Graham v. Merchant

• Decision Date: 06 July 1903
• Parties: GRAHAM v. MERCHANT.
• Court: Oregon Supreme Court

72 P. 1088

43 Or. 294

GRAHAM v. MERCHANT.

Supreme Court of Oregon

July 6, 1903

Appeal from Circuit Court, Coos County; J.W. Hamilton, Judge.

Action by R.A. Graham against C.H. Merchant. From a judgment for plaintiff, defendant appeals. Conditionally affirmed.

This is an action to recover money paid by plaintiff on a contract which he seeks to rescind in consequence of the defendant's alleged abandonment thereof. It is averred in the complaint, in substance: That on March 21, 1895, a contract was entered into whereby the defendant stipulated to sell and convey to the plaintiff 720 acres of land in Coos county for $40,000, of which $5,000 was then advanced, $3,000 to be paid July 15th of that year, and $8,000 on March 15th each year for four years thereafter, ending March 15, 1899 with interest, payable annually, at 7 per cent. per annum the taxes imposed upon the land to be paid by the plaintiff and all improvements placed thereon by him to remain until the final payment; time to be of the essence of the agreement, and, if plaintiff failed to make any of the payments punctually, the defendant should have the right to declare the contract null and void, in which case plaintiff's interest in the premises should cease without any right of reclamation or compensation for the money paid or improvements made. That the following payments have been made, to wit: March 21, 1895, $5,000; July 15, 1895, $3,081.33; March 15, 1896, $10,240; March 25, 1897, $9,680. That on the installments of $8,000 each which matured March 15, 1898, and March 15, 1899, with interest thereon of $1,220 and $560, respectively, there was paid "March 25, 1897, to July 31, 1899, various amounts at different times, aggregating $7,320, and July 31, 1899, $1,800, all of which payments were accepted by the defendant under said written contract." That about July 28, 1899, a parol agreement was entered into whereby defendant was permitted to cut and remove saw logs from said land, crediting plaintiff with stumpage therefor at the rate of $1 per thousand feet, board measure, on the purchase price of the land. That, in pursuance of the latter agreement, defendant prior to February 22, 1902, cut and removed 12,000,000 feet of logs of the stumpage value of $12,000, but neglected to give plaintiff credit for any part thereof. That he then and thereafter wrongfully refused to recognize plaintiff as having any interest in the land, asserting that all his right thereto had been forfeited by his failure to make the required payments, and wrongfully repudiated and rescinded said contracts. That, in consequence of such conduct, plaintiff, about April 9, 1902, relinquished and surrendered all his interest in and possession of said land to defendant, and demanded repayment of the money received, and interest thereon, amounting to $51,956.33, but he neglected to pay any part thereof, wherefore judgment is demanded therefor. The answer admits the execution of said contract, and the payment of the several installments to and including that of $9,680, March 25, 1897, but denies that plaintiff thereafter, or prior to July 31, 1899, paid $7,320, or that he paid on the latter day $1,800, and avers that the following were the only sums received after March 25, 1897, to wit, December 15, 1897, $1,149.61, and October 8, 1898, $393.73, and also denies that any of the payments set forth in the complaint were accepted or received by the defendant under said written contract or otherwise, except as therein admitted. He admits, however, that prior to July 28, 1899, in addition to the sums stated in the answer to have been paid, he received $1,955.07 as stumpage on logs removed from said land, "the same being a part of the substance of said property"; denies that said parol agreement was entered into, or that he cut or removed 12,000,000 feet of logs, of the stumpage value of $12,000, after July 28, 1899, or any quantity exceeding in value $7,500. For a first separate defense, it is alleged that on March 21, 1895, the parties entered into another agreement, whereby plaintiff was authorized to cut and remove timber from said land, paying defendant therefor stumpage at $1 per thousand feet, board measure, and that, in pursuance of said agreement, plaintiff removed from the premises 10,000,000 feet of logs, for which he was to pay stumpage in the sum of $10,000, but he neglected to do so, and failed to account therefor; that in addition to said sum there was due July 28, 1899, on the purchase price of the land, $15,964.24, on which day defendant demanded the payment thereof from plaintiff, who promised to pay or adjust the same in two or three days thereafter, but, without attempting to do so, he left the state, abandoned the contract, forfeited all his rights thereunder, and neglected to pay any part of said sums; that about August 1, 1899, in consequence of plaintiff's default, defendant declared said contract null and void, whereupon the premises reverted to and invested in him, and on March 15, 1900, claiming to be the owner of the land, he took possession thereof; and that since July 28, 1899, plaintiff has had no interest therein, nor any legal claim to the money paid on account thereof. For a second defense, the execution of the contract for the purchase of the land, and the payments thereon, as hereinbefore stated in the answer, are admitted, and, as an offset and counterclaim, it is averred that between January 1, 1897, and July 1, 1900, plaintiff cut and removed 10,000,000 feet of logs, for which he promised to pay stumpage in the sum of $10,000, but that he had not paid any part thereof, wherefore judgment is demanded therefor. The reply, having denied that plaintiff cut or removed more than 6,000,000 feet of logs, or that he had not accounted or paid therefor, alleges that after July 28, 1899, the logs received by him from said land did not exceed 2,500,000 feet, of the stumpage value of $2,500, which is the entire sum he had not paid or accounted for, and denies the other material averments of new matter in the answer. The jury having been impaneled, plaintiff's counsel, in his opening statement, informed them that his client claimed to recover only such payments as were admitted in the answer; and a trial, being had, resulted in a judgment for plaintiff in the sum of $36,760.55, and the defendant appeals.

W.W. Cotton, for appellant.

E.B. Watson, for respondent.

MOORE, C.J. (after stating the facts).

It is contended by defendant's counsel that the parol agreement was the only fact alleged as an excuse, to prevent a forfeiture of plaintiff's rights under the contract, and this averment having been denied, the court erred in not instructing the jury, when so requested, that the burden was cast upon the plaintiff to prove by a preponderance of the evidence that such agreement had been entered into, and that unless they so found, their verdict should be for the defendant. The defendant having alleged that he had been paid on account of the last two installments, the following sums, to wit, December 15, 1897, $1,149.61, and October 9, 1898, $393.73, and in addition thereto had received prior to July 28, 1899, $1,955.07 as stumpage, and this averment being accepted as true by plaintiff's counsel in his statement of the case to the jury, another issue clearly stated in the pleadings remained--as to whether or not the last payment was accepted by the defendant upon the purchase price. The answer admits that $1,955.07 was received prior to July 28, 1899, and, by adopting the ordinary rule that a pleading will be construed most strongly against the pleader ( Pursel v. Deal, 16 Or. 295, 18 P. 461; Kohn v. Hinshaw, 17 Or. 308, 20 P. 629), it must be inferred that this sum was received after March 15, 1899, when the last installment of the purchase price and interest matured. Time was expressly declared to be of the essence of the contract, and the defendant having the option, upon a default in the payment of any installment of the purchase price, to declare a forfeiture, such stipulation is valid, and will be enforced according to its terms, when the right has been duly exercised. Frink v. Thomas, 20 Or. 268, 25 P. 717, 12 L.R.A. 239; Clarno v. Grayson, 30 Or. 111, 46 P. 426; Missouri, etc., Ry. Co. v. Brickley, 21 Kan. 275. A forfeiture clause is inserted in a contract to convey real property for the advantage of the vendor, and, as a competent party may waive any provision that is beneficial to him, a mere option to declare a forfeiture is not self-executing, and hence does not become operative until exercised. Cartwright v. Gardner, 5 Cush. 273; Heald v. Wright, 75 Ill. 17; Bohart v. Republic Inv. Co., 49 Kan. 94, 30 P. 180; Chambers v. Anderson, 51 Kan. 385, 32 P. 1098. When a vendor abandons his contract to convey, the vendee, in his choice of remedies, may elect to rescind the contract, and thereupon maintain an action at law to recover what he has paid thereon, as money had and received. Lyon v. Annable, 4 Conn. 350; McKinnon v. Vollmar (Wis.) 43 N.W. 800, 6 L.R.A. 121, 17 Am.St.Rep. 178; Glock v. Howard & Wilson Colony Co. (Cal.) 55 P. 713, 43 L.R.A. 199, 69 Am.St.Rep. 17. This theory was adopted by plaintiff's counsel, who maintain that if the money received by the defendant after March 15, 1899, was accepted by him as a payment on the purchase price of the land, he could not thereafter declare a forfeiture, except upon a demand and notice, and, this being so, no error was committed in refusing to give the instruction requested. If the money so received as stumpage was accepted on the purchase price of the land after the maturity of the final payment, the defendant must have elected to consider the contract in force; and it remains to be seen whether, after such election, he could...