Groves v. Stouder

Decision Date21 November 1916
Docket Number5977.
PartiesGROVES v. STOUDER ET AL.
CourtOklahoma Supreme Court

Syllabus by the Court.

In an action to rescind a contract for the purchase of land and to recover advanced payment made thereon upon the ground that defendant had failed to convey the character of title which he agreed to convey to a portion of the premises, the only necessary party defendant is the party to the contract against whom the decree of payment will operate.

A person, induced by false and fraudulent representations to purchase real estate, may, upon discovering the fraud, bring an action in equity to rescind the contract, and in such cases should restore, or make an offer in his petition to restore, everything of value which he has received under the contract.

One who contracts to convey a certain character of title to real estate should be prepared and able to convey to the grantee an estate or interest therein substantially corresponding with that bargained for and agreed to be sold.

G contracted to convey to S. certain lands in fee simple and to deliver preference leases on certain school lands. He executed warranty deed to the lands to be conveyed in fee simple, but failed to deliver preference leases on a portion of the school lands. Held, that S. was not required to take a title different from that agreed to be delivered and was entitled to rescind the contract.

Where a vendor cannot convey the interest which he agreed to convey in all of the property, but only to a part of it, the purchaser, upon rescinding the contract, is entitled to a lien upon the land of the vendor to secure repayment of purchase money advanced by him.

Error from District Court, Beaver County; R. H. Loofbourrow, Judge.

Action by Nellie Stouder and others against Charles C. Groves. Judgment for plaintiffs, and defendant brings error. Affirmed.

Charles Swindall, of Woodward, for plaintiff in error.

Dickson & Dickson, of Beaver, and Gray & McVay, of Oklahoma City, for defendants in error.

HARDY J.

Defendants in error brought suit against plaintiff in error to rescind the sale of certain real estate purchased from him consisting of 160 acres to which he held title in fee simple and also certain school land leases. The parties will be referred to as they appeared in the trial court.

The plaintiff Nellie Stouder and defendant entered into two written contracts for the purchase of said premises, by one of which it was agreed that defendant should deliver to plaintiff clear and absolute title to 160 acres of land owned by him in fee simple, for the consideration of $2,500 and by the other, agreed to deliver to plaintiff Nellie Stouder preference leases on the W. 1/2 of section 16 and the S. 1/2 of section 17, township 3 north, range 26 east, C. M., Beaver county, Okl., which leases were to be deposited in escrow in the Speermore State Bank at La Verne, Okl., and to be approved by the state school land commissioners, for which plaintiff was to pay $2,050. In pursuance of this contract defendant executed and delivered warranty deed for the 160 acres of land, and also deposited in the Speermore State Bank two printed forms of leases, containing the names of of the lessees, the description of the land, and the amount of rental to be paid, with the term and date filled in and with the places for signature on behalf of the lessors and the acknowledgment left blank. The blank form, purporting to lease the west half of section 16, is in the form of the ordinary preference lease, while the blank form, purporting to be a lease of the south half of section 17, confers no preference right of purchase, but contains a provision that same is made subject to the right of the state to sell and convey the lands therein leased at any time, and that upon such sale the lease shall thereupon expire. These purported leases were executed by no one, and were nothing more nor less than blank forms, and conveyed no right in the premises to lessees, and wholly failed to comply with the provisions of the written contract entered into between the parties. Judgment was rendered for plaintiff, the decision of the court being placed upon the ground that defendant had failed to deliver to plaintiffs the preference right lease to the south half of section 17.

Defendant insists that the court erred in overruling his motion to require plaintiffs to make as additional parties to the proceeding his sons Carol K. and Fred C. Groves, each of whom had an interest in the leases upon the school lands which by his contract he undertook to relinquish and transfer to plaintiffs. This was an action against defendant to rescind a contract entered into with him to which his sons were not parties, by the terms of which he undertook to convey a certain character of title to certain premises described in the written instruments, and he is the only necesary party to this action, and the only one who would be affected by a judgment decreeing a repayment of the sums received by him. In Harding v. Olson, 177 Ill. 298, 52 N.E. 482, appellant contracted to convey real estate to appellee the title of which at the time was in his son, who conveyed to an insurance company which conveyed to a real estate and loan company. The action was to rescind the contract for failure to convey title and to recover payment thereon. The holding of the court is stated in these words:

"The only necessary party defendant to a bill to set aside a contract for the purchase of land and recover advanced payments, on the ground that defendant had no title, is the party to the contract, against whom the decree of repayment will operate." Warren v. Miller & Sons (Iowa) 99 N.W. 127.

Defendant also insists that before plaintiffs would be entitled to rescind, they would be required to relinquish all of their right, title, and interest in and to the school land which was transferred to them, respectively, by the defendant, which he says could only be done by tendering defendant and his sons leases properly executed by the board of land commissioners for the signature of the defendant and his sons. If leases executed by the board of land commissioners were essential to a transfer of this school land, then no interest was ever transferred therein to plaintiffs. The blank forms of leases which were deposited in the Speermore State Bank were not so executed, and, according to defendant's own contention, plaintiffs never possessed any leases on said lands, or had any interest therein which they could transfer. It is alleged in the petition that as soon as plaintiffs discovered the false and fraudulent representations and concealments of defendant, they forthwith offered to rescind their purchase of said lands and leases, and tendered to defendant a warranty deed in due form to the N.E. 1/4 of section 17, and offered to return the school land leases which they had received, and at the time of trial in open court, renewed their tender and offered to execute a release of all their claims under and by virtue of said purported leases, and to bring the same into court for the use and disposition of defendant. This action is of an equitable nature, and the tender was sufficient. In Howe et al. v. Martin et al., 23 Okl. 561, 102 P. 128, 138 Am. St. Rep. 840, in the third paragraph of the syllabus it is held:

"A person induced by false and fraudulent representations to purchase or exchange for property has three remedies: * * * Second, he may bring an action in equity to rescind the contract, and in such a case it is sufficient for plaintiff to restore, or make offer in his petition to restore, everything of value which he has received under the contract." Lamb v. Dodson, 41 Okl. 638, 139 P. 125.

The tender made in the petition and in open court...

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