Dill v. Zielke

• Citation: 26 Wn.2d 246,173 P.2d 977
• Decision Date: 24 October 1946
• Docket Number: 29802.
• Parties: DILL v. ZIELKE et al.
• Court: United States State Supreme Court of Washington

173 P.2d 977

26 Wn.2d 246

DILL v. ZIELKE et al.

No. 29802.

Supreme Court of Washington, En Banc.

October 24, 1946

Suit by Nina E. Dill against Mary Zielke and the First National Bank of Spokane to recover possession of real property previously sold by plaintiff under a forfeitable conditional sales contract, wherein individual defendant filed a cross-complaint. From a decree for individual defendant plaintiff appeals.

Affirmed.

MALLERY J., dissenting.

Appeal from Superior Court, Spokane County; Louis A. Bunge, judge.

G. E Lovell, of Spokane, for appellant.

Cornelius E. Collier, Ralph P. Edgerton, and H. E. T. Herman, all of Spokane, for respondent.

STEINERT Justice.

Plaintiff Nina E. Dill, brought suit to recover possession of certain real property which had formerly been sold by her under a forfeitable conditional sales contract. Mary Zielke, who was a subsequent contract purchaser of the same property from plaintiff's vendee, was made the principal defendant in the case. Defendant Zielke appeared in the action by answer and cross-complaint which put in issue the material allegations of plaintiff's pleading with reference to forfeiture and further sought, by the cross-action, to have the defendant declared to be the owner, and entitled to the possession, of the real property in question. Upon joinder of issues, the cause was tried to the court without a jury. At the conclusion of the trial, the court took the cause under advisement and later rendered a memorandum opinion concluding with a decision in favor of the litigant defendant. Findings, conclusions, and a decree were entered accordingly, and plaintiff appealed.

On August 22, 1941, appellant, Nina E. Dill, entered into a written contract with Roy M. Mulberry and Marian Mulberry, husband and wife, wherein Mrs. Dill agreed to sell and the Mulberrys agreed to purchase a certain lot, with the appurtenances, situated in the city of Spokane.

The contract recited that the purchase price of the property was sixteen hundred dollars, of which the sum of five hundred dollars was acknowledged as having been paid at the time, and that the balance of fifteen hundred dollars was to be paid in monthly installments of not less than eighteen dollars, inclusive of interest at the rate of six per cent per annum, the first installment to be paid on October 22, 1941, and the purchasers to have the right at any time to pay as much of the balance of the purchase price as they might desire, without payment of unearned interest or penalty.

The agreement also contained time and forfeiture provisions reading as follows:

'Time is of the essence of this contract. In case the purchasers shall fail to make any payment at the time same shall fall due as hereinBefore specified, or to perform any covenant or agreement Before said date, seller at her option may declare such a forfeiture and cancellation by written notice to the purchasers and at the expiration of thirty (30) days this agreement shall be at an end and null and void, if in the meantime the terms of this agreement have not been complied with by the purchasers.'

Pursuant to the terms of the contract, a copy of that instrument and a warranty deed from the seller to the purchasers were placed in escrow, under a written agreement authorizing the First National Bank of Spokane, as escrow agent, to receive the monthly installments, issue receipts therefor, and, upon final payment, to deliver the escrow papers to the purchasers. The escrow agreement further provided that if the purchasers failed to promptly make any of the payments when due, as required by the contract of sale, the escrow holder should return the deed and contract to the appellant seller after thirty days' notice in writing by registered mail to the last known address of the purchasers. A policy of title insurance was also, at or about the same time, deposited with the escrow agent.

The purchasers, Mr. and Mrs. Mulberry, went into possession of the real property and made payments to the bank on their contract from the date of its execution until August 3, 1944, in amounts totaling $712, of which the sum of $232,86 represented accrued interest. On the date last mentioned, they made the payment which had come due on July 22nd, at which time a balance of $1,120.86 was still owing, but not yet due, on the contract. In making their monthly payments the purchasers were usually late, the overtime ranging from periods of two days to three weeks.

The installment of $18, inclusive of $5.61 interest, coming due on August 22, 1944, was, for reasons which will subsequently appear, never paid by the purchasers. Up to that time the respondent Mary Zielke was in no way involved in the conditional sales contract or concerned with the property therein described.

Sometime in August, 1944, the Mulberrys concluded to sell the property and, for that purpose, listed it with one C. A. Hines, a realtor in Spokane. Mr. Hines succeeded in interesting respondent Mary Zielke, a widow, in the purchase of the property, and on September 1, 1944, Mrs. Zielke and the above mentioned Roy Mulberry entered into a written agreement wherein Mrs. Zielke obligated herself to purchase, and Mr. Mulberry obligated himself to sell, the real property here involved at a price of $2500, of which the sum of $500 was then and there paid in cash, and the balance of $2,000 was to be paid on the consummation of the transaction. That agreement made no mention of the Dill contract or of Mrs. Dill's interest in the property, although it obligated Roy Mulberry, as the immediate seller, to furnish an acceptable policy of title insurance and to execute a good and sufficient deed to Mrs. Zielke, as purchaser.

On or about the same day that this agreement was executed, Mr. Hines notified the bank, as escrow holder, that the property was being sold and at the same time procured from the bank the title insurance policy then in its possession, for the purpose of having it brought down to date. A few days thereafter, Mrs. Zielke paid to Hines a sum sufficient to satisfy the balance owing and to be owed, to Mrs. Dill, amounting approximately to $1,142, inclusive of accruing interest, and on September 17, 1944, Mrs. Zielke, with her daughter, went into possession of the property.

Due to the delay encountered in having the policy of title insurance brought down to date and to the further fact that Mrs. Zielke was procuring, through another real estate transaction then in process of completion, the funds with which to pay to the Mulberrys the balance of the amount coming to them, Mr. Hines retained the funds already in his possession until both transactions could be concluded.

In the meantime, Mrs. Dill, the appellant herein, learned of the negotiations between the Mulberrys and Mrs. Zielke, and apparently did not approve of them. On several occasions during the period between September 17 and October 15, 1944, she visited the premises then being occupied by Mrs. Zielke and her daughter and stated to them that they were 'trespassers.' Learning also that the policy of title insurance had been temporarily relinquished by the bank to Mr. Hines for the purpose of having it brought down to date, Mrs. Dill voiced her positive objection to that procedure.

During this time, the situation with respect to the transaction between the Mulberrys and Mrs. Zielke had progressed to the point where it was about to be fully consummated. On October 16, 1944, Mr. Hines wrote a letter to Mrs. Dill, advising her that the property had been sold to Mrs. Zielke, and that in a few days he would have the money to pay her, Mrs. Dill, the full amount owing on her contract of sale. The evidence reveals that at that time Mr. Hines actually had in his possession sufficient moneys to pay the full amount of that balance, but was waiting for the additional amount necessary to satisfy the balance owing to the Mulberrys on their contract with Mrs. Zielke. That amount was virtually assured, however, through the kindred transaction then pending between Mrs. Zielke and other persons.

The letter from Mr. Hines to Mrs. Dill precipitated the subsequent action taken by Mrs. Dill, leading to this litigation. On October 17, 1944, the day on which Mrs. Dill received Mr. Hines' communication, she wrote and sent, by registered mail, to Mr. Mulberry, a letter advising him that she was canceling his contract of purchase because of his failure to make the monthly payments according to the terms of the contract, and notifying him that she was then giving him 'the required thirty day notice' at the expiration of which she would demand possession of the premises. A copy of this notice was also mailed to the bank, but none was sent to Mrs. Zielke and, so far as the record herein discloses, Mrs. Zielke never knew of the intended forfeiture until about the time this action was commenced. As stated by the trial court in its memorandum opinion, 'Unquestionably, this letter of Mr. Hines is what inspired the notice of forfeiture.'

At the time the notice of forfeiture was given, the Mulberrys were in arrears on their August 22nd and September 22nd installments, amounting in all to thirty-six dollars. The time fixed in the notice of forfeiture expired on November 17, 1944.

The delinquent installments were not paid within the specified time, as concededly they should have been. However, on November 20th which was but three days after the expiration date, Mr. Hines paid to the bank, the escrow holder, the sum of $1,142.91, which was the full amount owing to Mrs. Dill on her conditional sales contract with the Mulberrys. Mr. Hines also at that time demanded from the bank the surrender of the escrow papers, including the warranty deed from Mrs. Dill to the...