Jennings v. Dexter Horton & Co.

• Decision Date: 28 July 1906
• Court: Washington Supreme Court
• Parties: JENNINGS v. DEXTER HORTON & CO.

86 P. 576

43 Wash. 301

JENNINGS v. DEXTER HORTON & CO.

Supreme Court of Washington

July 28, 1906

Appeal from Superior Court, King County; R. B. Albertson, Judge.

Action by I. H. Jennings, as receiver of the Colby Trading Company an insolvent corporation, against Dexter Horton & Co. From a judgment in favor of defendant, plaintiff appeals. Affirmed.

Allen, Allen & Stratton, for appellant.

George E. De Steigner, for respondent.

HADLEY J.

This is an action for the recovery of money, brought by the receiver of the Colby Trading Company, an insolvent corporation. Among the effects of said corporation, which passed into the possession of the receiver, was a certain written contract between Dexter Horton & Co., and the said corporation. The contract bore date January 2, 1903, and provided that Dexter Horton & Co. agreed to sell and convey to said corporation certain real estate, upon the terms and conditions therein provided. The total purchase price specified was $3,740, and $2,000 thereof was paid at the time the contract was executed. The balance was made payable in successive monthly installments of specified amounts, and it was provided that upon the faithful performance on the part of said corporation of all the terms of the contract, a good and sufficient conveyance of the land, containing covenants of special warranty, should be made to it by Dexter Horton & Co. Time was made of the essence of the contract, and it was recited that if the corporation should fail to make any payments as specified and at the times stated, then all rights of said corporation, either at law or in equity, under the contract should be wholly terminated, and at an end; and also that all payments theretofore made should be retained by Dexter Horton & Co., as and for liquidated damages. The contract also contained the following: 'Provided, however, that this agreement is made subject to the final determination of the cause now pending in the United States Circuit Court of Appeals for the Ninth Circuit, wherein the London & San Francisco Bank is plaintiff, and Dexter Horton &amp Co., the party of the first part hereto, is defendant; which said action involves the title to the lands above described. And it is further provided that if the final judgment in said cause shall be in favor of the plaintiff therein, and adverse to the party of the first part hereto, and shall be to the effect that the said London & San Francisco Bank or Arthur Scrivener as trustee, or its or his assigns, has any right title, claim, interest, or lien in and to said premises, or any part thereof, superior to the title and right of the party of the first part therein, thereupon all rights of either of the parties hereto under this contract shall cease and the party of the first part shall be under no obligation to make any conveyance as above provided, nor shall the party of the second part be under any obligation to make further payments thereon, but the party of the first part shall repay to the party of the second part all payments theretofore made without interest.'

The installment payments due upon the contract in the months of February, March, and April, 1903, were duly paid, and these together with the $2,000 cash paid when the contract was executed made the total sum of the payments $2,500. The suit mentioned in the above-quoted portion of the contract, which was pending in the United States Circuit Court of Appeals at the time the agreement was made, was thereafter, on or about the 19th day of October, 1903, decided adversely to Dexter Horton & Co., and to the effect that the London & San Francisco Bank, or Arthur Scrivener as its trustee, had a valid mortgage upon the land covered by the contract, which was a lien thereon at the time the contract was made and at all times thereafter, the same being superior and paramount to the title of Dexter Horton & Co.

After the decision in said cause by the United States Circuit Court of Appeals, Dexter Horton & Co. applied to the Supreme Court of the United States for a writ of certiorari to the said Circuit Court of Appeals for the review of said cause. The application was denied. There has been no appeal, and the decision remains unreversed and unmodified. Prior to said decision the Colby Trading Company was in default as to the payments due from it under its said contract. Installments of $250 each were due on the 2d days of May, June, and July, 1903, respectively. No one of said installments having been paid, Dexter Horton & Co. on the 31st day of July, 1903, served written notice upon said corporation that by reason of the default all rights of the Colby Trading Company, either at law or in equity, arising from said contract, were declared at an end. A similar notice was also served upon the receiver of the corporation after his appointment and qualification. The aforesaid decision and judgment of the Circuit Court of Appeals ordered the Circuit Court of the United States for the Northern Division of the District of Washington to enter judgment of foreclosure as to the premises described in the aforesaid contract, but the said Circuit Court has not entered such judgment. No such judgment having been entered, the parties to said cause, on or about the 12th day of September, 1904, stipulated that the decree that should be entered therein should recite that the aforesaid lands were excepted, released, and discharged from the lien of said mortgage. Thereafter on the 13th day of September, 1904, the said London & San Francisco Bank, by deed, conveyed said lands to Dexter Horton & Co., free and clear of said mortgage. This action was brought by the receiver as aforesaid against Dexter Horton & Co. to recover the $2,550 paid upon said contract, and the above facts, which we have gathered from the pleadings, are by stipulation of the parties the facts in the case. The cause was submitted to the court without a jury, upon the pleadings as the agreed statement of...