Herron v. Harbour

• Decision Date: 15 February 1916
• Docket Number: Case Number: 6171
• Parties: HERRON v. HARBOUR.
• Court: Oklahoma Supreme Court

1916 OK 199

155 P. 506

57 Okla. 70

HERRON v. HARBOUR.

Case Number: 6171

Supreme Court of Oklahoma

Decided: February 15, 1916

Syllabus

¶0 PLEADING--Vendor and Purchaser--Action on Purchase-Money Notes--Failure of Title--Offer to Reconvey--Demurrer to Evidence. (a) Where land has been sold and conveyed to a party with covenants of warranty and notes taken in payment for same, for the vendee to defend against an action for the collection of the notes on the ground of failure of title, the answer must contain an offer to reconvey. (b) Where the answer does not contain an offer to reconvey, the same is so defective, when challenged on that account for the first time by an objection to the introduction of evidence, it is error not to sustain the objection.

Wilson, Tomerlin & Buckholts, for plaintiff in error.

Everest & Campbell, for defendant in error.

MATHEWS, C.

¶1 This was an action for a recovery upon promissory notes given for the purchase price of a tract of land. The defense interposed against the notes was a failure of title to the land. Plaintiff sold the land to defendant and executed to him a warranty deed therefor. The defendant claims that no title to the land was ever vested in plaintiff, hence a failure of consideration for the notes sued on. There was no offer of reconveyance by defendant, either in the pleadings or in the proof. No demurrer was filed against the answer, but at the beginning of the trial, the burden being upon defendant, the plaintiff interposed the following objection:

"The plaintiff objects to the introduction of any evidence on the part of the defendant in substantiation of the allegations of the answer, and in support of his objection states that the answer does not state facts sufficient to constitute a defense against the plaintiff's cause of action, nor does the answer show therein any defense on account of breach of warranty, nor does defendant by his answer show that he has conformed with the law in regard to conditions precedent to any breach of warranty or to any action upon a breach of warranty. * * * "

¶2 The above objections were overruled, and at the close of plaintiff's testimony the sufficiency of the same was challenged by demurrer, which was also overruled. We are here confronted with the proposition whether or not the answer, not containing an offer to reconvey, was fatally defective. As the plaintiff did not challenge the same by demurrer, every intendment must be resolved in favor of the sufficiency of the answer, and it must be held good unless an offer to reconvey is one of the essential requisites in the defense interposed by defendant. In the case of Howe et al. v. Martin et al., 23 Okla. 561, 102 P. 128, 138 Am. St. Rep. 840, it is said:

"A person induced by false and fraudulent representations to purchase or exchange for property has three remedies. He may, first, upon discovery of the fraud, rescind the contract absolutely, and sue in an action at law, and recover the consideration parted with upon the fraudulent contract, and in such a case he must restore, or offer to restore, to the parties sued whatever he has received by virtue of the contract; or, 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 an offer in his petition to restore, everything of value which he has received under the contract; or, third, he may affirm the contract, retain that which he has received, and bring an action at law to recover the damages sustained by reason of his reliance upon the fraudulent representations."

¶3 In case of a failure of title, even though no fraud appears in the transaction, the above excerpt is a correct statement of the available defenses to the purchaser. Both from the answer filed and from the evidence introduced by defendant at the trial, it is plainly apparent that he has not elected to proceed under the third remedy enumerated above, and it will not be contended that defendant has elected to confirm the sale and recover the damages incurred by reason of the failure of title. Undoubtedly the remedy selected by defendant was either the first or second enumerated above, and it matters not whether it betook of the nature of a law action, as in the first remedy above set out, or of the nature of an equitable action as in the second, because the very basis of each remedy is a restoration of what had been received under the contract. We have been unable to find that our own courts have passed upon the exact question here presented, but the principle involved is laid down in the case of Pugh v. Stigler, 21 Okla. 854, 97 P. 566, where it is said:

"A vendee, having a bond for title and in possession of the land, may resist the payment of the purchase money when the title of the vendor has failed, but must, in order to avail himself of that defense, offer to rescind and restore the premises to the vendor."

¶4 In the last case cited there is quoted with approval the following excerpt from 18 Ency. Pleading & Practice, 829:

"In suits for the rescission and cancellation of contracts the court applies the familiar maxim of equity, of almost universal application, that he who seeks equity must do equity. The plaintiff will not be permitted to repudiate his contract and still retain the benefits which he has derived from it, and his desire and willingness to restore what he has received must appear in the bill or complaint; otherwise, he will have no standing in a court of equity."

¶5 In the case of Zufall v. Peyton, 26 Okla. 808, 110 P. 773, the contention of the plaintiff in error, which was there approved by the court, was:

"A vendee, having received a deed and the possession of land, cannot resist the payment of the balance of the purchase money, when the title of the vendor has failed, and cannot avail himself of that defense, unless he offers in his pleadings to rescind the contract and restore the premises to the vendor."

¶6 Each of the two cases last cited above holds that where the title fails, in order for the vendee to defend against the payment of the balance of the purchase money, he must place the vendor in statu quo, and if he has received a deed and gone into possession he must not only restore possession, but must also rescind the contract, and most certainly in order to effectively rescind the contract there must be a reconveyance of the property which has been deeded to him under the contract. To the same effect is Joiner et al. v. Ardmore Loan & Trust Co., 33 Okla. 266, 124 P. 1073:

"Where, on a trial of an action to recover unpaid purchase money for lands conveyed under deed or general warranty, the title to which has wholly failed, the obligors plead such failure of consideration and tender a reconveyance, they are entitled to recover in such action any portion of the consideration paid, under the

...