Clinton v. Meyer

• Decision Date: 23 March 1927
• Citation: 255 P. 316,43 Idaho 796
• Parties: THOMAS CLINTON and MINNIE M. CLINTON, His Wife, Respondents, v. I. W. MEYER and MINNIE MEYER, His Wife, Appellants
• Court: Idaho Supreme Court

255 P. 316

43 Idaho 796

THOMAS CLINTON and MINNIE M. CLINTON, His Wife, Respondents, v. I. W. MEYER and MINNIE MEYER, His Wife, Appellants

Supreme Court of Idaho

March 23, 1927

QUIETING TITLE-RIGHT OF ACTION-CLOUD ON TITLE-CONTRACT AUTHORIZING FORFEITURE-ACTION BY VENDOR-EQUITY-JURISDICTION-FORFEITURES.

1. Vendor of real estate, under contract authorizing forfeiture for failure to make payments in time and in manner specified may, after giving notice of declaration of forfeiture maintain action to quiet title without foreclosing contract as a lien, notwithstanding C. S., sec. 6349, rendering contracts for forfeiture of property subject to lien void.

2. Equity will never by affirmative action enforce a forfeiture but will leave the party to a remedy at law.

3. A court of equity will not, in general, allow an otherwise clear title to be clouded by a claim unenforceable at law or in equity.

4. Though equity does not enforce a forfeiture, it nevertheless fails to relieve against a forfeiture, when no equitable ground for such relief exists.

APPEAL from the District Court of the Eleventh Judicial District for Twin Falls County. Hon. William A. Babcock, Judge.

Action to quiet title. Judgment for plaintiff. Affirmed.

Judgment affirmed, with costs to respondent.

Turner K. Hackman, for Appellants.

Under equitable principles provided for in C. S., sec. 6591, Meyer and wife were the real owners of the land involved in this action and Clinton and wife only had a vendors' lien upon said land, which in equity was in substance a mortgage and could only be enforced under foreclosure proceedings. (1 Pomeroy's Eq. Jur., 3d ed., secs. 105, 368, 369, 372; 3 Pomeroy's Eq. Jur., secs. 1260, 1261; Speicher v. Lacy, 28 Okla. 541, 115 P. 271, 35 L. R. A., N. S., 1066; C. S., secs. 6408, 6409, 6410; Dingley v. Bank of Ventura, 57 Cal. 467, 470, 471; Gessner v. Palmateer, 89 Cal. 89, 24 P. 608, 26 P. 789, 13 L. R. A. 187-189; Nixon v. Marr, 190 F. 913, 111 C. C. A. 503, 36 L. R. A., N. S., 1067; Ferguson v. Blood, 152 F. 98, 82 C. C. A. 482; Wheeling Bridge & Terminal Ry. Co. v. Raymann Brewery Co., 90 F. 189, 32 C. C. A. 571; Wells v. Francis, 7 Colo. 396, 4 P. 49; Hurt v. Jones, 75 Va. 341.)

The principles of the common law as distinguished from equitable principles are not applicable to the instant case, for the reason that principles of the common law and the rules governing an executory contract for the sale of land are entirely at variance with equitable principles upon the same subject. (1 Pomeroy's Eq. Jur., 3d ed., sec. 367.)

Under the universal rule of equity principles and C. S., sec. 6349, a court of equity will never enforce a penalty or forfeiture, and the provision for forfeiture of the contract involved in this action is void. (Keller v. Lewis, 53 Cal. 113, 118; 3 Story's Eq. Jur., 14th ed., sec. 1732; McCormick v. Rossi, 70 Cal. 474, 15 P. 35; Cheney v. Bilby, 74 F. 52, 20 C. C. A. 291; Donoghue v. Tonopah Oriental Min. Co., 45 Nev. 110, 15 A. L. R. 937, 198 P. 553; Solomon v. Franklin, 7 Idaho 316, 62 P. 1030.)

The case involved the rescission or cancellation of a contract and that plaintiff in order to rescind must offer to refund the amount received less reasonable rent. (2 Black on Rescission and Cancellation, secs. 688, 694; Shiveley v. Semi-Tropic Land & Water Co., 99 Cal. 259, 33 P. 848; Drew v. Pedlar, 87 Cal. 443, 22 Am. St. 257, 25 P. 749; Phelps v. Brown, 95 Cal. 572, 30 P. 774; Lytle v. Scottish American Mtg. Co., 122 Ga. 458, 50 S.E. 402; Frink v. Thomas, 20 Ore. 265, 25 P. 717, 12 L. R. A. 239; Howard v. Stillwagon, 232 Pa. 625, 81 A. 807; Quigley v. King, 182 Mo.App. 196, 168 S.W. 285; Waters v. Pearson, 163 Iowa 391, 144 N.W. 1026; Pierce v. Staub, 78 Conn. 459, 112 Am. St. 163, 62 A. 760, 3 L. R. A., N. S., 785; Reidt v. Smith, 75 Wash. 365, 134 P. 1057; Davis v. Wilson, 55 Ore. 403, 106 P. 795; Nason v. Patten, 88 Kan. 472, 129 P. 138; Smith v. Moore (Tex. Civ. App.), 155 S.W. 1017; Rose v. Garn, 56 Utah 533, 191 P. 645; Cooley v. Call, 61 Utah 203, 211 P. 977.)

J. W. Taylor, for Respondents.

Without an equitable conversion there can be no vendor's lien under an executory contract for the sale of land; and where in such contract time is made of the essence, equitable conversion does not take place. (1 Pomeroy's Eq. Jur., sec. 365, note 1; Douglas Co. v. Union Pacific R. R., 5 Kan. 615.)

In an executory contract for the sale of land, providing that the vendee on failure to perform shall forfeit payments already made, if time is made of the essence of the contract, a forfeiture will be sustained, both at law and in equity. (1 Pomeroy's Eq. Jur., sec. 445; 1 Black on Rescission and Cancellation, sec. 216; Pomeroy on Spec. Perform., secs. 361, 362; Williams v. Skelton, 40 Idaho 741, 237 P. 412; Holverson v. Evans, 38 Idaho 428, 224 P. 1067; Walsh v. Coghlan, 33 Idaho 115, 190 P. 252; Bowers v. Bennett, 30 Idaho 188, 164 P. 93; Oconto Co. v. Bacon, 181 Wis. 538, 40 A. L. R. 175, 195 N.W. 412; Papesh v. Wagnon, 29 Idaho 93, 157 P. 775; Rischar v. Shields, 26 Idaho 616, 145 P. 294; Hall v. Yaryan, 25 Idaho 470, 138 P. 339; Prairie Dev. Co. v. Leiberg, 15 Idaho 379, 98 P. 616; Castleberry v. Hay, 8 Idaho 670, 70 P. 1055; Hawkins v. Thurman, 1 Idaho 598; Glock v. Howard & Wilson Colony Co., 123 Cal. 1, 69 Am. St. 17, 55 P. 713, 43 L. R. A. 199; Cue v. Johnson, 73 Kan. 558, 85 P. 598; Reese v. Westfield, 56 Wash. 415, 105 P. 837, 28 L. R. A., N. S., 956; Harper v. Independence Dev. Co., 13 Ariz. 176, 108 P. 701; Baston v. Clifford, 68 Ill. 67, 18 Am. Rep. 547; Grey v. Tubbs, 43 Cal. 359; Oconto Co. v. Bacon, supra.)

BRINCK, Commissioner. Varian, Johnson, Commissioners, Wm. E. Lee, C. J., Givens, Taylor and T. Bailey Lee, JJ., concurring. Budge, J., took no part in the opinion.

OPINION

BRINCK, Commissioner.

This action is brought to quiet title to land owned by plaintiffs, as against the claims of defendants under a contract whereby plaintiffs agreed to sell to them the land for an agreed sum, payable in part in deferred instalments, the first two of which instalments became due on January 21, 1922, and January 21, 1923, respectively; defendants further agreeing to pay certain taxes, water maintenance charges, and interest on an existing mortgage. The contract contained the following provision:

"It is understood and agreed that time shall be the essence of this agreement, and that in the event the said parties of the second part shall fail, neglect, or refuse to make the payments at the time, and in the manner as herein provided, or shall fail to keep the terms and conditions of this agreement, it shall be optional with the said parties of the first part to declare this contract forfeited, and upon making such declaration all rights of the parties of the second part to complete said purchase shall terminate, and be at an end, and the said parties of the first part may, at their option, retain any moneys paid as a part of the purchase price, as and for liquidated damages for such failure or breach."

Default having been made by the defendants in the payment of a portion of the first two instalments above mentioned, and in the payment of the taxes, water maintenance and interest, plaintiffs gave written notice of a declaration of forfeiture, and thereafter brought this action.

Defendants answered, denying many of the allegations of the complaint, and also filed a cross-complaint, praying for a rescission of the contract and return of the payments made by them upon the purchase price. Judgment was rendered for plaintiffs, and defendants appeal from the judgment.

No error is assigned as to the findings, or as to the sufficiency of the evidence to sustain the findings. The assignments of error raise the question of the sufficiency of the findings to sustain the judgment. The only question urged on appeal is as to the validity of the provisions for forfeiture, defendants contending that the plaintiffs must foreclose their contract as a lien and that a forfeiture provision cannot be enforced under our statutes; further contending that plaintiffs' attempted forfeiture amounts to a rescission, which defendants are entitled to accept and that they are thus entitled to demand back their payments theretofore made. Defendants do not contend that the forfeiture was not declared in accordance with the terms of the contract, or was insufficient in any respect, nor that they are entitled to any further time within which to comply with the contract on their part; nor is it questioned that the contract constitutes a cloud on plaintiffs' title.

The question as raised is merely as to the validity in general of a forfeiture provision in a contract of sale of land. The law is so well settled against defendants' contention in this respect that it need hardly be discussed; but they urge that the decisions of this court upon the subject have been rendered without reference to the provisions of C. S., sec. 6349, which they contend render such a provision for forfeiture void. The statute referred to is as follows:

"All contracts for the forfeiture of property subject to a lien, in satisfaction of the obligation secured thereby, and all contracts in restraint of the right of redemption from a lien, are void."

Appellants' contention rests upon the theory that the interest of a vendor in a contract for the sale of land, he reserving title until payment of the purchase price has been made constitutes a lien upon the land. Their brief on this point consists entirely of excerpts from Pomeroy's Equity Jurisprudence and other texts, and some decisions, holding variously that such vendor has or has not a lien,...