Capital Sav. & Loan Ass'n v. Convey

• Decision Date: 27 November 1933
• Docket Number: 24700.
• Citation: Capital Sav. & Loan Ass'n v. Convey, 27 P.2d 136, 175 Wash. 224 (Wash. 1933)
• Court: Washington Supreme Court
• Parties: CAPITAL SAVINGS & LOAN ASS'N v. CONVEY et ux.

27 P.2d 136

175 Wash. 224

CAPITAL SAVINGS & LOAN ASS'N v. CONVEY et ux.

No. 24700.

Supreme Court of Washington

November 27, 1933

Department 2.

Appeal from Superior Court, Pierce County; F. G. Remann, Judge.

Action by the Capital Savings & Loan Association, a corporation against W. H. Convey and Eva Convey, his wife, wherein defendants filed a cross-complaint.From a judgment for defendants, plaintiff appeals.

Remanded with directions.

Bigelow & Manier and Yantis & Brodie, all of Olympia, for appellant.

S. A Gagliardi, of Tacoma, for respondent.

BLAKE, Justice.

In 1917, there was erected, by the then owner, a cold storage warehouse on lots 9, 10, 11, 12, and 13, block 11 Orchard's addition to New Tacoma.Some time prior to June 21, 1927, the plaintiff became the owner of the property, and operated it as a cold storage plant.On the last-mentioned date, plaintiff and defendant entered into a contract whereby plaintiff agreed to sell and defendant agreed to buy the property, including equipment of all kinds.In other words, plaintiff sold and defendant bought an operating cold storage plant.No representations or warranties were made by plaintiff, however, as to the structural character of the building or equipment.

The building covered a ground area 90 by 100 feet; the shorter dimension extending north and south.The structure was apparently built as one unit.The basement, however, did not extend under the south 20 feet of the building.Defendant, while denying the he knew of this at the time he purchased the property, admitted that he learned of the fact in 1928.This south 20 feet of the building was a sort of lean-to or addition to the portion of the building over the basement.The latter portion was well constructed and fully adapted to the use for which it was designed.The south 20 feet was of lighter construction and, at the time of trial at least, did not comply with the city ordinance as to carrying load.

In this southerly addition, there were three cold storage rooms and a passageway.The passageway was adjacent to the main building, and provided ingress and egress, not only to the three rooms in the addition, but also to three cold storage rooms in the main building.

The defendant paid $4,000 when the contract was executed.He agreed to pay $50 on the first of July, 1929, and $50 a month thereafter until the balance was paid.He also agreed to pay taxes and insurance.He made the payments of $50 a month until April, 1931, since which time he has made no further payments, although two inconsequential items were credited to him by plaintiff on account of collections of insurance made by the latter for small fire losses.

In November, 1931, the floor in two of the storerooms and a portion of the passageway in the addition to the main building gave way.At the time, it would have cost less than $600 to restore it to the condition it was in at the time defendant entered into the contract to buy the property.To rebuild it with a carrying capacity required by the building ordinances would cost $1,500 to $2,500, in the judgment of various building contractors who testified.One who testified for defendant said that for $3,300 the addition could be built, with basement, to conform to the main structure.

Each party claiming the other responsible for the restoration, and each refusing to repair, plaintiff brought this action to forfeit the contract, forfeit payments made by defendant, and for possession of the property.The defendant countered with a cross-complaint, praying for rescission.The court granted a rescission, and awarded defendant $8,279.16.This amount covered payments on the contract, taxes, insurance premiums, and cost of improvements made on the property by defendant.Plaintiff appeals.

Appellant contends that, in the absence of fraud, misrepresentation, or express guaranty, the purchaser takes the risk of quality.This is doubtless the generally accepted rule as to executed contracts.It may be conceded that this rule is applied to executory contracts, as well, by a majority of the courts.But a substantial minority, of which this court is one, hold that loss, occurring Before the time fixed for performance, without the fault of either party, falls on the vendor.Libman v. Levenson,236 Mass. 221, 128 N.E. 13, 14, 22 A. L. R. 560(where the cases on the subject are assembled in an extensive note);Conlin v. Osborn,161 Cal. 659, 120 P. 755;Page v. Loeffler,146 La. 890, 84 So. 194, 22 A. L. R. 563;Ashford v. Reese,132 Wash. 649, 233 P. 29.

In the case of Libman v. Levenson, supra, Justice Rugg, dealing with a case involving the collapse of a retaining wall, said: 'This hardly can be regarded as an open question in this commonwealth.In Thompson v. Gould,20 Pick, 134, a contract had been made for the purchase and sale of land but Before the time for performance the house thereon was burned.It was said at page 138: 'Nor could this contract be enforced by a court of equity having jurisdiction of the subject matter, for by the destruction of the house the defendant is no longer able to perform his part of the contract.He may make compensation for the destruction of the house, but generally a purchaser, independently of special circumstances, is not to be compelled to take an indemnity, but he may elect to recover back the purchase money, if paid in advance, and if the vendor refuses or is unable on his part to perform the contract, and the purchaser has no legal remedy to recover damages.''

This brings us to the question as to whether respondent is entitled to rescission on the ground of partial failure of consideration....