Ihrke v. Continental Life Ins. & Inv. Co.

• Decision Date: 01 June 1916
• Docket Number: 12774.
• Citation: 157 P. 866,91 Wash. 342
• Court: Washington Supreme Court
• Parties: IHRKE v. CONTINENTAL LIFE INS. & INV. CO.

157 P. 866

91 Wash. 342

IHRKE v. CONTINENTAL LIFE INS. & INV. CO.

No. 12774.

Supreme Court of Washington

June 1, 1916

Department 1. Appeal from Superior Court, Spokane County; Bruce Blake Judge.

Action by Sophie Ihrke against the Continental Life Insurance &amp Investment Company and others. From a judgment for defendant the Continental Life Insurance & Investment Company plaintiff appeals. Reversed and remanded, with instructions.

Geo. W. Belt, of Spokane, for appellant.

Luby & Pearson and Jas. P. Dillard, all of Spokane, for respondent.

FULLERTON J.

This is an appeal from a judgment of dismissal with costs entered in the action after a demurrer had been sustained to the complaint and the plaintiff had elected to stand on her pleadings. The ultimate question presented for decision therefore is: Does the complaint state facts sufficient to constitute a cause of action?

In the complaint it is alleged: That in the year 1908 the defendants F. L. Sherwood and Nannie S. Sherwood, being then the owners of a certain tract of land situated in Spokane county, caused a part of the same to be platted into the ten-acre tracts, recording the plat in the office of the auditor of that county. That after platting the lands as stated the defendants named, using the name of Sherwood Immigration Company, undertook the sale of the tracts, and to induce plaintiff and others to purchase the same caused to be published and circulated circulars or folders containing, among other things, the following statements:

'We plant choice branches of fruit trees of your own selection. An expert will prune, spray, cultivate, and care for them for you in every way for four years free, replacing any trees that should die, turning over to you a bearing orchard which will pay you a yearly profit of from $300 to $500 per acre, and the land will have increased value to three or four times its original cost. All this included in the first cost.'

That the plaintiff read such statements and representations, and, being desirous of obtaining and owning a bearing orchard, and believing and relying upon the representation so made as aforesaid, did, on December 29, 1908, enter into a written contract with the Sherwoods for the purchase of the south half of one of the platted tracts, containing 5.68 acres, agreeing to pay therefor the sum of $1,900 in the following manner: $100 cash on the execution of the contract, and the balance in monthly installments of $11 each--the Sherwoods by the terms of the contract, agreeing to plant the tract so purchased to fruit trees, cultivate and care for the same for a period of four years, replace all that should die during the period at the proper season, and convey the title to the plaintiff by a good and sufficient conveyance when the last of the installment payments should be made.

It is further alleged: That on April 19, 1911, F. L. and Nancy S. Sherwood conveyed the property, with other lands, to the defendant F. B. Rutherford, which conveyance by its express terms provided and stipulated that Rutherford assumed the obligations of Sherwood and wife in the contract made by them with the plaintiff, and agreed to carry out its conditions on their part to be performed. That by mesne conveyances Rutherford and wife conveyed an interest therein to one D. A. Morrison, and that on December 15, 1911, Rutherford and wife and Morrison, being then the owners of the legal title to the property, mortgaged the same, with other lands to the defendant the Continental Life Insurance & Investment Company to secure the sum of $10,000. That on January 20, 1913, the defendant last named commenced an action to foreclose its mortgage and sell the tract in satisfaction of the amount due upon the mortgage, claiming and alleging that the plaintiff's contract was subject and inferior thereto, but that the plaintiff appeared in such action and contested the allegation, and that the court decided that the defendant took its mortgage with full knowledge of the contract.

It is further alleged: That the Sherwoods planted the tract to fruit trees in the spring of 1909, and cared for them for about two years, but thereafter the tract and trees were wholly neglected, the trees not being sprayed, pruned, or cared for or the land cultivated as agreed in the contract, so that a large number of the trees died, and the remainder were so stunted in growth as to be of little, if any, value, and that no amount of cultivation in the future can overcome or repair the injury occasioned by the neglect. That plaintiff did not discover until about four or five months after the tract has been conveyed to Rutherford that the trees were being neglected, but that, on discovering the fact, she called the attention of the Sherwoods and the attention of Rutherford to the fact, and notified them that, unless the contract with reference to the trees were carried out, she would not make any further payments on the contract, but would rescind the same, whereupon the Sherwoods and Rutherford promised and agreed with the plaintiff that, if she would continue the payments, they would at once replace the dead trees, and otherwise place the land and the trees thereon in a first-class condition, and, if necessary so to do, would plant an entirely new orchard thereon, and that the plaintiff, relying on the promises, continued to make payments in accordance with the contract until the commencement of the foreclosure action before mentioned, at which time she ceased, fearing that all of her interests in the property would be lost by such proceedings, and that the foreclosure action was concluded only a few days before she commenced the present action.

It is further alleged: That neither the Sherwoods nor Rutherford kept the promises made by them to the plaintiff with reference to replanting and caring for the tract and orchard, but suffered the same to remain in the condition they were at the time the promises were made. That the plaintiff did not take possession of the tract, and made the subsequent payments on the contract in the belief that the promises had been kept--a fact she did not know until after the foreclosure action had been commenced.

It is further alleged:

'That the representations and statements contained in said folder or circular hereto attached as to the kind and quantity of fruits which tract had and would produce and the profits which had and would be realized therefrom were false and misleading, and known to be such by said immigration company at the time they were made; that, as plaintiff is informed and believes and alleges the fact to be, the net profits possible to be realized on said land from any kind of crop or use are little or nothing, and uncertain; that at and before entering into said contract said Sherwood represented and stated to plaintiff that said land was worth at that time $1,900, but plaintiff alleges upon information and belief that said tract was not then and is not now of more value than $100 per acre; that plaintiff is a widow, and has no one to advise and counsel with concerning matters of business, and has no knowledge of or experience in business matters, and she relied explicitly upon the representations made to her as above alleged; that plaintiff is a woman of small means, with no knowledge of fruit growing or the proper method of planting, cultivating, or caring for fruit trees, and plaintiff was induced to enter into said contract of purchase by the said representations and promises made to her that at the end of four years she would have a bearing orchard which would furnish her a living, and but for such representations she would not have entered into said contract; that said defendants, other than said insurance company, and said persons through whom title to said tract passed, are all insolvent and unable to respond in damages in any amount whatever, and said F. B. and D. H. Rutherford are residents of Oregon, and are not now within the state of Washington, and plaintiff has no adequate remedy, except by rescission of said contract, which she elects to do, and to pray for a recovery of the money paid on the purchase price of said contract, and that the amount thereof be made a lien on the south half of said tract 4.'

The prayer of the complaint is for a judgment and decree rescinding the contract, decreeing the amount paid thereon to be a lien on the land, ordering a sale of the property to satisfy the lien, and for general equitable relief.

The defendant the Continental Life Insurance & Investment Company alone appeared. The demurrer which it interposed and which the trial court sustained was based upon two grounds: (1) That the complaint does not state facts sufficient to constitute a cause of action, and; (2) that the action was not commenced within the time limited by law. The reasons which moved the court to sustain the demurrer do not appear on the face of the record, nor does it appear upon which of the grounds stated the ruling was rested. The respondent's learned counsel have, however, made a well-ordered statement in their brief of the questions involved, and in this order we shall notice them.

The first contention is that the plaintiff, in order to have a cause of action against the defendant who is respondent on this appeal, must have a lien of some sort upon the property contracted to be purchased, and that under the laws of this state no such lien arises from a mere executory contract to purchase real property, even though a part of the purchase price may be paid, and though the vendee may be excused...