Johnson v. Campbell

• Decision Date: 23 July 1971
• Parties: James T. JOHNSON and Elizabeth J. Johnson, husband and wife et al., Appellants, v. Mathilda H. CAMPBELL, aka Tillie Simmons et al., Respondents.
• Court: Oregon Supreme Court

Page 69

487 P.2d 69

259 Or. 444

James T. JOHNSON and Elizabeth J. Johnson, husband and wife et al., Appellants, v. Mathilda H. CAMPBELL, aka Tillie Simmons et al., Respondents.

Supreme Court of Oregon, In Banc.

Argued and Submitted June 3, 1971.

Decided July 23, 1971.

Robert W. Hill, Eugene, argued the cause for appellants. On the briefs were Hill & Schultz, Eugene.

James H. Anderson, Eugene, argued the cause for respondents. With him on the brief were Thompson, Mumford & Woodrich, Eugene.

O'CONNELL, Chief Justice.

This is a suit for a declaratory decree interpreting a land sale contract entered into between plaintiffs as vendees and defendants as vendors. Plaintiffs contend that under the contract they are free to construct multi-family residential units on the land being purchased. The trial court held otherwise and plaintiffs appeal.

In 1964 plaintiffs, James T. Johnson and his wife Elizabeth, entered into a land sale contract to purchase from defendants Mr. and Mrs. Campbell the land involved in this suit. The contract contained the following terms:

'6. Purchasers shall have the right and agree they will subdivide the above described real property at their sole cost and expense subject to the following limitations:

'(a) Said property shall be subdivided in accordance with the preliminary plot plan heretofore prepared by Purchasers and shall contain 7 lots.

'* * *

'20. It is further agreed as follows:

'(1) For purpose of lot release on One Thousand Seven Hundred Fifty ($1,750.00) Dollars payment, no lot shall be in excess of 1/7 of the real property, exclusive of streets, described herein. ¹

'(2) All deeds shall contain a clause providing that all property shall be for residential use only and no residence constructed thereon shall contain less than 1,100 square feet of living area with a building of Ten Thousand ($10,000.00) Dollars or more.'

The Johnsons wished to construct residential units on the property but had difficulty financing the plan. To obtain financing they brought the plaintiffs James and LaVerne McDonald into the arrangement, the Johnsons assigning one half of their interest to the McDonalds. Their ultimate plan was to form a corporation which was to become the owner of the property.

Since the contract precluded assignment of the vendee's rights without consent of the vendors, the Johnsons sent a letter to defendants seeking consent to the assignment. The letter explained the proposal for developing the property including the contemplated transfer of title to a corporation. The letter then went on as follows:

'* * * The assignment of our interest in said contract and property to Emerald Properties, Inc., will, of course, be subject to all the terms and conditions of the contract, excepting that as you know, we have pending an application with the Board of County Commissioners and County Planning Commission for permission to construct multiple family units upon the property, which you have indicated will be acceptable to you.'

The Campbells indicated their approval of the proposal in the letter by signing their names at the foot of the letter under the legend 'ACCEPTED AND APPROVED,' but only after they had added the following statement which was, in turn, signed by the Johnsons:

'Our consent to this assignment shall not relieve or diminish the personal liability of James T. Johnson and Elizabeth Johnson to any and all provisions of the September 29, 1964 contract.'

In 1968 plaintiffs paid to the Cascade Title Company, the escrowee, the balance due on the contract and demanded a deed. The Campbells directed the escrowee to prepare deeds...