Gibson v. Rouse

• Decision Date: 11 August 1914
• Docket Number: 11798.
• Citation: 142 P. 464,81 Wash. 102
• Parties: GIBSON v. ROUSE et ux.
• Court: Washington Supreme Court

142 P. 464

81 Wash. 102

GIBSON v. ROUSE et ux.

No. 11798.

Supreme Court of Washington

August 11, 1914

Department 1. Appeal from Superior Court, Spokane County; Henry L Kennan, Judge.

Action by Mary S. Gibson against James W. Rouse and wife. Judgment for plaintiff, and defendants appeal. Affirmed.

Zent, Powell & Redfield and Nuzum, Clark & Nuzum all of Spokane, for appellants.

Sampson & Heil, of Spokane, for respondent.

ELLIS J.

The plaintiff brought separate actions to rescind two real estate contracts and to recover the money which she had paid thereon. The actions were consolidated and tried together. The following facts were admitted: On May 1, 1910, the plaintiff entered into a contract with the defendants whereby she agreed to purchase from them certain property in Rouse addition to Spokane for $1,000. She paid $800 down, leaving a balance of $200 to be paid, $100 on or before May 6, 1911, and $100 on or before May 6, 1912. On July 1, 1910, she entered into a similar contract with the defendants for the purchase of property in Roosevelt addition to Spokane. The contract price was $2,000. She paid $1,900 down, leaving a balance of $100 to be paid on or before July 1, 1911. Both contracts provided that the deferred payments should bear interest at 8 per cent. per annum from date. Each contract declared the time of payment of its essence, and provided in substance that, if the purchaser should fail to make payments punctually as therein specified, the seller might, at his opinion, declare the contract null and void, and the purchase money already paid should be forfeited by the purchaser in lieu of rent. Both contracts were placed in escrow in the Old National Bank of Spokane. The plaintiff failed to meet the deferred payments, and on September 20, 1911, defendants, claiming the contracts void, withdrew them from escrow. All of the property in question was vacant and unimproved. For convenience, we shall designate the contracts respectively, the small and the large contract. After the execution of these contracts, and before they were withdrawn from escrow, the defendants placed three mortgages upon the properties covered by the contracts, two of them before any of the deferred payments became due, and one a short time after the maturity of the deferred payment on the large contract. At the beginning of the trial, the defendants offered to convey the properties to the plaintiff if she would pay the balances due and the assessments and expenditures for improvements which the defendants had made upon the properties. This offer was refused.

Touching other matters, the evidence was in sharp conflict. The plaintiff and her two daughters, who assisted her in business matters, testified that none of them were ever requested to make any additional payments upon any of these properties, and never at any time received any letter or notice of any kind so requesting. The plaintiff and one of these daughters testified that the defendants, in February, 1911, verbally agreed to allow her an indefinite extension of time, even discouraging any effort on her part to complete the payments. The other daughter testified that about two weeks later the defendant Rouse in effect repeated this promise to her, stating that he was endeavoring to make a sale or exchange of these properties for a residence for the plaintiff. All three testified in substance that on several occasions the plaintiff had expressed to the defendant a desire to sell these lots and buy a home, or to exchange these lots for a residence, and that the defendant Rouse promised to do everything in his power to consummate such a sale or trade; that the defendant at all times professed great friendship for the plaintiff, in whom he inspired absolute confidence; and that she relied upon him to attend to her business and make investments for her. In November, 1911, the plaintiff paid the taxes on the property covered by the large contract for the year 1910, and also certain assessments. She and her daughter testified that they first learned that the contracts had been removed from escrow when, in 1912, her daughter sought to pay the taxes for the year 1911, and was informed that the defendants had already paid them. The plaintiff testified positively that she never had any notice whatsoever, either verbal or written, of the defendants' intention to forfeit the contracts or to withdraw them from escrow. The plaintiff's attorney testified that about May, 1912, he went to the office of the defendants and tendered to them the amounts still due upon the properties, which tender the defendant Rouse refused to accept. He claimed that the plaintiff had given him the money with which to make this tender. His testimony in that regard was very much weakened by the entries upon his own books, which indicated that, at that time, the plaintiff had given him only $116, which was about the amount necessary to pay the balance due upon the large contract. The plaintiff testified that she was present at this interview, and that the appellant Rouse did not offer to convey the land if she would pay the balances due, but put his hands upon his desk, and said, 'Nothing Doing.' Her attorney testified positively that at another time he asked the defendants Rouse whether he would accept the money due on the contracts, and that Rouse said he would not. The defendants' evidence was to the effect that they had repeatedly called upon the plaintiff to complete the payments; that they had written her letters, asking for payment, and that on one occasion, in response to a letter from the plaintiff, George Rouse, a son of the defendants, went to her home, and tendered to her deeds for the lots, demanding payment at that time; that she then said she was not ready to receive the deeds, and showed a disinclination to carry out her contract. This, however, was some time in October, 1910, and before any payment had become due upon either contract. The defendant Rouse himself testified that he was always able to deliver the deeds for the property, and that in July, 1911, the defendant came to his office and told him that she had no money, and that she could not do anything with the lots; that he then told her that he had the deeds ready at any time she wanted to take them; and that two or three weeks later he withdrew the contracts from escrow. Touching the tender, he testified that plaintiff and her attorney came to his office and told him that they had the money to pay down, but that they did not show it. His own testimony, however, indicates that he declined to accept payment on the large contract unless payment was also made upon the small contract. He testified that he mailed notice of cancellation of the contracts to the plaintiff, and later met one of her daughters on the street and told her about it. The court entered a decree rescinding the contracts, and awarding the plaintiff $3,014.68 and her costs. The defendants appealed.

The appellants contend that the decree should be reversed for two reasons: First, that the contracts were rightfully forfeited by the appellant; second, that, even conceding that there was no legal forfeiture, still the respondent was not entitled to a rescission and a recovery of her payments because she was herself in default and the appellants were not.

1. Was there a legal declaration of forfeiture? The court made no formal findings of fact, but, in the oral announcement of his decision, he plainly stated his views on the evidence. He was clearly of the opinion that Mr. Rouse, in his conversation with the respondent and her daughters in February and at other times, touching the exhange of this property for other property, led the respondent to believe that it would not be necessary for her to pay the balances promptly, and that he would not insist upon the payments being made at the times mentioned in the contract.

A careful consideration of the appellants' abstract of record, fortified by frequent references...