Maffet v. Oregon & C.R. Co.

• Decision Date: 17 April 1905
• Citation: 46 Or. 443,80 P. 489
• Parties: MAFFET v. OREGON & C.R. CO.
• Court: Oregon Supreme Court

80 P. 489

46 Or. 443

MAFFET v. OREGON & C.R. CO.

Supreme Court of Oregon

April 17, 1905

Appeal from Circuit Court, Multnomah County; A.L. Frazer, Judge.

Action by William R. Maffet, Jr., trustee, against the Oregon &amp California Railroad Company. From a judgment for plaintiff defendant appeals. Reversed.

On December 31, 1889, the defendant, as party of the first part and E.T. McKinney and Wm. R. Maffet, Jr., trustees, of the second part, made and entered into a contract whereby the defendant agreed to sell and McKinney and Maffet to purchase 5,172.28 acres of land lying in the place and indemnity limits of the grant by Congress by act of July 25, 1866, to the first party, for the sum and price of $64,362.07, payable as follows: $6,436.20 on the day of the execution of the contract, and the balance, or $57,925.87, on December 31 1894, with interest on such balance at the rate of 7 per cent. per annum, payable annually in the meanwhile, being $4,054.81 December 31, 1890, $4,054.81 December 31, 1891 $4,054.81 December 31, 1892, $4,054.81 December 31, 1893, and $4,054.81 December 31, 1894. Other stipulations, so far as it is necessary to set them forth, are as follows: "That the party of the second part [McKinney and Maffet] may at any time pay the agreed price of either of said tracts separately as shown by the schedule, *** and shall thereupon the entitled to a conveyance of all the right, title and interest of the first party [the O. & C. Railroad Co.] therein, and the second party shall not cut or remove, nor allow to be cut or removed, any timber from either of said tracts of land without first paying such agreed price thereof, otherwise the whole of said sum of $57,925.87 shall become immediately due and payable. *** And if any of the said sums, either of principal or interest, shall not be paid at the dates above specified, then such sums shall bear interest in gold coin from such dates at the rate of ten per cent. per annum, payable annually until payment. And the second party in consideration of the premises hereby agrees *** that they will make punctual payment of the above sums as each of them respectively becomes due. *** In case the second party, their legal representatives or assigns, shall pay the several sums of money aforesaid punctually and at the times above limited, and shall strictly and literally perform all and singular the agreements and stipulations aforesaid, according to their true tenor and intent, then the first party will cause to be made and executed unto the second party, their heirs and assigns (upon request and surrender of this contract, provided the said party of the first part shall have then received a patent therefor from the United States, and when said lands hereby contracted to be sold shall have been patented to the said party of the first part), a deed conveying all the right, title and interest of the party of the first part in and to said premises. *** And it is hereby agreed and covenanted by the parties hereto that the times of the payments are of the essence of this contract. And in case the second party shall fail to make the payments aforesaid, and each of them, punctually and upon the strict terms and times above limited, and likewise to perform and complete all and each of the agreements and stipulations aforesaid strictly and literally, without any failure or default, then this contract, so far as it may bind the first party, shall become utterly null and void, and all rights and interests hereby created or then existing in favor of the second party, or derived from them, shall utterly cease and determine, and the right of possession and all legal and equitable interests in the premises hereby contracted shall revert to and revest in said first party, without any declaration of forfeiture or act of re-entry, or any other act by said first party to be performed, and without any right of said second party of reclamation or compensation for moneys paid or services performed, as absolutely, fully and perfectly as if this contract had never been made. And said party of the first part shall have the right immediately upon the failure of the party of the second part to comply with the stipulations of this contract, or any one of them, to enter upon the land aforesaid, and take immediate possession thereof, together with the improvements and appurtenances thereto belonging. And the said party of the second part covenants and agrees that they will surrender unto said party of the first part the said lands and appurtenances without delay or hindrance, and no court shall relieve the party of the second part from the failure to comply strictly and literally with this contract." The plaintiff, for cause of action, sets out this contract, and alleges, in substance, that the vendees paid to defendant in pursuance thereof $6,436.20 December 31, 1889, as part payment of the purchase price, and thereafter paid further sums as follows: $2,027.41 March 2, 1891, $202.75 September 21, 1891. $1,000 December 30, 1891, $1,027.10 January 28, 1892, and $1,000 July 25, 1892; all of which were received, accepted, and retained by defendant. Then, after detailing certain matters tending to render it more or less uncertain and questionable whether defendant would be able shortly to obtain its title from the general government, as it claimed, by virtue of the said act of Congress, it is further alleged: That in view and consideration of the complications thus arising, and of a doubt occasioned thereby as to the ability of the defendant to establish its title to all or any of the lands described in said contract, or to obtain patents therefor from the United States on or before the time fixed for the last payments of principal and interest, and in further consideration that each of the parties to said contract would waive and forego its or their rights to a strict and literal performance of the terms and of the stipulations and provisions making time of the essence thereof, and for the convenience and interests of each of the parties thereto, they did, on or about July 25, 1892, make and enter into a mutual understanding, arrangement, and agreement, whereby it was agreed that no further payments of interest or principal nor any demand for conveyance of the title to any of such lands should be made until the right of the company to the whole should be finally established and patents issued therefor, and it should be in a condition to convey an indefeasible title thereto in fee simple, and that every right to a strict and literal performance of the terms, stipulations, and provisions of the said contract in behalf of either or both of said parties should be annulled, and thereby waived and renounced. That the right of defendant to any portion of said lands was not finally established until the decree of the Supreme Court of the United States, rendered about January 8, 1900; that the right to that portion of the same included in the Bull Run reserve, set aside by the President as a public reserve, has never yet been established or recognized by the United States government; and that the equitable title of Himpel, and Neppach, as his assignee, in a portion of said lands, so remained in them until May 10, 1900; but that, notwithstanding such conditions as to the title, and prior to any patent having been issued by the general government to the defendant to any portion of said lands, the defendant, on March 27, 1900, wrongfully and fraudulently broke said contract, refused to perform, and repudiated, rescinded, and canceled the same by a written notice to plaintiff and McKinney, trustees, in form as follows: "Referring to the former contract number 3,354, of date December 31, 1889, made with you by the Oregon & California Railroad Company, for the sale of certain lands in said former contract described, this is to notify you that the company hereby forfeits and cancels said contract for failure upon your part to comply with the terms and conditions, to-wit: failure to make payment of the purchase price, and you are hereby notified that said contract is no longer of any force and effect." That ever since the giving of said notice the defendant has claimed and asserted that said contract was forfeited and canceled, and has refused to recognize the same as operative and binding. That E.T. McKinney, trustee, has died since the execution thereof, and that plaintiff is now the sole surviving trustee. That prior to the commencement of this action plaintiff demanded repayment of the several sums paid to defendant under said contract, with interest at the rate of 8 per cent. per annum, amounting in the aggregate to $21,619.38, which was refused; and that by reason of the premises defendant is indebted to plaintiff in the sum stated, for which amount judgment is prayed. The defendant demurred to the complaint, assigning three grounds therefor: First, that it does not state facts; second, that plaintiff has not legal capacity to sue, and that there is a defect of parties, in that plaintiff cannot sue without joining with him the personal representative of E.T. McKinney, deceased; and, third, that the cause, if any plaintiff has, accrued more than six years prior to the commencement of the action. The demurrer being overruled, the defendant answered. The answer admits the execution of the contract virtually as alleged, and the payments, but denies all inducement set out leading to the alleged waiver agreement, or that such an understanding, arrangement, or agreement was ever entered into, or that defendant in any manner broke the said contract of December 31, 1889, by refusing to perform, or that it rescinded or canceled the same by written or other notice, but alleges that on the 27th day of March, 1900, it did, by reason of the...