Foelkner v. Perkins

• Decision Date: 28 December 1938
• Docket Number: 26955.
• Citation: 197 Wash. 462,85 P.2d 1095
• Parties: FOELKNER et ux. v. PERKINS.
• Court: Washington Supreme Court

85 P.2d 1095

197 Wash. 462

FOELKNER et ux. v. PERKINS.

No. 26955.

Supreme Court of Washington

December 28, 1938

Department 1.

Action by William Foelkner and his wife against Emma Perkins, a single woman, to cancel a contract of sale of realty and to divest defendant of any interest therein. From a judgment dismissing the action with prejudice, plaintiffs appeal.

Judgment affirmed.

Appeal from Superior Court, Grays Harbor County; J. M. Phillips judge.

Jozef Zelasko, of Aberdeen, for appellants.

Evans McLaren & Littell, of Seattle, amicus curiae.

Karl R Bendetson, of Aberdeen, for respondent.

HOLCOMB Justice.

This cause was initiated October 30, 1936, by appellants, the vendors, to cancel a contract of sale pertaining to certain real property, and to divest respondent of any interest therein. Judgment was entered dismissing the action with prejudice, and this appeal followed.

The essential undisputed facts are these: August 23, 1923, appellants and respondent entered into a contract of sale whereby appellants sold to respondent the following described real estate, to-wit: 'Lot Seven (7), Block one (1), Westherwax and Benns Addition to Aberdeen, Grays Harbor County, Washington,' otherwise known as the 'Grand Central Hotel' property, for the sum of $13,000, of which $1500 was paid coincident with the execution of the contract and the balance was to be paid in installments of $150 per month, together with interest thereon at the rate of seven per cent per annum, payable on the first day of every month until the remaining principal and interest had been paid in full. On the same day on which the above-mentioned contract was executed, a bill of sale was made by which appellants sold to respondent certain furniture situated in the hotel for the sum of $2000, which was paid for in full by respondent at the time of the execution of the bill of sale.

The real estate contract also provided that respondent should keep the properties described in the contract insured; that thereafter she should seasonably pay all of the taxes and assessments imposed on the premises; time was declared to be of the essence; appellants reserved the right to declare the agreement null and void in the event respondent did not make payments according to the terms of the contract; and upon the exercise of that right all of the rights and interest of respondent in the premises would cease and determine.

Until September, 1927, respondent performed according to the terms of the contract, and timely made the required monthly payments with interest. Thereafter the payments on the principal decreased in amount and were intermittent until 1934, but respondent continued to make interest payments until August, 1934. At the time this action was instituted the balance due on the contract was something in excess of $6000. Some of the taxes against the property were also in arrears at that time.

Appellants, feeling that by close cooperation with respondent and by proper application of the revenues derived from the hotel they could avoid the loss of the property, called upon respondent in July, 1934. Accordingly, at that time appellants and respondent made an oral agreement, to be effective for a period of two year until July, 1936, by which they modified the above-mentioned written contract so as to permit appellants to collect the monthly rentals from the first floor of the hotel and to apply to same to the payment of interest and taxes. Appellants collected rentals in the sum of ninety dollars per month, beginning July 1934, for thirty-one months, totaling $2700, and made disbursements from the amount thus collected in payment of taxes, dated back to 1932, on the property in the sum of $886.08, on insurance in the sum of $204.50, a certain amount on miscellaneous improvements, and the residue of the rental payments was applied on the principal and interest and on improvements upon the hotel property.

Respondent renovated the first floor and arranged quarters for a store and a restaurant, and made rather extensive improvements in the hotel in order to obtain a greater income from the building. Respondent testified that she had paid out in taxes and principal and interest, a total of over $19,000.

The testimony is conflicting in regard to the arrangement made after the expiration of the oral modification agreement in July, 1936. Respondent testified that in July, 1936, a second oral agreement was made whereby Foelkner agreed to continue the oral modification agreement of July, 1934, until a sale could be made at the earliest opportunity satisfactory to both parties, and a division of the proceeds of such sale made between the parties as their respective interests might appear. She also testified that in July, 1936, Foelkner said 'you can't afford to lose this and neither can I.' Foelkner denied making any agreement in July, 1936, for a further extension of time, and asserted that the arrangement made in July, 1934, had expired.

September 4, 1936, appellants served upon respondent a written notice notifying her to pay the balance due or to surrender the premises.

Appellants insisted that respondent was not making payments according to the terms of the contract, and therefore prayed for judgment divesting respondent of any and all rights in the premises and that appellants be vested with fee simple title.

During the time covered by the first oral agreement, and even after its expiration, respondent continued to devote all of her efforts to the management and improvement of the hotel. Respondent testified that in April, 1936, she expended $150 for cleaning, papering, and painting the hotel...