Krebs Hop Co. v. Livesley

• Citation: 92 P. 1084,51 Or. 527
• Parties: KREBS HOP CO. v. LIVESLEY et al.
• Decision Date: 17 December 1907
• Court: Oregon Supreme Court

92 P. 1084

51 Or. 527

KREBS HOP CO. v. LIVESLEY et al.

Supreme Court of Oregon

December 17, 1907

Appeal from Circuit Court, Marion County; Geo. H. Burnett, Judge.

Action by the Krebs Hop Company, a corporation, against T.A Livesley and another. From a judgment for plaintiff defendants appeal. Affirmed.

On August 25, 1904, plaintiff and defendants entered into the following written contract: "In consideration of one dollar, the receipt whereof is hereby acknowledged, Krebs Hop Company, a corporation doing business under the laws of the state of Oregon, sells, and T.A. Livesley & Co. copartnership, buys, five hundred thousand pounds of prime Oregon hops, subject to inspection by T.A. Livesley & Co., or their authorized agent, at the agreed price of fourteen cents per pound, said hops to be the product of, and to be grown on the Krebs Hop Company, Buena Vista farm, better known as the Henderson W. Murphy farm, situated on the west bank of the Willamette river, being about three miles S.E. of Independence, in Polk county, Oregon, on the left-hand side of the wagon road, going from Independence to Buena Vista the said purchaser to have the preference and right of selection over all other contracts. Said hops to be delivered as follows: One hundred thousand pounds (100,000) of the growth of 1905, one hundred thousand pounds (100,000) of the growth of 1906, one hundred thousand pounds (100,000) of the growth of 1907, one hundred thousand pounds (100,000) of the growth of 1908, and one hundred thousand pounds (100,000) of the growth of 1909, f.o.b. cars Independence, Oregon, or f.o.b. boat Murphy's Landing, not later than October 15th of each of the above years. In case there are not a sufficient amount of prime hops grown on the above-described farm to fulfill said contract, the seller agrees to deliver hops of like quality grown elsewhere in fulfillment of said contract. This contract is not transferable without the written consent of both parties hereto and to be binding upon the assigns, executors and administrators. The buyers agree to pay the purchase price in the following manner, to wit Two thousand dollars ($2,000.00) between the first and fifteenth of April of each year, and two thousand dollars ($2,000.00) between the first and the fifteenth of May of each year, and six thousand dollars ($6,000.00) between the first and fifth of September of each year, and the balance, four thousand dollars ($4,000.00), on delivery and acceptance by the buyers of said hops, each year, during the life of this contract, cultivation advances to bear interest at the rate of six per cent. Krebs Hop Company, Sellers, By Conrad Krebs, Pres. T.A. Livesley & Co., Buyers. Witnessed by: [Corporate Seal.]"

This contract was performed by both parties in 1905, but in November of that year plaintiff, without the knowledge or consent of defendants, conveyed the land upon which the hops were to be grown to Ladd & Bush, and on the 14th of the same month assigned and transferred to such firm all payments thereafter to become due under the contract. On February 1, 1906, Ladd & Bush advised the defendants of the assignment, and requested that payments be made accordingly. On the 14th of February, defendants acknowledged receipt of this notice, but demanded a copy of the assignment referred to and a statement as to the ownership of the land upon which the hops were to be grown, and requested to be advised to whom they were to look for delivery of the hops. On February 15th, Ladd & Bush replied, saying, in effect, that they had an assignment of the payments to become due on the hop contract, but not the contract itself, and the plaintiff was in possession of the land described in such contract, and would probably be abundantly able to make delivery of the hops as agreed. On February 20th, defendants again wrote to Ladd & Bush, calling attention to the fact that they had failed to answer the questions propounded in their communication of the 14th, and requesting to be advised: (1) As to who is the owner of the farm mentioned in the contract; (2) what interest, if any, plaintiff has therein; (3) what provision is made for money to cultivate the yard; and (4) renewing their request for a copy of the instrument assigning the payments. Ladd & Bush did not reply to this letter, and on the 17th of March defendants again wrote them requesting a categorical answer to the questions propounded, and saying that, if a satisfactory answer was not given within a reasonable time, they would feel justified in considering the transaction between them and plaintiff to be what it purported on its face--a sale, and not a mortgage of the premises upon which the hops were to be produced--and would act accordingly. Ladd & Bush answered this letter on the same day, saying defendants were not justified in drawing any conclusion whatever from their failure to answer in writing the questions propounded; and that they had no doubt but that the Krebs Hop Company would be able to carry out all the terms of the contract on its part. On March 21st, defendants again wrote Ladd & Bush, saying that their letter, of March 17th, was unsatisfactory, and, unless categorical answers to the questions previously propounded were made satisfactory to defendants within two days, that they would assume the conveyance from plaintiff to Ladd & Bush to have been a sale, and would rescind the contract between them and plaintiff. On March 21st, Ladd & Bush replied calling attention to the previous correspondence, saying that defendants would be expected to make payments according to the terms of the contract between them and plaintiff, and that: "We have not the slightest doubt but the Krebs Hop Co. will be able to comply with all the terms on their part. You are not to assume anything beyond what is contained in our letters. We do not consider that you are concerned with our affairs further than cultivation and delivery of the hops in question, and that undoubtedly will be done by the Krebs Hop Co." On March 24th, the defendants notified Ladd & Bush and plaintiff in writing that they rescinded and abrogated the hop contract of August 2d, because of a violation thereof by plaintiff in selling and conveying to Ladd & Bush the land upon which the hops were to be grown, and by making an assignment of the hop contract contrary to its provisions. On April 16th, Ladd & Bush released to plaintiff all claim they had to the payments falling due in April and May, 1906, and so notified defendants. On May 19th, plaintiff brought this action to recover the two payments referred to. In its complaint it alleges the making of the contract between it and defendants for the sale and purchase of the hops; that it has duly complied with and performed all the terms and conditions thereof on its part; that under and by virtue of such contract there became due and payable to plaintiff $2,000 on April 15th and $2,000 on May 15, 1906; and demanded judgment for such sums, with legal interest thereon. To this complaint defendants filed an answer, in which they admit the making of the contract, but denied that plaintiff has performed the terms thereof on its part, or that there is anything due thereunder.

For further and separate defenses they plead: (1) That the payments to be made by them, except the final payment, were intended as advances to aid plaintiff in cultivating and harvesting the hops; that the conveyance of the land upon which the hops were to be grown and the assignment of such payments to Ladd & Bush rendered it impossible for plaintiff to comply with the contract on its part, and therefore entitled defendants to rescind the agreement which they did accordingly; (2) that by reason of the refusal of Ladd & Bush and plaintiff to give defendants information as to the nature, character, and purpose of the conveyance from plaintiff to Ladd & Bush, and their refusal to furnish defendants with a copy of the assignment by the latter to the former of the contract for the sale and purchase of the hops or the payments to become due thereunder, defendants rescinded the contract, and plaintiff is now estopped to insist that it is in force and effect. The reply denied the allegations of the answer and affirmatively averred that the conveyance and assignment from plaintiff to Ladd & Bush were intended as security for the payment of money.

Upon the issues thus joined the cause came on for trial in July 1906, and plaintiff, after giving evidence that it was in possession of the premises described in the contract between it and defendants, and had about 360 acres of hops growing thereon, which were in good condition and would yield about one ton to the acre, rested. Whereupon defendants, to sustain the issues on their part, offered in...