nothing, because, having no interest in the real estate, the contract evidences no interest and is not entitled to be recorded, and consequently cannot be constructive notice to anybody.

If this be so, then the purchaser must, in spite of all he can do, find himself in a position where the vendor may sell the property to an innocent purchaser (innocent because there is no method of giving him notice), and the vendee in the original contract be left with only a claim for damages against his vendor, which he may or may not be able to enforce.

We have held that such a purchaser may insure the property and enforce his contract of insurance. Quinn v. Parke & Lacy Machinery Co., 5 Wash. 276, 31 P. 866. But if he have no manner of interest, what has he to insure? It is well known that it is the common practice of insurance companies to issue policies of insurance to the vendee, particularly under conditional sales contracts, with reference to personal property. If the purchaser have no interest in the property, how can such insurance be enforced? There can be no substantial difference between the rights of the respective parties under a conditional contract for the sale of personal property, and a conditional or executory contract for the sale of real estate, especially where in either case possession passes to the purchaser. If the purchaser obtains no interest in the one, he obtains no interest in the other.

As I see it, it is high time that this court should bring itself into harmony with the settled law of the land as recognized and enforced from the early days of the common law in all jurisdictions where the common law obtains. There is and can be no dispute that the doctrine for which I am contending is a common law doctrine of long standing. Mr. Pomeroy, in his work on Equity Jurisprudence, vol. 5, p. 5050, says:

'Lord Eldon, in Seton v. Slade, states the result on the contract to purchase land thus: 'The effect of a contract to purchase, is very different at law and in equity. At law the estate remains that of the vendor, and the money that of the vendee. It is not so here. The estate from the sealing of the contract is the real property of the vendee. It descends to his heirs. It is devisable by his will; and the question whose it is, is not to be discussed merely between the vendor and vendee; but may be discussed between the representatives of the vendee.'

'The rights of the heir and representatives of the vendor and vendee, on the decease of either before title has passed under a valid contract to convey lands, follow directly from the fundamental principle of equity, that 'in equity, upon an agreement for the sale of lands, the contract is regarded for most purposes, as if already specifically executed. The purchaser becomes the equitable owner of the lands, and the vendor of the purchase-money.' In working out the testamentary rights of the heir and representatives as to the land under the contract for sale, equity considers these rights as if the title to the land had actually passed before the death of the vendor or the vendee. 'Although the purchase-money is unpaid, (if) the contract is valid and binding, it has this remarkable effect, that it converts the estate, so to say, in equity; it makes the purchase-money a part of the personal estate of the vendor, and it makes the land a part of the real estate of the vendee.

'Thus, where the vendee dies, having a contract for lands, but the conveyance has not yet been made to him, the vendee's interest in the lands 'shall be considered as real estate and descend to his heir, or he may devise them by will, and his representatives shall pay the purchase-money out of the assets.' The heir or devisee of the vendee in equity can compel the executor or administrator to pay the unpaid purchase money out of the personalty, for equity regards the transaction as completed, and a conversion to have

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