Gillmore v. Green

• Decision Date: 04 October 1951
• Docket Number: No. 31645,31645
• Citation: 235 P.2d 998,39 Wn.2d 431
• Court: Washington Supreme Court
• Parties: GILLMORE, v. GREEN.

Page 431

39 Wn.2d 431

235 P.2d 998

GILLMORE, v. GREEN.

No. 31645.

Supreme Court of Washington, Department 2.

Oct. 4, 1951.

Bayley, Fite, Westberg & Goodin, Seattle, for appellant.

Rummens, Griffin & Short and Paul R. Cressman, Seattle, for respondent.

WEAVER, Justice.

This is an action by a contract purchaser of real property for rescission of the contract, for a return of payments made thereon, and for the cost of improvements benefiting the property. Two grounds of rescission are urged: (1) The vendor failed to furnish title report and title policy, as agreed; and (2) the vendor did not have fee title to the property sold.

August 26, 1946, Mrs. Green (defendant and appellant) and her husband, now deceased, sold land upon real estate contract, in which time was of the essence, to Mrs. G. M. Nadreau, a Seattle real estate broker. Although her cause of action has been assigned to R. M. Gillmore, Mrs. Nadreau will be referred to as if she were the plaintiff and respondent.

The only written instrument executed by the Greens and Mrs. Nadreau was an earnest-money receipt. It was on a Seattle real estate board printed form. The contract provided for a $1,000 down payment, and further payments of $4,000 on or before January 15, 1947, $5,000 on or before March 20, 1947, and the balance of $55,000 on or before May 25, 1948. The contract contained a typewritten provision relating to the release of 'acreage' upon payment of a certain sum per acre by the vendee. No demand was ever made for such a release.

The contract further provided that the Greens (vendors) would furnish a title policy or title report to Mrs. Nadreau (vendee) as soon as procurable or within ninety days from August 26, 1946. Thus the title report or policy should have been furnished on or before November 24, 1946. If the title was not insurable, and could not be made insurable within ninety days from date of the title report, the plaintiff (vendee) might rescind the contract, but 'may waive defects and elect to purchase.' It was further covenanted that: 'There are no verbal or other agreements which modify or affect this contract.' The complaint does not allege fraud.

On February 3, 1947, plaintiff (vendee) hired Mr. Harris, an engineer, who spent considerable time surveying and platting the property. He completed a plat for dedication of the property about July, 1947. For this, he was paid $2,804 by plaintiff.

Through correspondence with Mr. Green, plaintiff (vendee) was granted several extensions of time in which to pay two of the three remaining installments. The January payment was made February 15, 1947; the March payment was made partly on April 19, 1947, and partly on May 20, 1947. These payments were made after the title policy or title report should have been furnished.

May 10, 1947, Mr. Green died, a resident of California. Mrs. Green was appointed executrix of his will.

Plaintiff's complaint alleged the form and existence of the contract of August 26, 1946; that defendants had knowledge that plaintiff was purchasing the property for the purpose of platting it with the necessity of making a public dedication of roads, and that a plat had to be filed with the auditor of King county; that the Greens promised to furnish title report or insurance, and that further payments were made by plaintiff 'in reliance upon said promise'; that no title information was ever furnished; that, in further reliance upon the promise to furnish title report or insurance, the plaintiff expended $3500 in platting the land and thereby improving it, but has now discovered that defendants were not the owners of the property but that it is owned by King county; that plaintiff has elected to rescind the contract and has duly filed a claim with defendant as executrix of Mr. Green's estate; and that the claim has been rejected. The prayer asked for cancellation of the contract, judgment for the $10,000 paid, and judgment for $3,500 for improvements made to the property. By appropriate answer and affirmative defenses, defendant admitted receipt of the $10,000 and prayed for a dismissal of the action.

The trial court entered its decree September 5, 1950. It provided that the property was not at any time owned by defendant, but was being purchased from King county upon contract; that plaintiff had no knowledge of this prior to making her payments; that decedent knew the property was to be platted and that a public dedication thereof required the signature of the record owner; that, which no policy of title insurance was ever delivered, that duty was waived by subsequent payments on contract. The decree specifically stated:

'Finding that plaintiff has not sustained the burden of proof on right of rescission because of failure to deliver the title policy or otherwise, and breached said contract in failure to make the final payment; and * * *.

'Concluding that in equity and good conscience under all the evidence, the record, the earnest money receipt and the written exhibits on file, and the fact that defendant has not in this action, or otherwise, sued for specific performance or actual damages, if any, and has not elected to declare a forfeiture,

'It Is Ordered, Adjudged and Decreed that plaintiff be and hereby is granted a judgment against defendant, * * * in the sum of $10,000.00, * * *; Provided, if defendant files in this cause, prior to the entry of judgment an election to forfeit said contract and retain the $1000.00 earnest money, the plaintiff be, and hereby is granted judgment against defendant, * * * in the sum of $9000.00, * * *' (Italics ours.)

From this decree the defendant, individually and as executrix, has appealed.

Mrs. Nadreau testified, and it is uncontradicted, that she was never supplied with a title report or policy for the property, and, in fact, had never seen one.

There is no contention by plaintiff, nor could there be, that she was not aware that the vendors had failed to furnish the title report on or before November 24, 1946. Although there was considerable correspondence between Mrs. Nadreau and Mr. Green prior to his death on May 10, 1947, concerning the extension of time of contract payments, not once was the title policy or report mentioned.

Had plaintiff rescinded the contract promptly upon the expiration of the ninety-day period in which the title report or policy was to be furnished, a different situation would have existed. At the end of this period she had only paid $1,000 down. She had not yet committed herself on the Harris contract. However, she elected to do otherwise, and made payments on the balance after the due date of the title report, with full knowledge of all material facts.

The acquiescence of plaintiff in nonperformance of defendants' duty to deliver title report constituted a waiver of the right to rescind the contract for its nondelivery. Alhadeff v. Van Slyke, 176 Wash. 244, 28 P.2d 797; Nagel v. Edmonston, 178 Wash. 577, 35 P.2d 64. In Central Life Assurance Society v. Impelmans, 13 Wash.2d 632, 647, 126 P.2d 757, 764, we approved the rule, applicable in situations such as this, that: "Any act on the part of the purchaser treating the contract as in force, when done voluntarily and with a knowledge of facts creating a right to rescind, amounts to a waiver of the...