Hardin v. Union Mut. Life Ins. Co.

• Citation: 271 N.W. 176,222 Iowa 1283
• Decision Date: 19 January 1937
• Docket Number: 43368.
• Parties: HARDIN v. UNION MUT. LIFE INS. CO. et al.
• Court: Iowa Supreme Court

271 N.W. 176

222 Iowa 1283

HARDIN v. UNION MUT. LIFE INS. CO. et al.

No. 43368.

Supreme Court of Iowa.

January 19, 1937

Appeal from Municipal Court, City of Des Moines, Polk County; Chas S. Cooter, Judge.

An action in equity to rescind a contract for the purchase of real estate and for the recovery of the down payment made on the purchase price because of a breach of contract by the vendor. Judgment for the plaintiff. Defendant appeals.

Affirmed.

Harold S. Thomas and C. H. Burgardt, both of Des Moines, for appellant.

C. O Switzer and Neiman & Leake, all of Des Moines, for appellee.

Royal & Royal, of Des Moines, for Walker Realty Co. and George E Walker.

STIGER, Justice.

The defendant Union Mutual Life Insurance Company will be referred to in this opinion as the defendant.

On July 17, 1933, the plaintiff and the defendant Union Mutual Life Insurance Company entered into a written contract for the purchase and sale of a residence property in Des Moines, Iowa, for the sum of $9,750. The material parts of this contract are as follows:

" Offer to Buy

Des Moines, Iowa, July 15, 193-

To Union Mutual Life Insurance Company

I-We hereby make you the following offer for your property, known as 2011 Chautauqua Parkway, City of Des Moines, Iowa.

Total Price of Property, $9,750.00, payable as follows:

$125.00 cash, with this offer as part payment to be held by Walker Realty Company, T. L. Denny, agent, pending exchange of final papers.

(September 1st, 1933)

$125.00, cash to be paid upon execution of contract, upon the form commonly used by Des Moines, Iowa., Realtors, and the balance of $9,500.00 to be paid as follows to-wit:

$70.00 on the 1st day of October, 1933, and the same amount on the 1st day of each month thereafter until the full amount of said consideration is paid down to the mortgage now on said property, or hereafter placed thereon, with interest at the rate of 6 per cent per annum, payable monthly, and included in the monthly payments.

4. Possession to be given on or before Sept. 1st, 1933, and adjustments of interest, rents and insurance to be made of like date.

5. The owner is to continue the abstract to the date of the contract, showing good and merchantable title, free and clear of all taxes, assessments, liens and encumbrances, other than those specified, except building restrictions, and a mortgage, the balance of which shall not exceed $ ...... with interest at ...... per cent.

9. If the purchaser fails to fulfill his part of the agreement, he shall pay to the seller a sum equal to the amount of said commission and any additional expense incurred by the seller as liquidated damages, and the seller hereby assigns to the agent the claim for commission as above stated. The advance payment made herein shall be forfeited and the same is hereby assigned to the agent to apply on his commission."

This contract will be referred to as Exhibit A. The additional contract, provided for in Exhibit A, to be executed by the parties September 1, 1933, on the form commonly used by the Des Moines, Iowa, Realtors, contains the following provisions:

" 7. But if all said sums of money, interest and taxes are paid, as aforesaid, * * * and all agreements on the part of the party of the second part (plaintiff) have been complied with, the party of the first part (defendant) will, on receiving said money and interest, execute and deliver to second party * * * a good and sufficient warranty deed conveying said premises in fee simple, and furnish said second party with an abstract of title * * * showing a good and merchantable title to said premises in grantor. 8. It is understood that second party (plaintiff) has examined the abstract of title to said property at this time and has approved said abstract to the date of this contract."

This form of contract, which must be construed with Exhibit A, will hereafter be referred to as Exhibit 6.

It should be noticed at this time that the installment due September 1, 1933, under Exhibit A was to be paid upon execution of the additional contract upon the form commonly used by Des Moines, Iowa, Realtors, that is, Exhibit 6, and that the provision in Exhibit 6, paragraph 8, that, " It is understood that second party has examined the abstract of title to said property at this time (September 1st, 1933) and approved said abstract to the date of this contract," contemplated that the abstract required by Exhibit A showing good and merchantable title in the vendor was to have been examined and approved by the plaintiff prior to the date that the second installment became due and the parties agreed to enter into the contract Exhibit 6, that is, September 1, 1933.

Under these provisions of the contracts, the defendant agreed to furnish an abstract to the plaintiff continued to the date of Exhibit A, July 17, 1933, showing good and merchantable title in the defendant, and the furnishing of this abstract and its examination and approval by the plaintiff on or before September 1st, 1933, was made, by the parties, a condition precedent to the payment of $125 on the purchase price September 1, 1933, and the execution by the parties of Exhibit 6.

On July 17, the defendant delivered to the plaintiff an abstract of title to the premises continued to May 25, 1933, although Exhibit A required an abstract continued to the date of the contract. The abstract revealed certain liens and judgments, and after examination by plaintiff's attorney it was returned to the defendant with the attorney's objections. At no time did the defendant continue the abstract to July 17, 1933, nor return it to the plaintiff. The record does not disclose that the defendant at any time furnished the plaintiff with an abstract of title in compliance with the requirements of Exhibit A.

After September 1st, the date on which the additional contract was to be entered into by the parties, and on September 2d, the plaintiff sent to the defendant the following notice of rescission of the contract:

" Des Moines, Iowa, Sept. 2, 1933.

Union Mutual Life Insurance Co.,

2nd Floor Teachout Bldg.

Des Moines, Iowa

Gentlemen:

I have advised your agent the Walker Realty Company that I have withdrawn my offer to purchase the property in Des Moines, Iowa, known as 2011 Chautauqua Parkway, for the reason that the Union Mutual Life Insurance Company as vendor, are unable to furnish a good and merchantable title and have not brought down the abstract of title to the date of said offer.

I hereby give you the same notice and request that the sum of $125.00, deposited by me, be returned immediately."

After about six weeks from the date of the giving of the notice of rescission of the contract and on October 27, 1933, the plaintiff commenced this action for rescission of the contract and for the recovery of the down payment made to the defendant in the sum of $125, alleging that the defendant breached its contract to furnish an abstract showing good and merchantable title.

The defendant filed an answer alleging that it did furnish the plaintiff an abstract of title in compliance with the contract, and with reference to a certain judgment lien against Faye Sonderleiter in the sum of $1,000, the defendant states that said judgment was not a lien on the premises conveyed because said property was the homestead of said Faye Sonderleiter, and that defendant made all reasonable efforts to remove said judgment lien as a cloud against the title to said premises prior to September 1, 1933, and did secure a release on said lien December 11, 1933; that it offered to properly secure the plaintiff from this lien prior to September 1, 1933. Defendant also alleged that plaintiff had failed to perform his obligation under the contract, and even though the defendant breached the contract as alleged by the plaintiff, the plaintiff, having failed to tender performance or pay the sums of money due under Exhibit A, was not entitled to bring the action; that Exhibits A and 6 should be construed together, and under the contract defendant was not required to remove the encumbrances prior to the time it was to deliver a deed and abstract to plaintiff nor until plaintiff had performed all his obligations and completed the installment payments...