Gooden v. Hunter
| Decision Date | 08 October 1959 |
| Docket Number | No. 34795,34795 |
| Citation | 344 P.2d 723 |
| Court | Washington Supreme Court |
| Parties | Virgil M. GOODEN and June M. Gooden, his wife, Appellants, v. Howard HUNTER and Lucille Hunter, his wife, Respondents. |
John R. Stair, Seattle, for appellants.
Thomas G. Holcomb, Seattle, for respondents.
This is an action for rescission. On April 1, 1954, defendants owned a commercial fishing vessel and, on that date, entered into a written agreement for its sale to plaintiffs. Whether this was an absolute or conditional sale is one of the disputed questions in the present case.
As pointed out in plaintiff's brief, the 'parties made a rather curious memorandum of their agreement.' They used a standard form, real estate 'Earnest Money Receipt and Agreement.' In the space above the usual small print employed to bind an offer for the sale of real estate, they typed out the terms and conditions of the sale of the boat. It is to be noted that the agreement did not contain a forfeiture provision whereby, upon breach by the vendee, the vendor could elect to repossess the boat and retain as liquidated damages any of the purchase money that had been paid prior to the breach.
After the contract was signed, and in accord with its terms, plaintiffs conveyed to defendants two parcels of real estate as part payment on the purchase price of the boat.
On April 21, 1954, plaintiffs took physical possession of the boat. Plaintiffs hired Richard Quinn to fish the boat during the fishing season and turned the boat over to him. Quinn inspected it and, allegedly, discovered certain defects in its equipment.
The parties are apparently agreed that the principal considerations for the purchase of the boat were to be paid on October 1, 1954; namely, the conveyance of certain real property and payment of one half of the principal balance on a mortgage on the boat. At the time this agreement was entered into, plaintiffs were not the owners of some of the lots described in the contract, but they had options to purchase these properties. Their options on several of the lots expired sometime during the summer. However, plaintiff Virgil M. Gooden testified that it was mutually agreed between him and the defendants that other lots which plaintiffs owned, or on which they had options to purchase, would be substituted as consideration for the sale of the boat. Defendants did not contradict this testimony. Under the terms of the contract, plaintiffs were also obligated to make certain interest payments and to keep the boat insured to its full value. The record indicates that they did perform these conditions.
During the month of August, Quinn was still out fishing with the boat. Late in the month, defendants contacted Quinn and informed him that the sale was off, and that Quinn should consider defendants as the owners of the boat. Quinn returned from his trip around September 18, 1954. At this time, he apparently tied the boat to the dock with only one insecure line so that it could easily have been damaged during rough weather. On approximately September 23, 1954, defendants boarded the boat, replaced its lock, and placed a 'for sale' sign on it. In short, on that date, defendants repossessed the boat.
Thereafter, both parties treated the sale as having been canceled. Defendants resumed the mortgage and insurance payments. During March, 1955, defendants sold the boat to a third party at a price approximately three thousand dollars less than the one agreed to by plaintiffs and defendants in their contract.
In December, 1955, plaintiffs brought this action for rescission and for restitution of the partial payment of the purchase price; i. e., the value of the two lots which plaintiffs conveyed to defendants. Plaintiffs also sought to recover for damages claimed as a result of alleged misrepresentations made by defendants concerning the condition of the boat. This cause of action was based on a warranty made by defendants in the contract that the boat was 'ready to fish.' Defendants' answer set up two affirmative defenses: 1. That plaintiffs were guilty of laches in that they did not commence this suit until a year after plaintiffs took possession of the boat; 2. That, at the time the boat was repossessed, plaintiffs had breached the agreement. It is particularly significant to note that defendants did not cross-complain for damages suffered as a result of this alleged breach.
The trial court found that legal title to the boat was always in defendants; that, at the time the boat was repossessed, plaintiffs had breached the contract; that plaintiffs were seeking equitable relief without having done equity, in that plaintiffs had not tendered the benefits derived from having possession of the boat for five months; that plaintiffs were guilty of laches; and finally, that defendants were not guilty of any misrepresentation. Judgment was entered for defendants, and plaintiffs have appealed.
The two questions which the litigants in this case have treated as being most important are, (1) whether title to the boat passed at the time of the agreement, and (2) whether the appellants were in default at the time respondents repossessed the boat. We do not deem it necessary to pass on either of these questions.
It is clear, from a legal standpoint at least, that the most favorable position for respondents would be for this court to assume that title did not pass, and that appellants were in default. Even if we indulge in these two presumptions, it is our conclusion that appellants are still entitled to recover the value of the lots they conveyed as part of the purchase price.
The controlling rule of law is well stated in Tungsten Products, Inc. v. Kimmel, 1940, 5 Wash.2d 572, 105 P.2d 822, 824:
'In the absence of a forfeiture clause, this court has held in numerous cases that a vendor who rescinds must restore amounts paid on the purchase price, with interest, less such damages as he may have sustained, when the vendee, although in default, acquiesces in the rescission. * * *' (Emphasis supplied.)
This rule also finds support in the following cases: Jones v. Grove, 1913, 76 Wash. 19, 135 P. 488; Connelly v. Malloy, 1919, 106 Wash. 464, 180 P. 469; McMillen v. Bancroft, 1931, 162 Wash. 175, 298 P. 460.
It is the contention of respondents that on the day they repossessed the boat appellants had evidence an intention to abandon the contract; and further, that on that day appellants were in default of the agreement. This may be true, but when respondents resumed possession of the property and later resold it to a third party they clearly indicated that they acquiesced in the abandonment and...
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