Blondell v. Beam

• Decision Date: 20 April 1966
• Citation: 243 Or. 293,413 P.2d 397
• Parties: Ralph C. BLONDELL and Goldie V. Blondell, husband and wife, Appellants, v. Walter BEAM and Leona Beam, husband and wife, Respondents.
• Court: Oregon Supreme Court

Page 397

413 P.2d 397

243 Or. 293

Ralph C. BLONDELL and Goldie V. Blondell, husband and wife, Appellants, v. Walter BEAM and Leona Beam, husband and wife, Respondents.

Supreme Court of Oregon, Department 1.

Argued and Submitted Feb. 2, 1966.

Decided April 20, 1966.

Donald S. Kelley, Roseburg, argued the cause for appellants. With him on the briefs were Kelley, Garrison & Lasswell, Roseburg.

Warren A. Woodruff, Roseburg, argued the cause for respondents. With him on the brief was George Luoma, Roseburg.

Before McALLISTER, C.J., and PERRY, GOODWIN, DENECKE and SCHWAB, JJ.

SCHWAB, Justice pro tem.

Plaintiffs brought suit to enforce the strict foreclosure clause of a land sale contract. They appeal from a decree denying foreclosure in any form and reinstating the contract upon payment by the vendees of past due taxes. The issue is whether a court of equity has the power to deny relief to a vendor in the face of proof of a material default not waived by vendor; or whether the court's power to do equity is restricted to the exercise of discretion in determining what form of relief shall be granted. We conclude that the rule in Oregon has been and should continue to be the latter.

In December of 1961 plaintiffs (vendors) entered into a contract with the defendants (vendees) for the sale of certain real property. The purchase price was $25,000, payable $4,000 down and the balance in annual installments with interest on the unpaid balance at the rate of 4% Per annum. Time was made the essence of the contract which provided that the vendees were to pay all taxes before they became past due. The contract included a provision giving the seller the right to strict foreclosure by suit in equity in the event of a default by purchasers.

When sellers discovered that real property taxes for the years 1961--64 in the amount of $927.38 were past due and unpaid they brought this suit in equity seeking strict foreclosure.

Before suit was brought the vendees by timely payments of principal and interest had reduced the balance due to $19,446.66. Prior to the commencement of the suit Douglas county took a portion of the land in order to widen a county road, paying $1,650 for the portion taken to the vendors who applied it against the principal. Thus when the complaint was filed the balance owing on the contract was $17,796.66.

After suit was filed the defendants tendered into court the amount of the past due taxes and filed an answer setting forth two affirmative defenses: (1) that the time essence clause was waived by the vendees' acceptance of annual payments after the default of the vendees; (2) that the proceeds from the eminent domain award should have been paid directly to the vendees rather than applied against the principal.

The trial court properly found the affirmative defenses to be without merit. As to the first defense, there was no evidence of waiver by the vendors. As to the second defense, the vendees waived any claim to the $1,650 Douglas county paid for the portion of land it took when they computed their 1963 and 1964 annual payments on the basis of the principal balance being reduced by the amount of the eminent domain award.

After making these findings of fact, the trial court decree provided:

'1. That the plaintiffs' complaint be dismissed and that the clerk of the above entitled court shall pay forthwith the sums tendered by the defendants for taxes to the tax collector of Douglas County, Oregon and shall pay the sums tendered by the defendants to the plaintiffs on the amounts due under said contract.

'2. That the plaintiffs shall have judgment against the defendants for plaintiff's attorney's fees in the sum of $200.00 plus costs incurred in the bringing of said foreclosure suit excepting that no trial fee shall be allowed.

'3. That said contract shall be reinstated and the parties from hence forward required to carry out their respective obligations under said contract.'

The transcript discloses that the trial judge, in reaching his decision, relied on Gulick v. Copeland, 186 Or. 640, 648--649, 207 P.2d 1042, 1045, most recently reaffirmed by this court in Leighton v. Hawkins, 236 Or. 638, 389 P.2d 460, where this court approved the language in Harrington v. Birdsall, 38 Neb. 176, 186--187, 56 N.W. 961, 964 (1893):

'* * * The remedy by strict foreclosure of land contracts cannot be resorted to in all cases. The remedy being a harsh one, courts of equity will decree a strict foreclosure only under peculiar and special circumstances. Applications of that character are addressed to the sound legal discretion of the court, and they will be granted in cases where it would be inequitable to refuse them. If the vendee or purchaser has not been guilty of gross laches, nor unreasonably negligent in performing the contract, a strict foreclosure should be refused on the ground that it would be unjust, even though the vendee may have been slightly in default in making a payment. So, for the same reason, a strict foreclosure will be denied where the premises have greatly increased in value since the sale, or where the amount of unpaid purchase money is much less than the value of the property. On the other hand, if the vendee, without sufficient excuse, fails to make his payments according to the stipulations of his contract, and for an unreasonable time remains in default, the vendor may have a strict foreclosure of the contract for the sale and purchase of the land, unless some principle of equity would be thereby violated.'

The Gulick and Leighton cases do not hold that if a strict foreclosure is inequitable the court may refuse to grant any relief. It has long been the rule in Oregon that,

'* * * (A) vendor under such a (land sale) contract has a right * * * to go into a court of equity upon the default of his vendee, * * * and in such suit the court may either decree a strict foreclosure or a sale of the land, as the equities of the case may suggest.' Security Savings & Trust Co. v. Mackenzie, 33 Or. 209, 214, 52 P. 1046, 1047.

In Temple Enterprises v. Combs, 164 Or. 133, 158, 100 P.2d 613, 623, 128 A.L.R. 856, this court, in decreeing specific performance, said:

'* * * (I)t must be remembered that the discretion of a court of equity in cases of this character is judicial in its nature and the relief is not 'of grace'; that, within the domain of equity, judicial remedies are not in any true sense discretionary but are governed by the established principles and rules which constitute the body of equity jurisprudence.'

The holding of the Temple Enterprises case is applicable here, for a suit to strictly foreclose a...