Chamberlin v. Ivens

• Decision Date: 01 November 1922
• Parties: GEORGE D. CHAMBERLIN, Respondent, v. G. E. IVENS, Appellant
• Court: Idaho Supreme Court

210 P. 580

36 Idaho 235

GEORGE D. CHAMBERLIN, Respondent, v. G. E. IVENS, Appellant

Supreme Court of Idaho

November 1, 1922

CONDITIONAL SALE CONTRACT-WHEN CONDITIONS ARE CONCURRENT AND RECIPROCAL-WHAT PURCHASER MUST ALLEGE AND PROVE IN ORDER TO TERMINATE CONTRACT AND RECOVER PURCHASE MONEY PAID-WAIVER OF FORFEITURE - MAY BE EXPRESS OR IMPLIED - SUBSEQUENT RIGHTS OF PARTIES-HOW DETERMINED.

1. Where a conditional sale contract of a Carey entryman requires him to procure a government patent within a year and the purchaser to make a deferred payment within the same time, these conditions are concurrent and reciprocal, and neither can forfeit the rights of the other for failure to perform while he is himself in default.

2. Under such a contract, the purchaser who has gone into possession, in order to recover the payments made for a default on the part of the vendor to secure patent within the stipulated time, must allege and prove that he is ready, able and willing to perform on his part, and offer to restore the vendor to the status quo, as nearly as may be.

3. Neither party to a conditional sale contract of real estate containing concurrent and reciprocal obligations can, after his default for failure to perform, put the other party in any less favorable position as to the time and manner of performing than such other party had under the terms of the original agreement.

APPEAL from the District Court of the Sixth Judicial District, for Butte County. Hon. Ralph W. Adair, Judge.

Action to recover money paid on a contract to purchase land. Judgment for plaintiff, and defendant appeals. Reversed and remanded.

Reversed and remanded, with instructions. Costs awarded to appellant.

E. J. Dockery, for Appellant.

A party to a contract, who has knowledge of facts which would justify him in rescinding it, but who thereafter seeks and obtains indulgence in respect to the time or obligations under the contract, or an extension of time for making stipulated payments, thereby waives his right to rescission, for this amounts not only to a recognition of the contract as subsisting and binding, but is in effect a modification of its terms by mutual agreement. (Block on Res. and Can., sec. 602, p. 1392; Delano v. Jacoby, 96 Cal. 275, 31 Am. St. 201, 31 P. 290; Bourke v. Kissack, 242 Ill. 233, 89 N.E. 990, 26 L. R. A., N. S., 226; T. Wilce Co. v. Kelly Shingle Co., 130 Mich. 319, 89 N.W. 951; Parsons v. Mickinley, 56 Minn. 464, 57 N.W. 1134; Crooks v. Nippolt, 44 Minn. 239, 46 N.W. 349; Hewitt v. Andrews, 69 Ore. 581, 140 P. 437; C. J. Huebel Co. v. Leaper, 188 F. 769.)

Purchaser must act promptly upon his right to rescind or he loses the right. (Faulkner v. Wassmer, 77 N.J. Eq. 537, 77 A. 341, 30 L. R. A. 872.)

Delay when coupled with affirmative acts on his part recognizing the validity of the contract or its binding effect is conclusive evidence of a waiver of his right to rescind, unless explained by him. (Scheftel v. Hays, 58 F. 457, 7 C. C. A. 308; Crooks v. Nippolt, supra; Hewitt v. Andrews, supra; Marshall v. Gilman, 47 Minn. 131, 49 N.W. 688; Hunt v. Blanton, 89 Ind. 38; Bennett v. Hickey, 112 Mich. 379, 70 N.W. 900; Wilson v. Sunnyside Orchard Co., 33 Idaho 501, 196 P. 302.)

It is a condition precedent, declared by all courts, that before a plaintiff may bring a law action to recover back payments made upon a contract of purchase he must in advance restore or offer to restore to the defendant the property involved. A clearly defined distinction is drawn between the obligations of plaintiff in a suit in equity brought to obtain a decree of rescission of a contract and an action at law by a plaintiff who on his own motion rescinds the contract and sues for return of money paid on the contract. (Gamblin v. Dickson, 18 Idaho 734, 112 P. 213; 24 Am. & Eng. Ency. of Law, 621; Hayton v. Clemans, 30 Idaho 25, 165 P. 994; Luddington v. Patton, 111 Wis. 208, 86 N.W. 571.)

Where a party abrogates a contract and sues for recovery of money paid under it, he must place the defendant in statu quo in advance of instituting his action. (Herman v. Haffenegger, 54 Cal. 161; Hammond v. Wallace, 85 Cal. 522, 20 Am. St. 239, 24 P. 837; Rhorer v. Bila, 83 Cal. 51, 23 P. 274; Buena Vista Fruit & Vineyard Co. v. Tuohy, 107 Cal. 243, 40 P. 386; Severs v. Brown, 34 Ore. 454, 56 P. 170.)

Whitcomb, Cowen & Clark, for Respondent.

"Where an action is tried to the court without a jury and the evidence is conflicting, but there is substantial evidence in support of the findings of the court, such findings will not be disturbed by the appellate court on appeal." (Hemphill v. Moy, 31 Idaho 66, 169 P. 288; Davenport v. Burke, 30 Idaho 599, 167 P. 481; Holland v. Avondale Irr. Dist., 30 Idaho 479, 166 P. 259; Hayton v. Clemans, 30 Idaho 25, 165 P. 994; Wolf v. Eagleson, 29 Idaho 177, 157 P. 1122; Jones v. Van-Ausdeln, 28 Idaho 743, 156 P. 615; Jensen v. Bumgarner, 28 Idaho 706, 156 P. 114; Darry v. Cox, 28 Idaho 519, 155 P. 660; Smith v. Faris-Kesl C. Co., 27 Idaho 407, 150 P. 25; Bower v. Moorman, 27 Idaho 162, 147 P. 496.)

"The rule is well settled that a party cannot avail himself of a defense for the first time in the appellate court, nor will a question not raised in the trial court be considered on appeal." (Grant v. St. James Mining Co., 33 Idaho 221, 191 P. 359; Smith v. Sterling, 1 Idaho 128; Taylor v. Hall, 8 Idaho 757, 71 P. 116; Miller v. Donovan, 11 Idaho 545, 83 P. 608; Marysville Merc. Co. v. Home Fire Ins. Co., 21 Idaho 377, 121 P. 1026.)

In order to take advantage of estoppel or waiver, it must be especially pleaded. (Leland v. Isenbeck, 1 Idaho 469; Wienke v. Smith, 179 Cal. 220, 176 P. 42; Burk v. City of Santa Cruz, 163 Cal. 807, 127 P. 154; Cooper v. Flesner, 24 Okla. 27, 103 P. 1016; Deming Inv. Co. v. Shawnee F. I. Co., 16 Okla. 1, 83 P. 918; 10 R. C. L. 844; Tyler v. Hall, 106 Mo. 313, 27 Am. St. 337, 17 S.W. 319.)

The rules of pleading require that a plaintiff show by his pleading in an action upon a contract that all conditions precedent or concurrent to a breach complained of have been complied with. (4 Ency. Pl. & Pr. 627, 932; 21 R. C. L. 462.)

But when the breach of an independent covenant or condition in a contract is complained of, the plaintiff need not plead performance on his part, nor an offer to perform his part of the contract. (4 Ency. Pl. & Pr. 933; 13 C. J. 567, 568, 629, 725; Dey v. Dox, 9 Wend. (N. Y.) 129, 24 Am. Dec. 137; Couch v. Ingersoll, 2 Pick. (Mass.) 292; Romel v. Alexander, 17 Ind.App. 257, 46 N.E. 595; Johnson v. Heaton, 28 Ind.App. 475, 61 N.E. 959.)

The covenant or agreement to return this money, as provided for in the contract, is an independent covenant, the breach of which may be enforced without reference to the performance of any other term or condition of the contract. (5 Page on Contracts, secs. 2941, 2976, 2971; 2 Elliott on Contracts, secs. 1576, 1583, 1584.)

LEE, J. Dunn, J., concurs, RICE, C. J., concur in the result. BUDGE, J., Concurring in Part and Dissenting in part, McCarthy, J., concurs.

OPINION

LEE, J.

This is an action to recover money paid by respondent to appellant upon the purchase price of lands in a Carey entry, and for an additional amount thereafter paid by him to the construction company upon the purchase price of the water right appurtenant thereto. The complaint sets out the conditional agreement haec verba, and respondent relies for recovery upon the following provision therein:

"That in the event the said vendor fails within one year to secure a patent to said land, then he shall refund back to vendee all money paid him, together with interest thereon at the rate of seven per cent per annum."

The complaint alleges that respondent took possession of the premises on May 9, 1919, the date of the purchase agreement, and was in possession until April 5, 1921, when he notified appellant that he elected to rescind the contract and would proceed no further therewith, and expected a return of the money he had paid.

Appellant interposed a general demurrer to the complaint, which was overruled, and he answered over, admitting the execution of the agreement, and also pleaded and relied upon the same, but denied all averments of the complaint that charged him with being in default in the performance of any of its conditions whereby he was liable for a return of the money received on the purchase price. By way of cross-complaint, which he contends should also be considered a part of his answer, he alleges that the word "patent" used in the foregoing quoted paragraph was inserted in the agreement by mistake of the attorney who drew the same, and that the words "final certificate" should have been used in lieu of the word "patent," and prayed for a reformation of the contract on the ground of mutual mistake.

In the trial of the cause below, in so far as the material averments of the complaint were controverted, it was limited almost entirely to the issue of whether appellant was entitled to have the contract reformed by having the words "final certificate" substituted for the word "patent" in the paragraph referred to. Upon this issue the trial court found against appellant's contention, and there being a conflict in the evidence, this court will not disturb the findings of the lower court on that issue.

The court also found that appellant had not secured a patent from the government within a year following the execution of the sale agreement, and that respondent had paid on the purchase price, and to the construction company on the water right and for certain improvements made by him on the premises, the amounts alleged in the complaint, and as a conclusion of law held that respondent was entitled to recover the money so paid, and entered a judgment...