Butler v. Cortner
| Decision Date | 09 March 1926 |
| Citation | 246 P. 314,42 Idaho 302 |
| Parties | ERNEST L. BUTLER, Respondent, v. H. J. CORTNER and ALICE J. CORTNER, Appellants |
| Court | Idaho Supreme Court |
VENDOR AND PURCHASER-CONTRACT OF PURCHASE-TIME OF THE ESSENCE-DEFAULT OF PURCHASER-TENDER BY PURCHASER AFTER DEFAULT.
1. Provision in contract, that if purchaser failed to make stipulated payments at time and in manner provided deed should be returned to vendor and contract of sale held for naught and void in all its terms, makes time of the essence of the contract.
2. Under contract for sale of real estate, providing that on default in payments for more than thirty days deed should be returned by escrow-holder and contract held for naught tender of payments by purchaser's agent after default and after notice to escrow-holder of vendor's intention to stand on terms of contract would not authorize action for return of instalments theretofore paid, relief if any being in equity for specific performance or other appropriate remedy.
APPEAL from the District Court of the Third Judicial District, for Ada County. Hon. Raymond L. Givens, Judge.
Action at law for return of installments of the purchase price on contract for sale of real estate and to subject the property to a lien therefor. Judgment for plaintiff. Reversed.
Judgment reversed, with costs to appellants.
Elliott & Healy, J. B. Eldridge and Morgan & Smith, for Appellants.
A purchaser of real property who, having paid a part of the purchase price, breaches the contract by his failure to make payment of a subsequent instalment when due may not recover back the money paid. The payment made is forfeited regardless of the presence in or absence from the contract of a stipulation for forfeiture.
"Time is made the essence of the contract by a clause in the contract providing that if payment is not made in accordance with its terms, it shall be null and void." (36 Cyc. 713, 39 Cyc. 1369; Grey v. Tubbs, 43 Cal. 359; Kimball v. Tooke, 70 Ill. 553; Martin v. Morgan, 87 Cal. 203, 22 Am. St. 240, 25 P. 350; Wilcoxson v. Stitt, 65 Cal. 596, 52 Am. Rep. 310, 4 P. 629; Milnor v. Willard, 34 Ill. 38; Kemp v. Humphreys, 13 Ill. 573; Smith v. Brown, 10 Ill. 309; Schumann v. Mark, 35 Minn. 379, 28 N.W. 927; Lipscomb v. Faqua, 103 Tex. 585, 131 S.W. 1061; Coughran v. Bigelow, 9 Utah 260, 34 P. 51; affirmed, 164 U.S. 301, 17 S.Ct. 117, 41 L.Ed. 442; Quinlan v. St. John, 28 Wyo. 91, 201 P. 149, 203 P. 1088; Pickens v. Campbell, 104 Kan. 425, 179 P. 343.)
The rule is well established in Idaho that where time of payment is made the essence of the contract by the use of appropriate language showing that it was the intention of the parties it should be so, the failure of the vendee to make, or to tender, payment when due, terminates his rights under the contract and he cannot recover payments theretofore made in an action at law, nor exact specific performance of the contract unless his default be excused from some cause cognizable in equity. (Machold v. Farnan, 14 Idaho 258, 94 P. 170; Hall v. Yaryan, 25 Idaho 470, 138 P. 339; Papesh v. Wagnon, 29 Idaho 93, 157 P. 775; Rischar v. Shields, 26 Idaho 616, 145 P. 294; Prairie Dev. Co., Ltd., v. Leiberg, 15 Idaho 379, 98 P. 616; Bell v. Stadler, 31 Idaho 568, 174 P. 129.)
The rescission of a contract of purchase of real estate is a new contract, and whether or not a rescission has occurred in the case is a question of fact to be determined from the conduct and conversations of the parties showing their intention and the meeting and agreement of their minds with respect to the repayment by appellants to respondent of the instalment of the purchase price paid prior to his default. (Holverson v. Evans, 38 Idaho 428, 224 P. 1067; Tusco v. Green, 194 Cal. 574, 229 P. 327; Aderholt v. Wood, 66 Cal.App. 666, 226 P. 950; Quinlan v. St. John, 28 Wyo. 91, 201 P. 149; Glock v. Howard & Wilson Colony Co., 123 Cal. 1, 69 Am. St. 17, 55 P. 713, 43 L. R. A. 17.)
The two writings, the contract itself and the escrow agreement, being contemporaneous instruments, relating to the same subject and one expressly referring to the other, must be construed together as stating the agreement of the parties. (39 Cyc. 1296.)
Reddoch & Hunter and Martin & Martin, for Respondent.
The acts of defendant Cortner in refusing to accept the offer of payment of the principal and interest then due to him under the contract of purchase made on January 5, 1922, by plaintiff, coupled with an offer on the part of the plaintiff to pay all taxes and water bills then due, and his refusal again on January 6, 1922, to accept such payment, coupled with an offer to pay said taxes and water bills, and his instructions to the bank to refuse said offer of payment and the tender of the money, together with his statements on each of said occasions that he rescinded the contract of purchase, and that the transaction was ended, his withdrawal of the escrow papers thereafter from the custody of the bank, coupled with his acts on January 15, 1922, in going to the farm in the night-time and in the absence of plaintiff removing the furniture and belongings of plaintiff therefrom, and his refusal to restore possession when demanded, amounted to a rescission of the contract, which the plaintiff had a right to accept, and thereupon recover from the defendant the payments which he had made. (Maffet v. Oregon & C. R. Co., 46 Ore. 443, 80 P. 489; 36 Cyc. 713; 39 Cyc. 1388, 2002, 2004; 27 R. C. L. 641; Perrin v. Chidester, 159 Iowa 31, 139 N.W. 930; Murphy v. Dalton, 139 Mich. 79, 102 N.W. 277; Jones v. Grove, 76 Wash. 19, 135 P. 488; Hurley v. Anicker, 51 Okla. 97, 151 P. 593, L. R. A. 1918B, 538; Castelberry v. Pierce's Admr., 5 Stew. & P. (Ala.) 150, 24 Am. Dec. 774; Remington Arms Union etc. Co. v. Gaynor Mfg. Co., 98 Conn. 721, 120 A. 572; Pierce v. Staub, 78 Conn. 459, 112 Am. St. 163, 62 P. 760, 3 L. R. A., N. S., 785; Munson v. Apartment & Hotel Inv. Co., 62 Utah 13, 218 P. 109; 6 R. C. L., sec. 323, p. 943; In re Morgantown Tin Plate Co., 184 F. 109; Armsby Co. v. Grays Harbor Commercial Co., 62 Ore. 173, 123 P. 32; McDaniel v. Gray & Co., 69 Ga. 433.)
Forfeitures are not favored either in law or in equity. Courts are reluctant to declare and enforce a forfeiture if by reasonable interpretation it can be avoided. (5 Pomeroy's Eq. Jur., 4th ed., secs. 2238, 4997; Castleberry v. Hay, 8 Idaho 670, 70 P. 1035; 6 R. C. L. 943; Hansbrough v. Peck, 72 U.S. 497, 18 L.Ed. 520; LaShonse v. Herrick, 39 Idaho 67, 225 P. 1019; Abercrombie v. Stoddard, 39 Idaho 146, 228 P. 232.)
Even where a contract provides for a forfeiture a party thereto will not be permitted to declare such forfeiture after the party in default has tendered performance. (Wiseman v. Cottingham (Tex. Civ. App.), 141 S.W. 817; Miller v. Cox, 96 Cal. 339, 31 P. 161.)
Upon failure of consideration or the vendee placing himself in such a position that he cannot fulfill his contract, in a contract for the sale of real property the vendee is entitled to a lien for the amounts paid by him under the terms of the contract. (Wilson v. Sunnyside Orchard Co., 33 Idaho 501, 196 P. 301; Johnson v. Berns, 111 Ore. 165, 209 P. 94, 224 P. 624, 225 P. 727; Meacham v. Burgiss, 1 F.2d 47; Montgomery v. Meyerstein, 186 Cal. 459, 199 P. 800; Wilson v. Smith, 69 Cal.App. 211, 230 P. 963; Tudor v. Raudabaugh, 278 F. 254; Goodrich-Lockhart Co. v. Sears, 270 F. 971; Stewart v. Mann, 85 Ore. 68, 165 P. 590, 1169; Groves v. Stouder, 58 Okla. 744, 161 P. 239; Elterman v. Hyman, 192 N.Y. 113, 127 Am. St. 862, 84 N.E. 937; Davis v. William Rosenzweig Realty Operating Co., 192 N.Y. 128, 127 Am. St. 890, 84 N.E. 943, 20 L. R. A., N. S., 175.)
The mere failure to make a payment of purchase money according to the terms of an agreement will not be held a repudiation of the contract so as to authorize the other party to refuse performance or to rescind. (Abercrombie v. Stoddard, 39 Idaho 146, 228 P. 232; 13 C. J. 613.)
--This is an action at law for money had and received. It grows out of an agreement by respondent Butler to purchase a farm from appellant Cortner. The agreed purchase price of the farm was $ 27,000. Nine thousand dollars was paid at the time of the execution of the agreement, and the payment of a debt, secured by a mortgage on the premises, was assumed. The remaining installments were further evidenced by promissory notes deposited in escrow, one of which, in the sum of $ 1,500 and interest, was due on or before December 1, 1921. In addition, respondent agreed to pay annually the taxes and certain irrigation charges. The agreement was in writing, and contained the following provision:
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