Earl C. Drew v. F. H. Bowen

• Decision Date: 11 May 1929
• Citation: 146 A. 254,102 Vt. 124
• Parties: EARL C. DREW v. F. H. BOWEN ET AL
• Court: Vermont Supreme Court

146 A. 254

102 Vt. 124

EARL C. DREW v. F. H. BOWEN ET AL

Supreme Court of Vermont

May 11, 1929

February Term, 1929.

Vendor and Purchaser---Executory Contract---Implied Condition as to Title in Contract for Sale of Realty---Character of Undertakings of Parties to Such Contract---Conclusiveness of Agreed Statement of Facts---Notice by Vendee to Mutual Agent of Vendor and Vendee of Intention To Rescind---Legality of Contract To Convey Realty Not Then Owned by Vendor---Rule as to Time for Acquiring Title---Rescission---When Vendee Need Not Tender Performance---Right of Way as Encumbrance Making Vendor's Title Defective---Partial Failure of Vendor's Title as Ground for Rescission---Motive for Rescission.

1. Contract to sell farm and certain specified personal property thereon for agreed sum, part of which, to bind bargain, was deposited with third person, as agent of both parties, to be forfeited if purchaser failed to live up to his agreement respecting payment of balance or purchase price, and stipulating time when final writings were to be drawn, held executory.

2. In every executory contract for sale of land, there is an implied condition that vendor will transfer to vendee a title unencumbered with defect, unless contract is expressly to contrary.

3. Undertakings of parties to executory contract for sale of farm and certain personal property thereon, held concurrent and dependent, and neither could put other in default without performing or tendering performance, or showing that he was ready and willing to perform.

4. Where case is heard below on agreed statement of facts nothing can be added by way of inference, except what necessary inference requires.

5. Where purchaser, in contract to sell farm and certain personal property thereon for agreed sum, gave notice to third person, to whom part of purchase price was paid to bind bargain, who was acting as agent for both parties, that purchaser was not going on with purchase, such notice was equivalent to notice to vendor, and was enough to put purchaser in default under contract and preclude him from claiming earnest money, unless he then had right to rescind contract.

6. An agreement whereby one engages to convey in future property which, at time of making contract, he does not own is not illegal.

7. Ordinarily, one contracting to convey realty, title to which he does not have at time of making contract, has all time that contract gives in which to get title, and cannot be put in default by premature tender of purchase money, but where nature of defect of title is such that vendor cannot acquire it, purchaser may rescind and put end to contract, even before day for delivery of deed arrives, it being insufficient that vendor is "willing" to perform.

8. Vendee in contract for conveyance of realty is not required to tender performance, where nature of defect of title is such that vendor cannot acquire it, and need not wait for time set in contract for final writings to be drawn before rescinding contract, since law never requires a useless gesture.

9. Right of way 100 feet in width for electric power line across land agreed to be conveyed in contract, held, an encumbrance making vendor's title defective, giving vendee right of rescission before day set in contract for drafting of final writings, where agreed statement of facts failed to indicate that right of way could be acquired by vendor, either by negotiation or processes of law or equity.

10. A partial failure of vendor's title is enough to give rise to a right of rescission.

11. Motive actuating rescission is immaterial, if party actually has right to rescind.

BILL of interpleader to determine person to whom money held by plaintiff should be paid. One of defendants was defaulted. The other two were ordered to, and did interplead. Heard by court on an agreed statement of facts at the September Term, 1928, Franklin County, Graham, Chancellor. Money decreed to defendant George E. Draper. Defendant F. H. Bowen appealed. The opinion states the case. Reversed, and cause remanded with directions that decree be entered awarding fund in controversy to Fred H Bowen.

A B. Rowley for defendant Fred H. Bowen.

P L. Shangraw for defendant G. S. Draper.

Present: WATSON, C. J., POWERS, SLACK, MOULTON, and WILLCOX, JJ.

OPINION

POWERS

The plaintiff, as stakeholder, had in his hands $ 500, which was claimed by both Bowen and Draper, defendants. He brought a bill of interpleader against them and H. A. Gilman. The latter was defaulted, and Bowen and Draper were ordered to interplead and did so. The fund was paid into court, where it awaits the decision as to its ownership. The court below, acting on an agreed statement of facts, awarded the money to Draper. Bowen appealed.

It appears that Draper, on the 25th day of May, 1926, being then in possession of a certain farm and the personal property thereon, in Richford, entered into a written contract with Bowen, whereby he agreed to sell the farm and property to the latter for $ 5,000. To bind the bargain, Bowen paid to the plaintiff, the agent of both parties, the sum of $ 500, which by the contract was to be forfeited if Bowen failed to live up to his part of the agreement. It was stipulated in the writing how the balance of the purchase price was to be paid, and that the final writings were to be drawn on or about June 1 then next. About a week after the written contract was executed, and, so far as shown, before such final writings were drawn or demanded, Bowen informed Drew that he was not going on with the purchase, and demanded the $ 500, which demand was refused.

The contract evidenced by the writing of May 25 was executory ( Vermont Marble Co. v. Mead, 85 Vt. 20, 80 A. 852; Waite v. Stanley, 88 Vt. 407, 92 A. 633, L.R.A. 1916C, 886), and, in every executory contract for the sale of land, there is an implied condition that the vendor will transfer to the vendee a title unencumbered with defect, unless the contract is expressly to the contrary. Crim v. Umbsen, 155 Cal. 697, 103 P. 178, 132 Am. St. Rep. 127; Justice v. Button, 89 Neb. 367, 131 N.W. 736, 38 L.R.A. (N.S.) 1. So Bowen was entitled to a good title--not because the contract says so, but because the law says so. Refeld v. Woodfolk, 22 HOW 318, 16 L.Ed. 370, 375.

The respective undertakings of the parties were concurrent and dependent, and neither could put the other in default without performing or tendering performance, or showing that he was ready and willing to perform. Hambleton v. U Aja Granite Co., 96 Vt. 199, 202, 118 A. 878. As we have seen, the case was heard below on an agreed statement of facts. To these nothing can be added by way of inference, except what necessary inference requires. City of Barre v. Town of Bethel, ...