Central Life Assur. Soc. v. Impelmans

• Citation: 13 Wn.2d 632,126 P.2d 757
• Decision Date: 04 June 1942
• Docket Number: 28614.
• Parties: CENTRAL LIFE ASSUR. SOC. v. IMPELMANS.
• Court: United States State Supreme Court of Washington

126 P.2d 757

13 Wn.2d 632

CENTRAL LIFE ASSUR. SOC. v. IMPELMANS.

No. 28614.

Supreme Court of Washington

June 4, 1942

Department 1.

Suit by the Central Life Assurance Society (Mutual) against Elsie Impelmans to forfeit a real estate contract and to recover possession of the realty described therein, wherein the defendant filed a cross-complaint seeking rescission of the contract and recovery of all sums theretofore expended in connection with the purchase of the realty. From a decree in favor of the defendant, the plaintiff appeals.

Decree reversed with direction.

Appeal from Superior Court, Spokane County; R. M Webster, judge.

Tustin & Chandler, of Spokane, for appellant.

E. M Connelly, of Spokane, and J. E. Close, of Olympia, for respondent.

STEINERT Justice.

Plaintiff brought suit to forfeit a real estate contract and to recover possession of the property described therein. Defendant answered, denying the material allegations of the complaint, and by cross-complaint sought rescission of the contract and recovery of all sums which she had theretofore expended in connection with the purchase of the property. Upon a trial without a jury, the court entered a decree denying plaintiff's prayer for forfeiture, adjudging that the contract be rescinded, and directing that the defendant recover from the plaintiff a specified total amount including her payments on the contract price, her expenditures for taxes, insurance, and improvements, and the sum of $3,260 which defendant had previously paid to a third party for his equity in the property, together with interest on all these items. The plaintiff was granted an allowance for the rental value of the premises while in the defendant's possession, to be set off against the interest item allowed to the defendant. Plaintiff has appealed.

Appellant, Central Life Assurance Society, is a corporation having its home office in Des Moines, Iowa, and is qualified to do business in this state, where it invests funds in real estate mortgages. In such matters, it is represented in Spokane by the firm of Murphey, Favre & Co. In 1935, appellant acquired the property here involved through the foreclosure of a mort gage which had been executed about ten years Before . On or about December 17, 1936, appellant entered into a written contract agreeing to sell the property to one Mae Sims. This contract, which is the one involved in this litigation, described the property as being.

'Lot three (3) in Block thirty-three (33) of Stratton's Addition to Spokane Falls (now Spokane) in the City of Spokane; also a strip West of said Lot three (3) more particularly described as follows:

'Beginning at the Northwest corner of said Lot three (3) thence South along the West line of said Lot, fifty-eight (58) feet; thence West of the East line of Bingaman's Addition; thence North along the East line of Bingaman's Addition, fifty-eight (58) feet; thence East to the place of beginning; ALSO

'Lots one (1) and two (2) except the North one hundred eight (108.5) and one-half feet thereof in Block Sixteen (16) of Bingaman's Addition to Spokane Falls (now Spokane) in the City of Spokane.'

The present appeal concerns particularly the fifty-eight foot strip referred to in the second paragraph of the above description. The map which follows will contribute to a clearer understanding of the issues here presented.

(Image Omitted)

The heavily shaded lines on the map mark the boundaries of the property covered by the contract. Lot three in block thirty-three of Stratton's Addition fronts on Monroe street, between Sharpe avenue and Boone avenue, and is improved with a brick apartment building containing twelve four-room apartments. Lots one and two in block sixteen of Bingaman's Addition lie west, and in the rear, of the apartment building and front on Sharpe avenue, between Monroe street and Madison street. The southerly thirty-three and a half feet of these latter two lots (being the only portion thereof with which we are here concerned) front south on a sixteen-foot alley which runs east and west through block sixteen of Bingaman's Addition from Madison street to the east line of that addition. Upon this southerly portion of these two lots are a number of garages which serve the apartment building on lot three in block thirty-three of Stratton's Addition.

Between block thirty-three of Stratton's Addition and block sixteen of Bingaman's Addition is a narrow, triangular-shaped parcel of unplatted ground which has a width of about nine feet at the margin of Sharpe avenue, on the north, diminishes progressively to a width of four or four and a half feet at the center of the alley above mentioned, and disappears entirely in the southerly portions of the two blocks. Apparently this strip of ground was left unplatted as the result of an error in the survey of one or both of the additions, for otherwise these additions would have been contiguous throughout from Sharpe avenue to Boone avenue. The dividing line between lots three and four in block thirty-three would, if extended west, biscet the sixteen-foot alley across block sixteen. Lot four of block thirty-three is owned by one O. F. Smith.

It is undisputed that for thirty or forty years last past that portion of the strip of unplatted ground lying between the east end of the alley and the west line of block thirty-three, and which has a width, in that area, of only about four feet, has been used simply as a means of passage between the end of the alley and the property to the east of it and has in fact been regarded as a part of the alley itself extended to the property line of block thirty-three. Appellant concedes that it holds only an undivided one-half interest in the fee of this sixteen-foot segment of the unplatted strip, the other half interest belonging to the above mentioned O. F. Smith. Appellant therefore admits that it is unable to convey a fee title to that portion of the property described in its contract.

Prior to its transaction with the above-mentioned Mae Sims, appellant had, on June 22, 1936, entered into a similar written contract for the sale of the property, as above described, to one G. W. Reimers for the sum of nine thousand dollars, payable fifteen hundred dollars in cash, and the balance in semi-annual installments of two hundred fifty dollars each. That contract contained a provision which reads:

'Upon full compliance by second party [Reimers] with all of the terms and conditions hereof, first party [Central Life Assurance Society] will convey said real estate to second party by good and sufficient special warranty deed, and with such deed, will deliver an abstract of title or policy of title insurance, showing title good in fact and insurable, extended to the date of this contract.' (Italics ours.)

Reimers entered into possession of the property and operated the apartments until some time in December, 1936. In the meantime he had decided to resell the property and had listed it with a number of real estate agents. Respondent inspected the premises but thought that the price which Reimers was asking was excessive. She therefore sent her friend, Mae Sims, to pose as a prospective purchaser, and, after inspecting the property several times, Mrs. Sims agreed to purchase Reimers' interest therein for $3,260. Reimers signed a contract to that effect, but it is not clear whether or not Mrs. Sims also signed it.

For the purpose of completing that transaction, and at the suggestion of Mrs. Sims, the parties then repaired to the office of Murphey, Favre & Co., which represented appellant in connection with the latter's contract with Reimers. Murphey, Favre & Co. had had no previous connection with the transaction between Reimers and Mrs. Sims, but at Reimers' request they agreed to release him from his contract upon completion of the sale to Mrs. Sims and thereupon requested their attorneys, Tustin & Chandler, to draw a contract of sale directly between appellant, as seller, and Mrs. Sims, as purchaser. The contract was drawn and was submitted to Mrs. Sims' attorney, who thereafter wrote to his client suggesting certain changes in the contract, some of which were accepted and some rejected by Murphey, Favre & Co. The latter's attorneys then redrafted the contract, which was signed by appellant and by Mrs. Sims on or about December 17, 1936.

The sale price, as stated in this contract, was seventy-five hundred dollars. Mrs. Sims paid five hundred dollars thereof at the time of the execution of the contract and agreed to pay the balance in monthly installments of eighty dollars each. She also agreed to pay all subsequent taxes Before delinquency. In consideration of these undertakings on her part, the appellant agreed that:

'Upon full compliance by second party [Mae Sims] with all of the terms and conditions thereof, first party [Central Life Assurance Society] will convey said real estate to second party by good and sufficient special warranty deed, and with such deed, will deliver to second party the abstract and title policy now held by it covering the above described real estate. Said abstract and title policy have been submitted to second party and the title established therein is accepted by second party.' (Italics ours.)

In addition to the amount Mrs. Sims thus agreed to pay appellant, she had theretofore obligated herself to pay Reimers $3,260 for his equity in the property, so that she was to pay a total of $10,760 for the full ownership thereof. This was $1,760 more than Reimers had agreed to pay for the property under his contract with appellant, the difference in price representing the value of furniture Reimers had installed in the apartments, his profit on the transaction and the real estate brokers'...